XML 48 R12.htm IDEA: XBRL DOCUMENT
v2.4.0.6

MINERAL PROPERTY INTERESTS AND ASSET RETIREMENT OBLIGATIONS | 9 Months Ended
--- | ---
Sep. 30, 2012
MINERAL PROPERTY INTERESTS AND ASSET RETIREMENT OBLIGATIONS |
MINERAL PROPERTY INTERESTS AND ASSET RETIREMENT OBLIGATIONS |
NOTE 6 MINERAL PROPERTY INTERESTS AND ASSET RETIREMENT OBLIGATIONS At September 30, 2012, the Company holds mineral interests in Nevada, mineral rights in Argentina and mineral concession rights in Mexico, including the El Gallo complex. The Magistral Mine is a former producing gold mine located within the El Gallo complex which has been held on a care and maintenance basis since 2005. In August 2011, the Company announced that it would put this mine back into production as Phase 1 of mining operations at the El Gallo complex, and the Company had its first gold pour during September 2012. The first gold pour produced 298 oz of gold and 129 oz of silver. For accounting purposes, the Company has achieved commercial production in September 2012. During the third quarter of 2012, the Company rationalized its mineral property interests in Nevada in order to focus its exploration program on more prospective areas. As a result, the Company allowed certain claims from three of its Nevada properties in the Other United States Properties, Big Antelope Springs, Kent Springs and Buffalo Canyon, to lapse. These mineral property interests in question were acquired in 2007 and had a carrying value of $2.9 million, which was written off during the third quarter, along with a resulting reduction in deferred tax liability and recovery of future income taxes of $1.0 million. This resulted in a net write-off for the Company of $1.9 million which is included in the net loss for the nine months period ended September 30, 2012. The Company increased its mineral property interests by $539.8 million, of which $541.7 million was due to the acquisition of Minera Andes as discussed in Note 2 above, to $785.3 million as at September 30, 2012 from $245.5 million at the end of 2011. The values for the mineral properties from Argentina noted below are on a preliminary basis. The following table summarizes all of the Company’s mineral property interests in Nevada, Argentina and Mexico (in thousands):
Name of Property/Complex |  | State/Province |  | Country |  | Carrying Value |
Tonkin Complex |  | Nevada |  | United States |  | $ | 52,204 |
Gold Bar Complex |  | Nevada |  | United States |  | $ | 77,012 |
Limo Complex |  | Nevada |  | United States |  | $ | 50,098 |
Battle Mountain Complex |  | Nevada |  | United States |  | $ | 31,106 |
Other United States Properties |  | Nevada |  | United States |  | $ | 19,107 |
Los Azules Copper Project |  | San Juan |  | Argentina |  | $ | 431,190 |
Other Argentina Exploration Properties |  | San Juan |  | Argentina |  | $ | 7,819 |
Cerro Negro Region |  | Santa Cruz |  | Argentina |  | $ | 80,889 |
Other Argentina Exploration Properties |  | Santa Cruz |  | Argentina |  | $ | 19,194 |
Other Argentina Exploration Properties |  | Catamarca |  | Argentina |  | $ | 2,362 |
Other Argentina Exploration Properties |  | Chubut |  | Argentina |  | $ | 248 |
El Gallo Complex |  | Sinaloa |  | Mexico |  | $ | 9,469 |
Other Mexico Exploration Properties |  | Sinaloa |  | Mexico |  | $ | 4,580 |
Total |  |  |  |  |  | $ | 785,278 |
The Company is responsible for reclamation of certain past and future disturbances at its properties. The two most significant properties subject to these obligations are the historic Tonkin property in Nevada and the Magistral mine portion of the El Gallo Complex in Mexico. The current undiscounted estimate of the reclamation costs for existing disturbances on the Tonkin property to the degree required by the U.S. Bureau of Land Management (“BLM”) and the Nevada Department of Environmental Protection (“NDEP”) is $3.0 million. The Company submitted a mine closure plan to the NDEP and BLM for the Tonkin property during the fourth quarter of 2010. Based on the Company’s estimate, the change in its bonding requirements was insignificant. As at September 30, 2012, the closure plan has already been approved by the NDEP but is still currently under review by the BLM. It is possible that reclamation plan cost estimates and bonding requirements may increase as a result of its review. The Company, however, is unable to meaningfully estimate possible increases at this time. The costs of undiscounted projected reclamation of El Gallo Phase 1 are currently estimated at $4.6 million. For mineral properties in the United States, the Company maintains required reclamation bonding with various governmental agencies, and at September 30, 2012 and December 31, 2011, had cash bonding in place of $5.2 million. Under Mexican regulations, surety bonding of projected reclamation costs is not required. Changes in the Company’s asset retirement obligations for the nine months ended September 30, 2012 and year ended December 31, 2011 are as follows (in thousands):
|  | Nine Months Ended |  | Year Ended |
|  | September 30, |  | December 31, |
|  | 2012 |  | 2011 |
Asset retirement obligation liability- opening balance |  | $ | 6,253 |  | $ | 6,153 |
Settlements |  | (24 | ) | (82 | )
Accretion of liability |  | 342 |  | 524 |
Adjustment reflecting updated estimates |  | (79 | ) | (342 | )
Asset retirement obligation liability - ending balance |  | $ | 6,492 |  | $ | 6,253 |
It is anticipated that the capitalized asset retirement costs will be charged to expense based on the units of production method commencing with gold and silver production at the Company’s properties, if any. There was no amortization adjustment recorded during the three and nine months ended September 30, 2012 or the year ended December 31, 2011 related to the capitalized asset retirement cost since the properties were not in operation. Reclamation expenditures are expected to be incurred between 2012 and 2040. As at September 30, 2012, the current portion of the asset retirement obligation was $0.3 million (December 31, 2011 — $0.5 million).

X
- Details
Name: | mux_MineralPropertyInterestsAndAssetRetirementObligationsDisclosureAbstact
Namespace Prefix: | mux_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Description of the mineral property interests and the asset retirement obligations associated with long-lived assets. Mineral property interests are carried at acquisition cost, net of write-offs and impairments. An asset retirement obligation is a legal obligation associated with the disposal or retirement from service of a tangible long-lived asset that results from the acquisition, construction or development, or the normal operations of a long-lived asset, except for certain obligations of lessees. This element may be used for all the disclosures related to asset retirement obligations. + References No definition available. + Details
Name: | mux_MineralPropertyInterestsAndAssetRetirementObligationsDisclosureTextBlock
Namespace Prefix: | mux_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration