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Property, Plant and Equipment | 12 Months Ended
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Dec. 31, 2017
Property, Plant and Equipment [Abstract] |
Property, Plant and Equipment | 5. PROPERTY, PLANT AND EQUIPMENT
|  | Net Property, Plant and Equipment at December 31, 2017 |
(thousands of dollars) |  | Turkey |  |  | Texas |  |  | New Mexico |  |  | Corporate |  |  | Net book value |
Uranium plant |  | $ | - |  |  | $ | 8,304 |  |  | $ | - |  |  | $ | - |  |  | $ | 8,304 |
Mineral rights and properties-Uranium |  |  | 17,968 |  |  |  | - |  |  |  | 7,806 |  |  |  | - |  |  |  | 25,774 |
Other property, plant and equipment |  |  | 11 |  |  |  | 1,109 |  |  |  | - |  |  |  | 211 |  |  |  | 1,331 |
Total net book value |  | $ | 17,979 |  |  | $ | 9,413 |  |  | $ | 7,806 |  |  | $ | 211 |  |  | $ | 35,409 |
|  | Net Property, Plant and Equipment at December 31, 2016 |
(thousands of dollars) |  | Turkey |  |  | Texas |  |  | New Mexico |  |  | Corporate |  |  | Net book value |
Uranium plant |  | $ | - |  |  | $ | 8,459 |  |  | $ | - |  |  | $ | - |  |  | $ | 8,459 |
Mineral rights and properties-Uranium |  |  | 17,968 |  |  |  | - |  |  |  | 19,102 |  |  |  | - |  |  |  | 37,070 |
Other property, plant and equipment |  |  | 22 |  |  |  | 1,224 |  |  |  | - |  |  |  | 141 |  |  |  | 1,387 |
Total net book value |  | $ | 17,990 |  |  | $ | 9,683 |  |  | $ | 19,102 |  |  | $ | 141 |  |  | $ | 46,916 |
Lithium Properties Railroad Valley project As discussed in Note 4 above, the Company staked approximately 9,270 acres of federal placer mining claims in June 2017 within the Railroad Valley of Central Nevada. We hold these claims through the payment of annual claim maintenance fees to the U.S. Bureau of Land Management. There are no royalty obligations associated with this project. Columbus Basin project As discussed in Note 4 above, the Company staked approximately 14,200 acres of unpatented placer mining claims in July and September 2016 in the Columbus Salt Marsh area of west-central Nevada. We hold these claims through the payment of annual claim maintenance fees to the U.S. Bureau of Land Management. There are no royalty obligations associated with this project. Sal Rica project As discussed in Note 4 above, the Company acquired approximately 9,900 acres of unpatented placer mining claims from Mesa. Additionally, subsequent to the purchase of these mining claims from Mesa, the Company staked an additional 3,360 acres of unpatented placer mining claims. We hold these claims through the payment of annual claim maintenance fees to the U.S. Bureau of Land Management. Additionally, the claims purchased from Mesa are subject to a 2% NSR royalty on future production. The remaining claims staked by the Company are not subject to any royalties or work commitments. Uranium Properties Temrezli project As discussed in Note 4 above, the Temrezli project was acquired as part of the Anatolia Transaction. The Company controls five licenses that make up the Temrezli project area that were granted to our Turkey-based subsidiary Adur Madencilik Ltd Sti. by the Turkish General Directorate of Mining Affairs. The granted licenses cover an area of about 13,490 acres. We hold these licenses through the payment of fees to the Turkish government and the fulfillment of certain physical work obligations on an annual basis. Uranium production from the licenses is subject to the payment of a sliding scale royalty, ranging from 2% to 16% depending upon the sales price of uranium, as defined by Turkish mining law. The sliding scale royalty payments are to be made to certain agencies of the local and Turkish governments. A further 1% royalty is payable to the General Directorate of Mining Affairs, who discovered the Temrezli uranium deposit. Kingsville Dome project The Kingsville Dome project consists of mineral leases from private landowners on about 2,434 gross and 2,227 net acres located in central Kleberg County, Texas. The leases are held through the payment of annual rents, and the lease provide for the payment of production royalties ranging from 6.25% to 9.375%, based upon uranium sales from the respective leases. The leases have expiration dates ranging from 2000 to 2007 however we continue to hold most of these leases through our ongoing restoration activities. With a few minor exceptions, the leases contain clauses that permit us to extend the leases not held by production by payment of an annual per acre royalty ranging from $10 to $30. We have paid such royalties on all material acreage. Rosita project The Rosita project consists of mineral leases from private landowners on about 2,759 gross and net acres located in north-central Duval County, Texas. The Rosita South property consists of mineral leases from private land owners on about 1,795 gross acres and 1,479 net acres located in Duval County near the Company’s Rosita project. The leases provide for the payment to the landowners of sliding scale royalties based on a percentage of uranium sales. Royalty percentages on average increase from 6.25% up to 18.25% when uranium prices reach $80.00 per pound. Under the terms of the leases, the lands can be held after the expiration of the primary and secondary terms, as long as are carrying out restoration and reclamation activities. The leases have primary and secondary terms ranging from 2012 to 2016, and provisions to extend the leases beyond the initial terms. We are holding these leases by payment of rentals ranging from $10 