Property, Plant and Equipment, Net

6 Months Ended

Jun. 30, 2023

Property, Plant and Equipment, Net

Property, Plant and Equipment, Net

9. Property, Plant and Equipment, Net

The components of property, plant and equipment are as follows:

	June 30,		December 31,
	2023		2022
	(in thousands)
Mineral properties	$	9,353	$	9,353
Exploration properties		2,418		2,418
Royalty properties		200		200
Buildings		3,808		3,808
Mining equipment and machinery		17,068		17,127
Other furniture and equipment		1,377		1,355
Asset retirement cost		1,157		1,157
		35,381		35,418
Less: Accumulated depreciation and amortization		(29,227)		(29,002)
	$	6,154	$	6,416

For the six months ended June 30, 2023 and 2022, the Company recognized approximately $232,000 and $152,000, respectively, of depreciation and amortization expense.

For the three months ended June 30, 2023 and 2022, the Company recognized approximately $133,000 and $87,000, respectively, of depreciation and amortization expense.

El Quevar Earn-In Agreement

On April 9, 2020, we entered into an earn-in agreement with Barrick (the “Earn-In Agreement”), pursuant to which Barrick has acquired an option to earn a 70% interest in the Company’s El Quevar project located in the Salta Province of Argentina. As of December 31, 2021, Barrick had met the $1 million in work expenditures that would permit them to withdraw from the Earn-in Agreement. At June 30, 2023, Barrick has continued with exploration activities, per the terms of the Earn-in Agreement, at the Company’s El Quevar project located in the Salta Province of Argentina.

Sale of Santa Maria Property

On December 4, 2020, the Company and Fabled entered into an option agreement (the “Option Agreement”) under which Fabled would have acquired a 100% interest in the Santa Maria property by paying $4.5 million in cash over a period of several years. The Company recorded a $1.5 million payment it received from Fabled in December 2021 to “Deferred revenue” on the Consolidated Balance Sheets and amortized the amount to income over a one-year period. Upon receipt of each cash payment, the agreement imposed 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 remaining unamortized balance of deferred revenue at June 30, 2023, and December 31, 2022, is zero.

On December 19, 2022, the Option Agreement was amended to reschedule the remaining $2.0 million payment into eight quarterly payments of $250,000 from January 31, 2023 through September 30, 2024. Fabled failed to make the payment due on January 31, 2023. In February 2023, the Company issued a notice of default under the Option Agreement to Fabled and the property has reverted to the Company as allowed under the terms of the Agreement. The carrying value of Santa Maria as of June 30, 2023, and December 31, 2022, is zero.