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LEASES
 12 Months Ended
Dec. 31, 2021
Leases [Abstract]  
LEASES LEASES
The Company’s operating leases consist primarily of leases for office space, vehicles, and plant and mining equipment. These leases have a range of terms between three months to twenty years with renewal terms included in the contracts. Some are automatic renewals, and some are at the option of the Company. There are no restrictions placed upon the lessee by entering into these leases. The Company’s finance leases consist primarily of equipment.
The Company's principal lease relates to its right to use the oxygen plant supplied by Air Liquide Gaz Sanayi ve Ticaret A.S. (the "Air Liquide Plant") at Çöpler which was assumed on the acquisition of Alacer (see Note 3). The Air Liquide Plant is used for the production, transportation and delivery of oxygen and liquid oxygen to support mining operations at Çöpler. Under the terms of the Air Liquide Plant lease, the Company pays variable monthly lease payments that depend on an index. In addition, the Company is subject to variable payments based on consumption and use which have been accounted for as non-lease components and included in Production costs. The Air Liquide Plant lease contains a non-cancellable period of 15 years ending in 2033 with options to extend for consecutive 2-year periods. The lease term used in the measurement of the Company's lease liability and right-of-use asset includes four consecutive 2-year extension periods ending in 2041 for which the Company is reasonably certain to exercise its option in line with the Çöpler LOM.
The Company uses its incremental borrowing rate as the discount rate to determine the present value of the lease payments, as the leases do not have readily determinable implicit discount rates. The Company’s incremental borrowing rate is the rate of interest that it would have to borrow on a collateralized basis over a similar term and amount in a similar economic environment to pay its lease obligations. The Company determines the incremental borrowing rates for its leases by adjusting the local risk-free interest rate with a credit risk premium corresponding to its credit rating. From time to time, the Company may enter into arrangements for the construction or purchase of an asset and then enter into a financing arrangement to lease the asset. The Company recognizes leased assets and liabilities under these arrangements when it obtain control of the asset.
The components of the Company’s leases presented in the Consolidated Balance Sheets were as follows (in thousands):
December 31,
20212020   
Finance lease right-of-use assets, net (included in Mineral properties, plant and equipment, net)
$
114,882 
$
112,808 
Operating lease right-of-use assets (included in Other non-current assets)
7,530 9,362 
Total lease right-of-use-assets
$122,412 $122,170 
 
    
Short-term finance lease liabilities (included in Finance lease liabilities)
$
12,439 
$
3,568 
Short-term operating lease liabilities (included in Accrued liabilities and other)
2,238 1,954 
Long-term finance lease liabilities (included in Finance Lease liabilities)
 105,965  109,544 
Long-term operating lease liabilities (included in Other non-current liabilities)
 5,525  7,530 
Total lease liabilities
$126,167 $122,596 
The components of the Company’s leases presented in the Consolidated Statements of Operations for the years ended December 31 were as follows (in thousands):
Years Ended December 31,
20212020   2019
Operating leases$2,986 $1,260 $521 
     
