14. LEASES

The Company’s lease portfolio consists of operating leases for corporate offices, storage space and equipment. The leases have remaining lease terms of 3 months to 3 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:


	Nine months		Nine months
	ended		ended
		September 30,		September 30,
(thousands of dollars)	2020		2019
Operating Lease Cost
Continuing Operations	$	112	$	112
Discontinued Operations		4		4
	$	116	$	116

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


		Nine months				Nine months
		ended				ended
		September 30, 2020				September 30, 2019
(thousands of dollars)		Continuing Operations		Discontinued Operations		Continuing Operations		Discontinued Operations
Cash paid for amounts included in lease liabilities:

Cash flows from operating leases	$	115	$	4	$	113	$	4

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	383	$	10	$	498	$	15

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


	September 30,				December 31,
	2020				2019
(thousands of dollars, except lease term and discount rate)		Continuing Operations		Discontinued Operations		Continuing Operations		Discontinued Operations
Operating Leases
Operating lease right-of-use assets	$	383	$	10	$	470	$	14

Current portion of lease liabilities		149		10		147		6
Operating lease liabilities – long term portion		245		—		332		8
Total operating lease liabilities	$	394	$	10	$	479	$	14

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


	September 30,		September 30,
	2020		2019
Weighted Average Remaining Lease Term (in years)	3.0		4.0

Discount Rate	9.5	%	9.5	%

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


	September 30,
	2020
Lease payments by year (In thousands)		Continuing Operations		Discontinued Operations
2020 (remainder of year )	$	38	$	2
2021		155		6
2022		158		4
2023		92		—
Total lease payments		443		12
Less imputed interest		(49)		(2)
Total Operating Lease Liability	$	394	$	10

As of September 30, 2020, the Company has $0.4 million in right-of-use assets and $0.4 million in related lease liabilities ($0.1 million of which is current). The most significant operating lease is for its corporate office in Centennial, Colorado, with $0.4 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 $0.4 million.

All but one operating lease are part of the company’s Continuing Operations. In May 2017 the Company’s wholly-owned subsidiary, URI, Inc. entered into an irrevocable 63 month equipment and servicing lease for a Toshiba copier used in its office in Kingsville, Texas. This lease is included in the disposal group that will be transferred to enCore in the sale of the Company’s U.S. uranium properties expected to close by year-end 2020. At September 30, 2020, there was 22 months left on the lease with a right-of-use asset balance of approximately $10,000 and a related lease liability for the same amount. These balances are included in assets held for sale and liabilities related to assets held for sale on the balance sheet. Monthly lease payments are included in the Income/Loss from Discontinued Operations.