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INCOME TAXES | 12 Months Ended
--- | ---
Dec. 31, 2012
INCOME TAXES |
INCOME TAXES | NOTE 10 INCOME TAXES In various transactions entered into on February 21, 1992, as well as transactions during 2005, the Company had ownership changes, as that term is defined under the Internal Revenue Code ("IRC") Section 382 (g). As a result, the tax net operating loss carryforwards and the investment tax credit carryforwards are subject to annual limitations under IRC Section 382, following the date of such ownership change. Except as noted below, the Company may receive delayed future benefits from net operating loss carryforwards or investment tax credit carryforwards existing as of the dates of the ownership change. At December 31, 2012 and 2011, the Company estimates those tax loss carry forwards to be $252.9 million and $140.5 million, respectively expiring starting in 2013 and going through 2032. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2012 and 2011 respectively, are presented below:
|  | 2012 |  | 2011 |
--- | --- | --- | --- | --- | ---
|  | (in thousands) |
Deferred tax assets: |  |  |  |  |  |  |
Alternative minimum tax (AMT) credit carryforward |  | $ | 41 |  | $ | 41 |
Net operating loss carryforward |  |  | 80,975 |  |  | 46,211 |
Mineral Property |  |  | 297 |  |  | 2,528 |
Other temporary differences |  |  | 9,521 |  |  | 5,330 |
Capital loss carryforward |  |  | 241 |  |  | 241 |
Total gross deferred tax assets |  |  | 91,075 |  |  | 54,351 |
Less: valuation allowance |  |  | (90,477 | ) |  | (53,578 | )
Net deferred tax assets |  | $ | 598 |  | $ | 773 |
Deferred tax liabilities: |  |  |  |  |  |  |
Reclamation obligation |  |  | 416 |  |  | 282 |
Mineral Property |  |  | — |  |  | (41 | )
Basis in Tonkin Springs Venture LP |  |  | (1,014 | ) |  | (1,014 | )
Acquisition related deferred tax liability |  |  | (229,522 | ) |  | (78,786 | )
Total deferred tax liabilities |  | $ | (230,120 | ) | $ | (79,559 | )
Total net deferred tax liability |  | $ | (229,522 | ) | $ | (78,786 | )
The Company believes that it is unlikely that the gross deferred tax asset will be realized. Therefore, a valuation allowance has been provided for most of the gross deferred tax assets. The change in valuation allowance of approximately $36.9 million primarily reflects an increase of net operating loss carryforwards. The acquisition related deferred tax liability for 2012 consists of $229.1 million and $0.4 million for mineral properties and fixed assets, respectively. A reconciliation of the tax provision for 2012, 2011 and 2010 at statutory US Federal and State income tax rates to the actual tax provision recorded in the financial statement is comprised of the following components:
|  | 2012 |  | 2011 |  | 2010 |
--- | --- | --- | --- | --- | --- | --- | ---
|  | (in thousands) |
US Federal and State tax recovery at statutory rate |  | $ | (31,925 | ) | $ | (21,098 | ) | $ | (11,895 | )
Reconciling items: |  |  |  |  |  |  |  |  |  |
Equity pickup in MSC |  |  | (7,292 | ) |  | — |  |  | — |
FIN 48 adjustment due to tax years becoming statute barred |  |  | — |  |  | (180 | ) |  | — |
Prior year true ups/acquisitions |  |  | 781 |  |  | (8,074 | ) |  | 56 |
Adjustment for foreign tax rates |  |  | 3,245 |  |  | 1,342 |  |  | 853 |
Tax rate changes |  |  | (1,869 | ) |  | (24 | ) |  | 2 |
Imputed interest |  |  | 135 |  |  | 119 |  |  | 104 |
Other permanent differences |  |  | (3,259 | ) |  | 8,869 |  |  | 1,621 |
Unrealized foreign exchange rate (loss)/gain |  |  | (21,263 | ) |  | (31 | ) |  | 139 |
NOL expired |  |  | (2,696 | ) |  | 2,862 |  |  | 746 |
Valuation allowance |  |  | 36,899 |  |  | 16,035 |  |  | 6,376 |
Tax Recovery |  | $ | (27,244 | ) | $ | (180 | ) | $ | (1,998 | )
As at December 31, 2012, there are no unrecognized tax benefits. The Company or its subsidiaries file income tax returns in Canada, the United States, Mexico, and Argentina. These tax returns are subject to examination by local taxation authorities provided the tax years remain open to audit under the relevant statute of limitations. The following summarizes the open tax years by major jurisdiction: United States: 2009 to 2012 Canada: 2005 to 2012 Mexico: 2008 to 2012 Argentina: 2008 to 2012

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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