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Fair Value Of Financial Instruments
 6 Months Ended
Jun. 30, 2013
Fair Value Of Financial Instruments [Abstract]  
Fair Value of Financial Instruments

15. Fair Value Accounting

 

U.S. GAAP defines fair value as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price) and establishes a fair value hierarchy that prioritizes the inputs used to measure fair value using the following definitions (from highest to lowest priority): 

 

·

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

 

·

Level 2 – Observable inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means.

 

·

Level 3 – Prices or valuation techniques requiring inputs that are both significant to the fair value measurement and unobservable. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair value at June 30, 2013

 

 

 

 

Total

 

Level 1

 

Level 3

Assets:

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$
6,660 

$
6,660 

$

 -

 

Marketable securities

 

 
239 

 
239 

 

 -

 

Other investments (Midas Gold shares)

 

 
22,167 

 
22,167 

 

 -

 

Amayapampa interest

 

 
4,813 

 

 -

 
4,813 

 

Mill equipment

 

 
10,000 

 

 -

 
10,000 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair value at December 31, 2012

 

 

 

 

Total

 

Level 1

 

Level 3

Assets:

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$
15,834 

$
15,834 

$

 -

 

Marketable securities

 

 
626 

 
626 

 

 -

 

Other investments (Midas Gold shares)

 

 
69,489 

 
69,489 

 

 -

 

Amayapampa interest

 

 
4,813 

 

 -

 
4,813 

 

Mill equipment

 

 
10,000 

 

 -

 
10,000 

 

Our cash equivalent instruments, marketable securities and investment in Midas Gold are classified as Level 1 of the fair value hierarchy as they are valued at quoted market prices in an active market. 

 

The estimated fair value of the Amayapampa interest is based on probability-weighted cash flow scenarios discounted using a risk-adjusted discount rate (15%) and assumptions including future gold prices (average gold prices realized range from $1,038 to $1,247 per ounce, depending on timing of assumed start-up), estimated life-of-mine gold production (ranging from 350,000 to 650,000 ounces) and the expected timing of commercial production (periods ranging from 3 to 6 years or never), which are management’s best estimates based on currently available information. Significant changes in any of the unobservable inputs in isolation would result in a significant change in fair value measurement. As a result of our analysis no change in fair value was deemed necessary as of June 30, 2013.

 

The Company incurred an impairment loss on certain mill equipment in 2012. This equipment was valued at $10,000 based on a third party assessment of the projected sale value. The mill equipment is categorized as assets held for sale on the Consolidated Balance Sheets.

 

At June 30, 2013, the assets classified within Level 3 of the fair value hierarchy represent 34% of the total assets measured at fair value.  There were no transfers between levels in 2013.