to $30 per acre. Vasquez project The Vasquez project is comprised of a mineral lease on 872 gross and net acres located in southwestern Duval County, in South Texas. The primary term expired in February 2008; however we hold the lease by carrying out restoration and reclamation activities. We pay an annual rental fee to the landowner and the lease provides for the payment to the landowner royalties based upon 6.25% of uranium sales below $25.00 per pound and royalty rate increases on a sliding scale up to 10.25% for uranium sales occurring at or above $40.00 per pound. Butler Ranch project The Butler Ranch project was acquired as part of the Company’s Asset Exchange Agreement with Rio Grande Resources Corporation in November 2014. The property is comprised of fee leases that cover an area of about 990 acres of mineral rights. We can hold the leases by payment of annual rental fees, ranging from $10 to $25 per acre. Each of the leases makes provision for the payment of royalties of 10% of sales to the property owners. Leases have initial terms of 8 to 10 years and have provisions to “hold by drilling” and identifying uranium mineralization on the specific properties. During 2017, all of the Butler Ranch mineral leases were up for renewal. Several land owners opted not to renew, resulting in a drop of acreage from approximately 1,542 to the current 990. Cebolleta project In connection with the merger of Neutron (and its wholly-owned subsidiary Cibola Resources LLC (“Cibola”)) we acquired the Cebolleta Lease with La Merced del Pueblo de Cebolleta (the “Cebolleta Land Grant”), a privately held land grant, to lease the Cebolleta project, which is composed of approximately 6,717 acres of fee (deeded) surface and mineral rights. The Cebolleta Lease was affirmed by the New Mexico District Court in Cibola County in April 2007. The Cebolleta Lease provides for: (i) a term of ten years and so long thereafter as Cibola is conducting operations on the Cebolleta property; (ii) initial payments to the Cebolleta Land Grant of $5,000,000; (iii) a recoverable reserve payment equal to $1.00 multiplied by the number of pounds of recoverable uranium reserves upon completion of a feasibility study to be completed within six years, less (a) the $5,000,000 referred to in (ii) above, and (b) not more than $1,500,000 in annual advance royalties previously paid pursuant to (iv); (iv) annual advanced royalty payments of $500,000; (v) gross proceeds royalties ranging from 4.50% to 8.00% based on the then current price of uranium; (vi) employment opportunities and job-skills training for the members of the Cebolleta Land Grant and (vii) funding of annual higher education scholarships for the members of the Cebolleta Land Grant. The Cebolleta Lease provides us with the right to explore for, mine, and process uranium deposits present on the Cebolleta project. In February 2012, we entered into an amendment of the Cebolleta Lease (the “Cebolleta Lease Amendment”) amending the Cebolleta Lease, subject to approval of the Thirteenth Judicial District. Pursuant to the Cebolleta Lease Amendment, the date for the completion of the feasibility study was extended from April 2013 to April 2016. In addition, the date has been further extended subject to a reduction in the $6,500,000 initial payment and annual advance royalty payments deductions to the recoverable reserve payment. The most recent negotiations have resulted in a reduction of the advance royalty payment to $350,000 for three years, after which the payments return to the prior formula. Additionally, and for the duration of the agreement, the requirement for a feasibility report has been removed, the reserve payment has been eliminated in favor of a single payment of $4.0 million upon commencement of production and the gross proceeds royalty has been fixed at 5.75%. Juan Tafoya project In connection with the merger with Neutron we acquired the fee interest in 4,097 acres in northwestern New Mexico of fee (deeded) surface and mineral rights owned by the Juan Tafoya Land Corporation (“JTLC”) and 24 leases with private owners of small tracts covering a combined area of 115 acres. The JTLC lease (the “JT Lease”) has a term of ten years, and it can be extended on a year-to-year basis thereafter, so long as we are conducting operations on the Juan Tafoya project. Additionally, the JT Lease required: (i) an initial payment to JTLC of $1,250,000; (ii) annual rental payments of $225,000 for the first five years of the lease and $337,500 for the second five years; (iii) after the second five years, annual base rent of $75 per acre; (iv) a gross proceeds royalty of 4.65% to 6.5% based on the prevailing price of uranium; (v) employment opportunities and job-skills training programs for shareholders of the JTLC or their heirs, (vi) periodic contributions to a community projects fund if mineral production commences from the Juan Tafoya project and (vii) funding of a scholarship program for the shareholders of the JTLC or their heirs. We are obligated to make the first ten years’ annual rental payments notwithstanding the right to terminate the JT Lease at any time, unless (a) the market value of uranium drops below $25 per pound, (b) a government authority bans uranium mining on the Juan Tafoya project, or (c) the project is deemed uneconomical by an independent engineering firm. The Company intends to negotiate with the JTLC on the terms for the continuation of the JT Lease. Our most recent negotiations, completed in the fall of 2017, allow for a reduction of advance royalty payments to $174,000 per annum for three years, after which they return to the original formula. Additionally, the gross proceeds royalty rate is fixed at 4% for the remainder of the agreement. Impairment of Property, Plant and Equipment The Company recorded the following impairment charges for 2017 and 2016 related to its uranium projects and processing facilities:
