Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 27, 2018 | Jun. 30, 2017 | |
Document and Entity Information | |||
Entity Registrant Name | Golden Minerals Co | ||
Entity Central Index Key | 1,011,509 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 26,478,366 | ||
Entity Common Stock, Shares Outstanding | 91,929,709 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 3,250 | $ 2,588 |
Short-term investments | 238 | 334 |
Lease receivables | 314 | 380 |
Inventories, net | 242 | 245 |
Value added tax receivable, net | 148 | 5 |
Related party receivable | 643 | |
Prepaid expenses and other assets | 745 | 578 |
Total current assets | 4,937 | 4,773 |
Property, plant and equipment, net | 8,140 | 9,235 |
Total assets | 13,077 | 14,008 |
Current liabilities | ||
Accounts payable and other accrued liabilities | 1,556 | 1,224 |
Deferred revenue, current | 293 | |
Other current liabilities | 9 | 24 |
Total current liabilities | 1,858 | 1,248 |
Asset retirement and reclamation liabilities | 2,495 | 2,434 |
Deferred Revenue, non-current | 600 | |
Warrant liability - related party | 976 | |
Warrant liability | 922 | |
Other long term liabilities | 43 | 66 |
Total liabilities | 4,996 | 5,646 |
Commitments and contingencies | ||
Equity | ||
Common stock, $.01 par value, 200,000,000 shares authorized; 91,929,709 and 89,020,041 shares issued and outstanding, respectively | 919 | 889 |
Additional paid in capital | 516,284 | 495,455 |
Accumulated deficit | (509,082) | (488,037) |
Accumulated other comprehensive (loss) income | (40) | 55 |
Shareholders' equity | 8,081 | 8,362 |
Total liabilities and equity | $ 13,077 | $ 14,008 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 91,929,709 | 89,020,041 |
Common stock, shares outstanding | 91,929,709 | 89,020,041 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Revenue: | |||
Oxide plant lease | $ 6,691 | $ 6,400 | |
Total revenue | 6,691 | 6,400 | |
Costs and expenses: | |||
Oxide plant lease costs | (2,189) | (2,046) | |
Exploration expense | (3,091) | (3,718) | |
El Quevar project expense | (822) | (508) | |
Velardena shutdown and care and maintenance costs | (1,589) | (2,016) | |
Administrative expense | (3,512) | (3,890) | |
Stock based compensation | (296) | (593) | |
Reclamation expense | (196) | (192) | |
Other operating income, net | 2,093 | 1,790 | |
Depreciation and amortization | (952) | (1,548) | |
Total costs and expenses | (10,554) | (12,721) | |
Loss from operations | (3,863) | (6,321) | |
Other income and (expense): | |||
Interest expense | (515) | ||
Interest and other income | 37 | 390 | |
Warrant derivative loss | (1,688) | ||
Derivative loss | (778) | ||
Loss on debt extinguishment | (1,653) | ||
Loss on foreign currency | (53) | (94) | |
Total other income (expense) | (16) | (4,338) | |
Loss from operations before income taxes | (3,879) | (10,659) | |
Income tax expense | (13) | ||
Net loss | (3,892) | (10,659) | |
Comprehensive loss, net of tax: | |||
Unrealized (loss) gain on securities | (95) | 182 | |
Comprehensive loss | $ (3,987) | $ (10,477) | |
Net loss per common share — basic | |||
Loss (in dollars per share) | $ (0.04) | $ (0.13) | |
Weighted average common stock outstanding - basic (in shares) | [1] | 90,468,606 | 81,651,896 |
[1] | Potentially dilutive shares have not been included because to do so would be anti-dilutive |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive income (loss) | Total |
Balance at Dec. 31, 2015 | $ 534 | $ 484,742 | $ (477,378) | $ (127) | $ 7,771 |
Balance (in shares) at Dec. 31, 2015 | 53,335,333 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Stock compensation accrued and shares issued for vested stock awards | $ 2 | 250 | 252 | ||
Stock compensation accrued and shares issued for vested stock awards (in shares) | 317,968 | ||||
Shares issued on conversion of Sentient Note | $ 273 | 6,944 | 7,217 | ||
Shares issued on conversion of Sentient Note (in shares) | 27,366,740 | ||||
Registered offering common stock, net and warrants | $ 80 | 3,519 | 3,599 | ||
Registered offering common stock, net and warrants (in shares) | 8,000,000 | ||||
Unrealized gain on marketable equity securities, net of tax | 182 | 182 | |||
Net loss | (10,659) | (10,659) | |||
Balance (ASU 2017-11 Earnings Per Share) at Dec. 31, 2016 | $ 889 | 514,501 | (505,185) | 55 | 10,260 |
Balance at Dec. 31, 2016 | $ 889 | 495,455 | (488,037) | 55 | 8,362 |
Balance (in shares) (ASU 2017-11 Earnings Per Share) at Dec. 31, 2016 | 89,020,041 | ||||
Balance (in shares) at Dec. 31, 2016 | 89,020,041 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Cumulative adjustment related to change in accounting principle | Cumulative Effect Adjustment | ASU 2017-11 Earnings Per Share | 19,046 | (17,148) | 1,898 | ||
Stock compensation accrued and shares issued for vested stock awards | $ 1 | 196 | 197 | ||
Stock compensation accrued and shares issued for vested stock awards (in shares) | 200,000 | ||||
Unrealized gain on marketable equity securities, net of tax | (95) | (95) | |||
Shares issued under the at-the-market offering agreement, net | $ 10 | 671 | 681 | ||
Shares issued under the at-the-market offering agreement, net (in shares) | 1,024,392 | ||||
Consideration shares sold to Hecla, net | $ 18 | 912 | 930 | ||
Consideration shares sold to Hecla, net (in shares) | 1,811,015 | ||||
Cancellation of treasury shares | $ 1 | (1) | |||
Cancellation of treasury shares (in shares) | (125,739) | ||||
Deemed dividend on warrants | 5 | (5) | |||
Net loss | (3,892) | (3,892) | |||
Balance at Dec. 31, 2017 | $ 919 | $ 516,284 | $ (509,082) | $ (40) | $ 8,081 |
