Asset Retirement and Reclamation Liabilities

3 Months Ended

Mar. 31, 2020

Asset Retirement and Reclamation Liabilities

Asset Retirement and Reclamation Liabilities

16.     Asset Retirement Obligation and Reclamation Liabilities

The Company retained the services of a mining engineering firm to prepare a detailed closure plan for the Velardeña Properties. The plan was completed during the second quarter 2012 and indicated that the Company had an ARO and offsetting ARC of approximately $1.9 million at that time.

The Company will continue to accrue additional estimated ARO amounts based on an asset retirement plan as activities requiring future reclamation and remediation occur.  During the first three months of 2020, the Company recognized approximately $59,000 of accretion expense.

The following table summarizes activity in the Velardeña Properties ARO:

	Three Months Ended
	March 31,
	2020		2019
	(in thousands)
Beginning balance	$	2,825	$	2,660
Changes in estimates, and other		82		(60)
Accretion expense		59		55
Ending balance	$	2,966	$	2,655

The change in estimates of the ARO recorded during 2020 and 2019 are primarily the result of changes in assumptions related to inflation factors used in the determination of future cash flows.

The ARO set forth on the accompanying Condensed Consolidated Balance Sheets at March 31, 2020 and December 31, 2019 includes a nominal amount of reclamation liability related to activities at the El Quevar project in Argentina.