|  | For the years ended December 31, |
|  | 2017 |  |  | 2016 |
|  | (thousands of dollars) |
Kingsville Dome project |  | $ | 140 |  |  | $ | 160 |
Butler Ranch project |  |  | - |  |  |  | 579 |
Sejita Dome project |  |  | - |  |  |  | 534 |
Nell project |  |  | - |  |  |  | 209 |
Jack Pump project |  |  | - |  |  |  | 191 |
Cebolleta/Juan Tafoya project |  |  | 11,296 |  |  |  | - |
Total Impairment |  | $ | 11,436 |  |  | $ | 1,673 |
The significant assumptions used in determining the future cash flows for our uranium properties and uranium plant assets at December 31, 2017 included an average long-term U3O8 price of $41.34 per pound and average operating costs and capital expenditure costs based on third-party and internal cost estimates. Estimates and assumptions used to assess recoverability of our long-lived assets and measure fair value of our uranium properties are subject to risk uncertainty. Changes in these estimates and assumptions could result in the impairment of our long-lived assets. Events that could result in the impairment of our long-lived assets include, but are not limited to, decreases in the future U3O8 prices, decreases in the estimated recoverable minerals and any event that might otherwise have a material adverse effect on our costs. Existing proven and probable reserves and value beyond proven and probable reserves, including mineralization that is not part of the measured, indicated or inferred resource base, are included when determining the fair value of uranium properties upon acquisition and, subsequently, in determining whether the assets are impaired. The term “recoverable minerals” refers to the estimated amount of uranium that will be obtained after taking into account losses during processing and treatment. In estimating future cash flows, assets are grouped at the lowest level for which there is identifiable cash flows that are largely independent of future cash flows from other asset groups. The Company’s recorded impairment charge for 2017 of $11.3 million on its Cebolleta/Juan Tafoya project was the result of declining uranium prices as the carrying value exceeded the projects cash flows on an undiscounted and discounted basis. The net carrying value of the Cebolleta/Juan Tafoya project after impairment is $7.8 million at December 31, 2017. The Company’s recorded impairment charge for 2017 and 2016 of $0.1 million and $0.2 million, respectively, on its Kingsville Dome project was due to the physical deterioration of its processing plant equipment resulting from the plant’s idled status and its proximity to the Texas coastline. The Company’s recorded impairment charge for 2016 of $0.6 million on its Butler Ranch project was the result of declining uranium prices. During 2016, the carrying value exceeded the projects cash flows on an undiscounted and discounted basis. As a result, the entire carrying value of the Butler Ranch project was written to nil as it was determined that the entire investment was unrecoverable. The Company’s recorded impairment charges for 2016 of $0.5 million on its Sejita Dome project, $0.2 million on its Nell project and $0.2 million on its Jack Pump project were the result of WWR’s Board of Directors and management determining that exploration results indicated that these projects should be terminated. Mineral Property Expenses During the years ending December 31, 2017 and 2016, the Company’s mineral property expenses were $4.6 million and $3.2 million, respectively. Included within mineral property costs are standby costs for our three idled South Texas ISR projects along with holding, exploration and evaluation costs for all properties. The Company spent the following amounts for each of its material properties:
|  | For the year ended December 31, |
|  | 2017 |  |  | 2016 |
|  | (thousands of dollars) |
Temrezli project, Turkey |  | $ | 261 |  |  | $ | 498 |
Total Turkey projects |  |  | 261 |  |  |  | 498 |
Kingsville Dome project, Texas |  |  | 810 |  |  |  | 779 |
Rosita project, Texas |  |  | 590 |  |  |  | 402 |
Vasquez project, Texas |  |  | 572 |  |  |  | 461 |
Butler Ranch project, Texas |  |  | 21 |  |  |  | 12 |
Other projects, Texas |  |  | 50 |  |  |  | 94 |
Total Texas projects |  |  | 2,043 |  |  |  | 1,748 |
Crownpoint project, New Mexico |  |  | - |  |  |  | 5 |
Churchrock project, New Mexico |  |  | - |  |  |  | 20 |
Cebolleta project, New Mexico |  |  | 538 |  |  |  | 138 |
Juan Tafoya project, New Mexico |  |  | 528 |  |  |  | 47 |
Other projects, New Mexico |  |  | 14 |  |  |  | 5 |
Total New Mexico projects |  |  | 1,080 |  |  |  | 215 |
Columbus Basin project, Nevada |  |  | 866 |  |  |  | 232 |
Railroad Valley, Nevada |  |  | 238 |  |  |  | - |
Other projects, Nevada |  |  | 3 |  |  |  | 31 |
Total Nevada projects |  |  | 1,107 |  |  |  | 263 |
Sal Rica project, Utah |  |  | 93 |  |  |  | 524 |
Total Utah projects |  |  | 93 |  |  |  | 524 |
Total expense for the period |  | $ | 4,584 |  |  | $ | 3,248 |

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- Definition The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 + Details
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