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RELATED PARTY TRANSACTIONS
 12 Months Ended
Dec. 31, 2012
RELATED PARTY TRANSACTIONS  
RELATED PARTY TRANSACTIONS

NOTE 15 RELATED PARTY TRANSACTIONS

        Since 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, 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 Lexam L.P. is 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, 2012, the Company incurred and paid $0.3 million (2011—$0.1 million) to Lexam L.P. for the use of this aircraft.

        Ending in 2011, the Company had a 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. 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. Effective January 2012, the Company no longer required the services agreement with 208 as those costs are now paid directly by the Company. During the year ended December 31, 2011, the Company incurred and paid $0.1 million under the agreement.

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

        As previously discussed in Note 11 Mr. McEwen purchased 2.8 million shares of common stock and 3.9 million Exchangeable Shares, in connection with the rights offering in 2012, for a total cost of $15.1 million. The rights exercised by Mr. McEwen were on the same terms and conditions as the other shareholders.