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Reclamation Bond Deposit
12 Months Ended
Dec. 31, 2012
Reclamation Bond Deposit [Abstract]  
Reclamation Bond Deposit

10. Reclamation Bond Deposit

 

We are required to mitigate long-term environmental impacts by stabilizing, contouring, resloping, and revegetating various portions of a site after mining and mineral processing operations are completed. These reclamation efforts are conducted in accordance with plans reviewed and approved by the appropriate regulatory agencies.

 

The Nevada Revised Statutes and regulations promulgated by the Nevada State Environmental Commission and the Nevada Division of Environmental Protection, Bureau of Mining and Reclamation require a surety bond to be posted for mining projects that leave the site safe, stable and capable of providing for a productive post-mining land use. The Nevada State Environmental Commission and Division of Environmental Protection have approved our most recent reclamation plan, as revised, of $4,666,091 and we have posted a surety for this amount. The reclamation bond deposit represents the required cash collateral and other required bond deposits of approximately $2.5 million and $722,000 at December 31, 2012 and 2011, respectively.

 

In July 2012, the Company placed a $4.67 million reclamation surety bond through the Lexon Surety Group ("Lexon") with the State of Nevada's Bureau of Mining Regulation Reclamation ("BMRR"). The bond insures for the estimated costs required to safely reclaim the natural environment to the regulatory standards established by the State of Nevada's Division of Environmental Protection with the purposes of ensuring public safety, protecting the waters of the state, and providing for post mining land use. As part of the surety agreement, the Company agreed to pay a 2.5% annual bonding fee. The cash collateral due to Lexon is approximately $2.3 million and will be paid in installments over the next two years. At December 31, 2012, accrued expenses included approximately $1.4 million and other liabilities included approximately $700,000 remaining due to Lexon for the cash collateral.