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FAIR VALUE ACCOUNTING
 12 Months Ended
Dec. 31, 2013
FAIR VALUE ACCOUNTING  
FAIR VALUE ACCOUNTING

NOTE 17 FAIR VALUE ACCOUNTING

        Fair value accounting establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

Level 1   Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2
 
Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3
 
Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

Assets and liabilities measured at fair value on a recurring basis

        The following tables set forth the fair value of the Company's assets and liabilities measured at fair value on a recurring basis (at least annually) by level within the fair value hierarchy as at December 31, 2013 and 2012. As required by accounting guidance, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

 
   Fair Value as a December 31, 2013  
 
   Total   Level 1   Level 2   Level 3  
 
   (in thousands)
  

Assets:

                          

Cash and cash equivalents

   $ 24,321   $ 24,321   $ —   $ —  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

 

   $ 24,321   $ 24,321   $ —   $ —  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   

Liabilities:

                          

Accounts payable and accrued liabilities

   $ 177   $ 177   $ —   $ —  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

 

   $ 177   $ 177   $ —   $ —  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   


 

 
   Fair Value as at December 31, 2012  
 
   Total   Level 1   Level 2   Level 3  
 
   (in thousands)
  

Assets:

                          

Cash and cash equivalents

   $ 70,921   $ 70,921   $ —   $ —  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

 

   $ 70,921   $ 70,921   $ —   $ —  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   

Liabilities:

                          

Litigation settlement liability

     3,830     3,830     —     —  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

 

   $ 3,830   $ 3,830   $ —   $ —  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   

        The Company's cash and cash equivalents is classified within Level 1 of the fair value hierarchy because it is valued using quoted market prices. The carrying value of this balance approximates its fair value due to its short-term nature and historically negligible credit losses. The cash equivalent instruments that are valued based on quoted market prices in active markets are primarily money market securities.

        As at December 31, 2013, accounts payable included an accrual of $0.2 million for the fair value of approximately 90,300 shares of common stock that are required to be issued as part of the settlement of certain amounts due by the Company to one of its vendors, as discussed in Note 10, Shareholders' Equity. As the Company's stock is quoted on an active market, this liability is classified within Level 1 of the fair value hierarchy.

        The litigation settlement liability at December 31, 2012 represented the fair value of the 1,000,000 shares of the Company's common stock that were required to be issued as part of the settlement with TNR Gold Corp. Since the Company's common stock is quoted on an active market, the liability was classified within Level 1 of the fair value hierarchy.

Assets and liabilities measured at fair value on a non-recurring basis

        In the second and fourth quarters of 2013, the Company recorded impairment charges related to certain of its mineral property interests in Nevada and Argentina, as well as its investment in MSC, as discussed in Notes 6 and 7, respectively. The estimated fair values of the Nevada and Argentina mineral property interests were determined using observed market values per acre in the respective regions. The estimated fair value of the Company's investment in MSC was determined using a discounted cash flow approach.

        The following table sets forth a summary of the quantitative and qualitative information related to the unobservable inputs used in the calculation of the Company's non-recurring Level 3 fair value measurements for the year ended December 31, 2013.

 
   Date of
Fair Value
Measurement		   Valuation Technique   Unobservable Input   Range /
Weighted Average

             Discount Rate   10.0%

             Long Term Gold Price   $1,300 per ounce

Investment in MSC

     June 30, 2013   Discounted cash flow   Long Term Silver Price   $22.75 per ounce

             Argentina Inflation Index   10.0%

             United States Inflation Index   1.7%

        The following non financial assets were measured at fair values on a non-recurring basis as part of the Company's impairment assessments during the year ended December 31, 2013.

 
   Date of Fair Value
Measurement		   Total   Level 1   Level 2   Level 3   Total Loss  
 
    
   (in thousands)
  

Mineral property interests

                                    

Telken Tenements(1)

   June 30, 2013   $ 26,442   $ —   $ —   $ 26,442   $ 13,792  

Este Tenements(1)

   June 30, 2013     5,337     —     —     5,337     2,784  

Piramides Tenements(1)

   June 30, 2013     9,736     —     —     9,736     5,079  

Tobias Tenements(1)

   June 30, 2013     11,645     —     —     11,645     6,074  

Limo Complex

   December 31, 2013     23,438     —     —     23,438     19,450  

Other United States Properties

   December 31, 2013     9,610     —     —     9,610     9,497  

Investment in MSC

   June 30, 2013     176,282     —     —     176,282     95,878  
                           
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

 

       $ 262,490   $ —   $ —   $ 262,490   $ 152,554  
                           
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
(1)
The fair values for the Telken, Este, Piramides and Tobias Tenements were determined prior to the transfer of these properties to MSC as part of the vend-in agreement between the Company and Hochschild, as described in Note 6, Mineral Property Interests and Asset Retirement Obligations, and Note 7, Investment in Minera Santa Cruz S.A. ("MSC")—San José Mine. As at December 31, 2013, these tenements were transferred to MSC and were therefore not included in the Company's mineral property interests as at December 31, 2013.