ASSET RETIREMENT OBLIGATION

9 Months Ended

Sep. 30, 2020

9. ASSET RETIREMENT OBLIGATIONS (“ARO”)

The following table summarizes the changes in the reserve for future restoration and reclamation costs on the balance sheet:


	September 30,		December 31,
(thousands of dollars)	2020		2019
Balance, beginning of period	$	6,300	$	6,203
Liabilities settled		(501)		(293)
Accretion expense		170		390
Balance, end of period		5,969		6,300
Less: ARO included in current liabilities held for sale		(5,969)		(894)
ARO included in liabilities held for sale, non-current	$	—	$	5,406

Asset retirement obligations primarily consist of estimated reclamation costs for the Company’s ISR projects in South Texas. These obligations are fully secured by performance obligation bonds totaling approximately $9.3 million and partially collateralized by $3.8 million in restricted cash. In early September 2020, Westwater entered into an agreement with enCore Energy Corp to sell its U.S. uranium assets, including those properties in Texas that are subject to the restoration obligations above (see Note 8). These assets and related liabilities were classified as held for sale during the current period and are reported on the Company’s Condensed Consolidated Balance Sheet. The sale is expected to close by year-end 2020, at which time all bonding obligations and nearly $6.0 million in reclamation liabilities will be transferred to enCore. Until the transaction closes, the Company will continue to perform plugging and surface reclamation activities at its Rosita and Vasquez projects located in Duval County, Texas.