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Long-Term Reclamation Liability and Retirement Obligation Asset
 12 Months Ended
Dec. 31, 2012
Long-Term Reclamation Liability and Retirement Obligation Asset [Abstract]  
Long-Term Reclamation Liability and Retirement Obligation Asset

11. Long-term Reclamation Liability and Retirement Obligation Asset

 

We have accrued a long-term liability of $4,597,156 and $2,007,605 as of December 31, 2012 and 2011, respectively, for our obligation to reclaim our mine facility based on our most recent reclamation plan, as revised, submitted and approved by the Nevada State Environmental Commission and Division of Environmental Protection. In conjunction with recording the reclamation liability, we recorded a retirement obligation asset that is being amortized over the period of the anticipated land disturbance. Such costs are based on management's current estimate of then expected amounts for the remediation work, assuming the work is performed within current laws and regulations. It is reasonably possible that, due to uncertainties associated with the application of laws and regulations by regulatory authorities and changes in reclamation or remediation technology, the ultimate cost of reclamation and remediation could change in the future. We periodically review the accrued reclamation liability for information indicating that our estimated liabilities may change. The accretion of reclamation liability and the amortization of the retirement obligation asset for the years ended December 31, 2012, 2011 and 2010 were $611,714, $188,751, and $146,566 respectively.

 

Following is a reconciliation of the aggregate retirement liability associated with our reclamation plan for the mining projects for the years ended December 31, 2012, 2011 and 2010:

 

    2012     2011     2010  
Long-term reclamation liability - beginning of period   $ 2,007,605     $ 1,332,730     $ 1,186,966  
Additional obligations incurred     2,405,314       577,529       58,447  
Accretion of reclamation liability     184,237       97,346       87,317  
Long-term reclamation liability - end of period   $ 4,597,156     $ 2,007,605     $ 1,332,730  

 

Following is a reconciliation of the aggregate retirement obligation asset associated with our mining projects for the years ended December 31, 2012, 2011 and 2010:

 

    2012     2011     2010  
Retirement obligation asset - beginning of period   $ 825,481     $ 339,357     $ 340,159  
Additional obligations incurred     2,405,314       577,529       58,447  
Amortization of retirement obligation asset     (427,477 )     (91,405 )     (59,249 )
Retirement obligation asset - end of period   $ 2,803,318     $ 825,481     $ 339,357  

 

Additions to the reclamation liability in 2012 and 2011 related primarily to the preparation and commencement of mining production activities.