Reclamation and Mine Closure

9 Months Ended

Sep. 30, 2013

Asset Retirement Obligation Disclosure [Abstract]

RECLAMATION AND MINE CLOSURE

RECLAMATION AND MINE CLOSURE

Reclamation and mine closure costs are based principally on legal and regulatory requirements. Management estimates costs associated with reclamation of mining properties as well as remediation costs for inactive properties. The Company uses assumptions about future costs, mineral prices, mineral processing recovery rates, production levels, capital costs and reclamation costs. Such assumptions are based on the Company’s current mining plan and the best available information for making such estimates. The sum of the expected costs by year is discounted, using the Company's credit adjusted risk free interest rate. On an ongoing basis, management evaluates its estimates and assumptions; however, actual amounts could differ from those based on such estimates and assumptions.

Changes to the Company’s asset retirement obligations for active mining sites are as follows (in thousands):

	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013			2012
Asset retirement obligation - beginning	$	35,578		$	34,510		$	34,456		$	32,714
Accretion	777			714			2,277			2,180
Addition and changes in estimates	19,542			—			19,542			335
Settlements	(124		)	(13		)	(502		)	(18		)
Asset retirement obligation - ending	$	55,773		$	35,211		$	55,773		$	35,211

In addition, the Company has accrued $0.6 million and $0.9 million as of September 30, 2013 and December 31, 2012, respectively, for reclamation liabilities related to former mining activities. These amounts are also included in reclamation and mine closure liabilities. In the three months ended September 30, 2013, the Company increased its estimate of the reclamation obligations by $16.8 million at Rochester and $2.7 million at Kensington.