Finance leases:
Amortization of lease cost
 
2,517 
 
92 
 
70 
Interest expense on lease liabilities
274 12 14 
Variable and short-term leases 10,661  3,615 — 
Total$16,438 $4,979 $605 
For finance leases, amortization and interest expense is included in Interest expense. For operating leases, lease expense is included in Production costs for entities with production and General and administrative expense for entities without production.
The components of the Company’s leases presented in the statements of cash flows for the years ended December 31 were as follows (in thousands):
Years Ended December 31,
20212020   2019
Operating leases within cash flows from operating activities
$
2,986 $1,260 $521 
Finance leases within cash flows from financing activities
$
10,441 $3,623 $554 
The following is a schedule of weighted-average discount rates used to determine lease liabilities and remaining lease terms for the years ended December 31:
Years Ended December 31,
20212020   
Weighted-average remaining lease term - operating leases (in years)5.55.9
Weighted-average remaining lease term - finance leases (in years)19.120.7
Weighted-average discount rate - operating leases8.6 %9.4 %
Weighted-average discount rate - finance leases4.5 %4.6 %
The following is a schedule of future minimum lease payments under noncancellable finance and operating leases as of December 31, 2021 (in thousands):
Operating LeasesFinance Leases
2022
$
2,950 
$
16,907 
2023
1,520 8,532 
2024
1,374 8,532 
2025
1,218 8,532 
2026
1,234 8,532 
Thereafter1,548 122,023 
Total minimum lease payments
$
9,844 
$
173,058 
Less: amounts representing interest
2,081 54,654 
Present value of net minimum lease payments
7,763 118,404 
Less: current portion of lease liabilities
2,238 12,439 
Long-term lease liabilities  
$
5,525 
$
105,965 
LEASES LEASES
The Company’s operating leases consist primarily of leases for office space, vehicles, and plant and mining equipment. These leases have a range of terms between three months to twenty years with renewal terms included in the contracts. Some are automatic renewals, and some are at the option of the Company. There are no restrictions placed upon the lessee by entering into these leases. The Company’s finance leases consist primarily of equipment.
The Company's principal lease relates to its right to use the oxygen plant supplied by Air Liquide Gaz Sanayi ve Ticaret A.S. (the "Air Liquide Plant") at Çöpler which was assumed on the acquisition of Alacer (see Note 3). The Air Liquide Plant is used for the production, transportation and delivery of oxygen and liquid oxygen to support mining operations at Çöpler. Under the terms of the Air Liquide Plant lease, the Company pays variable monthly lease payments that depend on an index. In addition, the Company is subject to variable payments based on consumption and use which have been accounted for as non-lease components and included in Production costs. The Air Liquide Plant lease contains a non-cancellable period of 15 years ending in 2033 with options to extend for consecutive 2-year periods. The lease term used in the measurement of the Company's lease liability and right-of-use asset includes four consecutive 2-year extension periods ending in 2041 for which the Company is reasonably certain to exercise its option in line with the Çöpler LOM.
The Company uses its incremental borrowing rate as the discount rate to determine the present value of the lease payments, as the leases do not have readily determinable implicit discount rates. The Company’s incremental borrowing rate is the rate of interest that it would have to borrow on a collateralized basis over a similar term and amount in a similar economic environment to pay its lease obligations. The Company determines the incremental borrowing rates for its leases by adjusting the local risk-free interest rate with a credit risk premium corresponding to its credit rating. From time to time, the Company may enter into arrangements for the construction or purchase of an asset and then enter into a financing arrangement to lease the asset. The Company recognizes leased assets and liabilities under these arrangements when it obtain control of the asset.
The components of the Company’s leases presented in the Consolidated Balance Sheets were as follows (in thousands):
December 31,
20212020   
Finance lease right-of-use assets, net (included in Mineral properties, plant and equipment, net)
$
114,882 
$
112,808 
Operating lease right-of-use assets (included in Other non-current assets)
7,530 9,362 
Total lease right-of-use-assets
$122,412 $122,170 
 
    
Short-term finance lease liabilities (included in Finance lease liabilities)
$
12,439 
$
3,568 
Short-term operating lease liabilities (included in Accrued liabilities and other)
2,238 1,954 
Long-term finance lease liabilities (included in Finance Lease liabilities)
 105,965  109,544 
Long-term operating lease liabilities (included in Other non-current liabilities)
 5,525  7,530 
Total lease liabilities
$126,167 $122,596 
The components of the Company’s leases presented in the Consolidated Statements of Operations for the years ended December 31 were as follows (in thousands):
Years Ended December 31,
20212020   2019
Operating leases$2,986 $1,260 $521 
     
Finance leases:
Amortization of lease cost
 
2,517 
 
92 
 
70 
Interest expense on lease liabilities
274 12 14 
Variable and short-term leases 10,661  3,615 — 
Total$16,438 $4,979 $605 
For finance leases, amortization and interest expense is included in Interest expense. For operating leases, lease expense is included in Production costs for entities with production and General and administrative expense for entities without production.
The components of the Company’s leases presented in the statements of cash flows for the years ended December 31 were as follows (in thousands):
Years Ended December 31,
20212020   2019
Operating leases within cash flows from operating activities
$
2,986 $1,260 $521 
Finance leases within cash flows from financing activities
$
10,441 $3,623 $554 
The following is a schedule of weighted-average discount rates used to determine lease liabilities and remaining lease terms for the years ended December 31:
Years Ended December 31,
20212020   
Weighted-average remaining lease term - operating leases (in years)5.55.9
Weighted-average remaining lease term - finance leases (in years)19.120.7
Weighted-average discount rate - operating leases8.6 %9.4 %
Weighted-average discount rate - finance leases4.5 %4.6 %
The following is a schedule of future minimum lease payments under noncancellable finance and operating leases as of December 31, 2021 (in thousands):
Operating LeasesFinance Leases
2022
$
2,950 
$
16,907 
2023
1,520 8,532 
2024
1,374 8,532 
2025
1,218 8,532 
2026
1,234 8,532 
Thereafter1,548 122,023 
Total minimum lease payments
$
9,844 
$
173,058 
Less: amounts representing interest
2,081 54,654 
Present value of net minimum lease payments
7,763 118,404 
Less: current portion of lease liabilities
2,238 12,439 
Long-term lease liabilities  
$
5,525 
$
105,965