Reclamation and Remediation

6 Months Ended

Jun. 30, 2018

10. Reclamation and Remediation

The Company’s reclamation and remediation obligations primarily relate to the Aguila Project. The following table presents the changes in reclamation and remediation obligations for the six months ended June 30, 2018 and year ended December 31, 2017:


	2018		2017
	(in thousands)
Reclamation liabilities – balance at beginning of period	$	2,005	$	1,907
Changes in estimate		-		10
Foreign currency exchange (gain) loss		(15)		88
Reclamation liabilities – balance at end of period		1,990		2,005

Asset retirement obligation – balance at beginning of period		941		518
Changes in estimate		-		366
Accretion expense		40		35
Foreign currency exchange (gain) loss		(10)		22
Asset retirement obligation – balance at end of period		971		941
Total period end balance	$	2,961	$	2,946

The Company’s reclamation and remediation obligations as of June 30, 2018 and December 31, 2017 were discounted using a discount rate of 8%.

The Company is required to post bonds with the Bureau of Land Management (“BLM”) for reclamation of planned mineral exploration and development programs associated with the Company’s mineral properties located on BLM lands in the United States. As a part of the permitting process for the Isabella Pearl project, the Company is currently required to have a reclamation bond of approximately $9.2 million held with the BLM. The Company purchased a surety contract for the reclamation bond which did not require any cash collateral. The Company is required to maintain the reclamation bond until all abandonment and remediation obligations have been completed to the satisfaction of the BLM. The surety contract names the Company’s subsidiary Walker Lane Minerals Corp. as an indemnitor to the surety agreement. The surety may require additional collateral to be placed into the reclamation deposit account at their discretion. As of June 30, 2018, the Company did not incur any significant disturbances related to the Isabella Pearl project, therefore no reclamation and remediation liability has been recorded.