Reclamation and Mine Closure

9 Months Ended

Sep. 30, 2011

Reclamation and Mine Closure [Abstract]

Asset retirement obligation

NOTE 11 – 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. 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 are as follows (in thousands):

	Three months ended September 30,						Nine months ended September 30,
	2011			2010			2011			2010
Asset retirement obligation - Beginning	$	28,557		$	26,255		$	27,302		$	25,112
Accretion		670			590			1,961			1,729
Addition and changes in estimates		—			—			—			18
Settlements		(15	)		(13	)		(51	)		(27	)
Asset retirement obligation - September 30	$	29,212		$	26,832		$	29,212		$	26,832

In addition, the Company has accrued $0.9 million and $1.8 million, as of September 30, 2011 and December 31, 2010, respectively, for reclamation liabilities related to former mining activities. These amounts are also included in reclamation and mine closure liabilities.

On January 13, 2011, the Company entered into The Rochester Mine Irrevocable Trust (the “Trust”), to provide financial assurance of performance of post-closure monitoring and maintenance obligations for the Rochester Mine Plan of Amendment. The Company deposited $0.7 million into the Trust. The primary beneficiary of the trust is the Bureau of Land Management and the trust funds must be used solely to pay expenses related to post-closure monitoring and maintenance obligations. The Trust will terminate on the earlier of (i) 365 years from the initial date of the trust agreement, or (ii) the expiration of the longest period applicable to the assets of the Trust under the rule against perpetuities of the situs of the Trust.