13. LEASES

The Company’s lease portfolio consists of operating leases for corporate offices, storage space and equipment. The leases have remaining lease terms of 1 to 3.5 years, one of which includes an option to extend the corporate office lease for 3 years. Under our corporate office lease, we are required to reimburse the lessor each month for common use expenses such as maintenance and security services. Because these amounts are variable from year to year and not specifically set in the lease terms, they are not included in the measurement of the right-of-use asset and related lease liability, but rather expensed in the period incurred.

The Company is party to several leases that are for under one year in length. These include such leases as those for land used in exploration and mining activities, office equipment, machinery, office space, storage and other. The Company has elected the short-term lease exemptions allowed under the new leasing standards, whereby leases with initial terms of one year or less are not capitalized and instead expensed on a straight-line basis over the lease term. In addition, the Company holds numerous leases related to mineral exploration and production to which it has not applied the new leasing standard. Leases to explore or use minerals and similar nonregenerative resources are specifically excluded by ASC 842-10.

The right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term using a discount rate of 9.5%. This rate is the Company’s current estimated incremental borrowing rate.

The components of lease expense are as follows:

Supplemental cash flow information related to the Company’s operating leases is as follows:


	Six months		Six months
	ended		ended
(thousands of dollars)	June 30, 2020		June 30, 2019
Cash paid for amounts included in lease liabilities:

Operating cash flows from operating leases	$	79	$	77

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	424	$	541

Supplemental balance sheet information related to the Company’s operating leases is as follows:


	June 30,		December 31,
(thousands of dollars, except lease term and discount rate)	2020		2019
Operating Leases
Operating lease right-of-use assets	$	424	$	484

Current portion of lease liabilities	$	154	$	153
Operating lease liabilities – long term portion		280		340
Total operating lease liabilities	$	434	$	493

Weighted-average remaining lease term and discount rate for the Company’s operating leases are as follows:


	June 30,		June 30,
	2020		2019
Weighted Average Remaining Lease Term (in years)	3.2		4.2

Discount Rate	9.5	%	9.5	%

Maturities of lease liabilities for the Company’s operating leases are as follows:


	June 30,
Lease payments by year (In thousands)	2020
2020 (remainder of year )	$	81
2021		161
2022		162
2023		92
Total lease payments		496
Less imputed interest		(62)
Total	$	434

As of June 30, 2020, the Company has $0.4 million in right-of-use assets and $0.4 million in related lease liabilities ($0.2 million of which is current). The most significant operating lease is for its corporate office in Centennial, Colorado, with $0.5 million remaining in undiscounted cash payments through the end of the lease term in 2023. The total undiscounted cash payments remaining on operating leases through the end of their respective terms is $0.5 million.

Six months

Six months

(thousands of dollars)

Operating lease cost