XML 38 R18.htm IDEA: XBRL DOCUMENT v2.4.0.6
RELATED PARTY TRANSACTIONS
 12 Months Ended
Dec. 31, 2011
RELATED PARTY TRANSACTIONS  
RELATED PARTY TRANSACTIONS

 

NOTE 12 RELATED PARTY TRANSACTIONS

        Effective January 1, 2011, the Company renewed its management services agreement ("Services Agreement") with 2083089 Ontario Inc. ("208") pursuant to which the Company agreed to reimburse 208 for rent, personnel, office expenses and other administrative services on a cost recovery basis. A similar contract existed between the Company and 208 for calendar year 2010 and 2009. 208 is owned by Robert McEwen, the Chairman and Chief Executive Officer of the Company and beneficial owner of more than 5% of its voting securities. Mr. McEwen is also the Chief Executive Officer and Director of 208. The Company paid $0.1 million in 2011 and 2010 under these agreements.

        Beginning in the second quarter of 2010, an aircraft owned and operated by Lexam L.P (of which Mr. McEwen is a limited partner and beneficiary) has been made available to the Company in order to expedite business travel. In his role as Chairman and Chief Executive Officer of the Company, as well as senior management of two other junior mining companies, Mr. McEwen must travel extensively and frequently on short notice.

        Mr. McEwen is able to charter the aircraft from Lexam L.P. at a preferential rate. The Company's independent board members have approved a policy whereby only the variable expenses of operating this aircraft for business related travel are eligible for reimbursement by the Company. The hourly amount that the Company has agreed to reimburse Mr. McEwen is well under half the full cost per hour of operating the aircraft or equivalent hourly charter cost and in any event less than even Mr. McEwen's preferential charter rate. Where possible, trips also include other company personnel, both executives and non-executives, to maximize efficiency.

        For the year ended December 31, 2011, the Company paid $0.1 million to Lexam L.P for the use of this aircraft.

        Each of the above agreements were approved or ratified by the independent members of the Company's Board of Directors.

        During the fourth quarter of 2011, as a result of moving the Company's corporate office, which is shared with Lexam VG Gold Inc. and Minera Andes Inc., the Company recorded a net receivable of $30,000 and $51,113, respectively, totalling $81,113, related to rent and office expenses. As at December 31, 2011 the full balance remains outstanding and has been recorded in other current assets.