Sale of Metals and Related Costs

3 Months Ended

Mar. 31, 2021

Sale of Metals and Related Costs

Sale of Metals and Related Costs

16. Sale of Metals and Related Costs

During the three months ended March 31, 2021 the Company sold the gold and silver contained in doré bars related to the Rodeo operation to one customer, a metals refinery located in the United States.  Under the terms of the Company’s agreement with its customer, title passes and revenue is recognized by the Company when the contractual performance obligations of the parties are completed, generally at the time a provisional or final payment is made.  A provisional payment for approximately 95% of the contained gold and silver is made generally occurs within 7-10 days after the product is shipped and customary sales documents are completed.  A final payment is made within approximately 30 days following the date of shipment when final assays and refinery charges are agreed upon by the parties.  A price for the gold and silver sold is set, based on current market prices, at the time a provisional or final payment is made.  Refining and transport costs, deducted from the final payments made, are treated as third party agent costs incurred by the Company in performing its obligations under the agreement with its customer after the transfer of control on provisional sales, and are therefore netted against revenue on an accrual basis.

Costs related to the sale of metals products include direct and indirect costs incurred to mine, process and market the products.  At March 31, 2021, the Company had written down its doré inventory to net realizable value, including a charge to the cost of metals sold of approximately $17,000.

During the three months ended March 31, 2020 the Company did not sell any doré products or incur any related costs.