9.Property, Plant and Equipment

Property, plant and equipment, net

The components of property, plant, and equipment, net were as follows:


	December 31,		December 31,
	2020		2019
	(in thousands)
Mineral properties	$	9,353	$	9,353
Exploration properties		2,418		2,518
Royalty properties		200		200
Buildings		3,755		3,755
Mining equipment and machinery		16,135		16,049
Other furniture and equipment		890		884
Construction in progress		259		—
Asset retirement cost		948		866
		33,958		33,625
Less: Accumulated depreciation and amortization		(28,438)		(27,594)
	$	5,520	$	6,031

Construction in Progress

Construction in progress is related to upgrades being made at the Velardeña Properties processing plant related to the processing of the Rodeo mined material.

Sale of Santa Maria Property

On July 14, 2020, we entered into a binding letter of intent with Fabled Silver Gold Corp., formerly known as Fabled Copper Corp. (“Fabled”), for a potential transaction pursuant to which Fabled would acquire the Company’s option to earn a 100% interest in the Santa Maria mining claims (“Santa Maria Properties”) located in Chihuahua, Mexico (the “Option”). Entry into a definitive agreement regarding the Option was subject to a number of contingencies.

On December 4, 2020, the Company entered into a definitive option agreement (the “Option Agreement”) to sell its Option to Fabled. The period to exercise the Option (the “Exercise Period”) expires on December 4, 2022, unless extended by the parties under the terms of the Option Agreement. As consideration for the Option Agreement, Fabled (i) paid $500,000 in cash to the Company and issued to the Company 1,000,000 shares of Fabled’s common stock; (ii) will pay $1,500,000 in cash to the Company on the one year anniversary date following the closing of the Option Agreement; (iii) will pay $2,000,000 in cash to the Company on the two year anniversary date following the closing of the Option Agreement; and (iv) upon exercise of the Option Agreement, will grant the Company a 1% net smelter return royalty on the Maria, Martia III, Maria II Frac. I, Santa Maria and Punto Com concessions (the “Concessions”). Pursuant to the Option Agreement, during the Exercise Period, Fabled is obligated to pay to each of the owners of the Concessions (the “Owners”) any remaining required payments due to the Owners pursuant to the various underlying option agreements between the Owners and the Company, and to make all payments and perform all other requirements needed to maintain the Concessions in good standing. Should Fabled not complete its obligations described above, the Santa Maria mining claims will revert to the Company and the Company will be entitled to keep any payments made by Fabled under the terms of the Option Agreement.

Fabled has the right to terminate the Option Agreement at any time, and the Option Agreement could be terminated, at the Company’s option, if Fabled fails to make subsequent payments when due. If the Option Agreement is terminated, the Santa Maria Properties will revert back to the full ownership and control of the Company and any payments that have been made by Fabled will be nonrefundable. Upon receipt of each cash payment, the Option Agreement imposes a performance obligation on the Company to provide Fabled an exclusive right to the Santa Maria Properties to conduct exploration and mining activities during the period from receipt of the payment until the due date of the next required payment. Accordingly, the Company has determined that its performance obligation for each option payment received is satisfied over time.

The Company has previously expensed all of its costs associated with the Santa Maria Properties. Because of Fabled’s ability to terminate the Option Agreement at any time, and the associated uncertainty relating to future payments, the Company only recognizes income, equal to the cash payments made and fair value of stock issued, evenly over the period covered by each payment. The Company has recognized approximately $23,000 of income under the Option Agreement for the period ended December 31, 2020, included in “Other operating income, net” in the accompanying Consolidated Statements of Operations. The Company has also recorded deferred revenue of approximately $535,000 at December 31, 2020 representing its unearned performance obligation related to the Option Agreement, included in “Deferred revenue” as reported in the accompanying Consolidated Balance Sheets.

Sale of Mogotes and Pistachon Properties

On December 18, 2019, the Company sold the non-strategic Mogotes and Pistachon properties in Mexico to a subsidiary of Industrias Peñoles for $3.0 million. The Mogotes and Pistachon properties are comprised of a total of four mining concessions located near the Company’s Velardeña Properties. Upon receipt of the cash payment, which occurred on the date the properties were sold, all of the Company’s rights and obligations relating to the properties were transferred and the Company had no further performance obligations under the sale agreement. The Company had previously expensed all costs associated with the Mogotes and Pistachon properties and accordingly recognized a gain of $3.0 million included in “Other operating income, net” in the accompanying Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2019.