15.

Asset retirement obligations


	Greece			Brazil			Turkey			Romania		Canada		Total
	$			$			$			$		$		$
At January 1, 2017		48,131			4,092			36,196			1,359		-		89,778
Acquired during the year		-			-			-			-		9,453		9,453
Accretion during the year		1,025			32			913			36		-		2,006
Revisions to estimate of obligation		1,112			(80	)		502			10		-		1,544
Settlements		(2,807	)		-			(290	)		-		-		(3,097	)
At December 31, 2017		47,461			4,044			37,321			1,405		9,453		99,684
Less: Current portion		(3,489	)		-			-			-		-		(3,489	)
Long term portion		43,972			4,044			37,321			1,405		9,453		96,195
Estimated undiscounted amount		71,591			4,117			49,257			2,340		12,286		139,591

The Company’s asset retirement obligations relate to the restoration and rehabilitation of the Company’s mining operations and projects under development. The expected timing of the cash flows in respect of the provision is based on the estimated life of the various mining operations. The increase in the estimate of the obligation in 2017 was mainly due to the acquisition of Integra.

The provision is calculated as the present value of estimated future net cash outflows based on the following key assumptions:

Greece

Brazil

Turkey

Romania

Canada

At December 31, 2016

Inflation rate

2.0 to 2.4

Discount rate

1.5 to 3.0

0.8

2.3 to 2.5

2.7

At December 31, 2017

Inflation rate

2.0 to 2.2

Discount rate

1.5 to 3.0

1.8

2.3 to 2.5

2.7

2.3 to 2.5

The discount rate is a risk-free rate determined based on U.S. Treasury bond rates. U.S. Treasury bond rates have been used for all of the mine sites as the liabilities are denominated in U.S. dollars and the majority of the expenditures are expected to be incurred in U.S. dollars. Similarly, the inflation rates used in determining the present value of the future net cash outflows are based on U.S inflation rates.

Environmental guarantee deposits exist with respect to the environmental rehabilitation of the Lamaque project (note 10).

Additionally, the Company has the following:

a) a €50.0 million Letter of Guarantee to the Greek Ministry of Environment, Energy and Climate Change as security for the due and proper performance of rehabilitation works committed in relation to the mining and metallurgical facilities of the Kassandra Mines (Stratoni, Olympias and Skouries) and the removal, cleaning and rehabilitation of the old Olympias tailings. This Letter of Guarantee is renewed annually, expires on July 26, 2026 and has an annual fee of 57 basis points.

b) a €7.5 million Letter of Guarantee to the Greek Ministry of Environment and Energy for the due and proper performance of the Kokinolakas Tailings Management Facility, committed in connection with the Environmental Impact Assessment approved for the Kassandra Mines (Stratoni, Olympias and Skouries). The Letter of Guarantee is renewed annually and expires on July 26, 2026. The Letter of Guarantee has an annual fee of 45 basis points.