Balance (in shares) at Dec. 31, 2017 | 91,929,709 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | ||
Net cash used in operating activities | $ (1,630) | $ (6,205) |
Cash flows from investing activities: | ||
Proceeds from sale of assets | 762 | 1,167 |
Acquisitions of property, plant and equipment | (81) | (50) |
Net cash from investing activities | 681 | 1,117 |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock, net of issuance costs | 1,611 | 3,599 |
Net cash from financing activities | 1,611 | 3,599 |
Net increase (decrease) in cash and cash equivalents | 662 | (1,489) |
Cash and cash equivalents, beginning of period | 2,588 | 4,077 |
Cash and cash equivalents, end of period | $ 3,250 | $ 2,588 |
Nature of Operations
Nature of Operations | 12 Months Ended |
Dec. 31, 2017 | |
Nature of Operations | |
Nature of Operations | 1. Nature of Operations The Company is a mining company, holding a 100% interest in the Velardeña and Chicago precious metals mining properties and associated oxide and sulfide processing plants in Mexico (the “Velardeña Properties”). During November 2015 the Company suspended mining and sulfide processing activities at its Velardeña Properties in order to conserve the asset until the Company is able to develop mining and processing plans that at then current prices for silver and gold indicate a sustainable positive operating margin (defined as revenues less costs of sales) or the Company is able to locate, acquire and develop alternative mineral sources that could be economically mined and transported to the Velardeña Properties for processing. The Company expects to incur approximately $0.4 million in quarterly care and maintenance costs at the Velardeña Properties while mining and processing remain suspended. The Company has retained a core group of employees at the Velardeña Properties, most of whom have been assigned to operate and provide administrative support for the oxide plant, which is leased to a subsidiary of Hecla Mining Company (“Hecla”) and not affected by the shutdown. The oxide plant began processing material for Hecla in mid-December 2015, and the Company received net cash flow under the lease of approximately $4.5 million and $4.4 million in 2017 and 2016 respectively. During March 2017, Hecla exercised its right to extend the lease through December 31, 2018. On August 2, 2017, the Company granted Hecla an option to extend the lease for an additional period of up to two years ending no later than December 31, 2020 in exchange for a $1.0 million cash payment and the purchase of $1.0 million, or approximately 1.8 million shares of the Company’s common stock, issued at a price of $0.55 per share, which was the undiscounted 30-day volume weighted average stock price at the time of sale (see Note 15). The retained employees also include an exploration group and an operations and administrative group to continue to advance the Company’s plans in Mexico, oversee corporate compliance activities, and to maintain and safeguard the longer term value of the Velardeña Properties assets. The Company remains focused on evaluating and searching for mining opportunities in North America (including Mexico) with near term prospects of mining, and particularly for properties within reasonable haulage distances of our processing plants at the Velardeña Properties. The Company is also reviewing strategic opportunities, focusing primarily on development or operating properties in North America, including Mexico. The Company is continuing its exploration efforts on selected properties in its portfolio of approximately 10 exploration properties located primarily in Mexico. The Company is also conducting evaluation activities at its El Quevar advanced exploration property in Argentina and remains open to finding a partner to contribute to the funding of further exploration. The Company is considered an exploration stage company under the criteria set forth by the SEC as the Company has not yet demonstrated the existence of proven or probable mineral reserves, as defined by SEC Industry Guide 7, at the Velardeña Properties, or any of the Company’s other properties. As a result, and in accordance with GAAP for exploration stage companies, all expenditures for exploration and evaluation of the Company’s properties are expensed as incurred. As such the Company’s financial statements may not be comparable to the financial statements of mining companies that do have proven and probable mineral reserves. Such companies would typically capitalize certain development costs including infrastructure development and mining activities to access the ore. The capitalized costs would be amortized on a units-of-production basis as reserves are mined. The amortized costs are typically allocated to inventory and eventually to cost of sales as the inventories are sold. As the Company does not have proven and probable reserves, substantially all expenditures at the Company’s Velardeña Properties for mine construction activity, as well as costs associated with the mill facilities, and for items that do not have a readily identifiable market value apart from the mineralized material, have been expensed as incurred. Such costs are charged to cost of metals sold or project expense during the period depending on the nature of the costs. Certain of the costs may be reflected in inventories prior to the sale of the product. The term “mineralized material” as used herein, although permissible under SEC Industry Guide 7, does not indicate “reserves” by SEC standards. The Company cannot be certain that any deposits at the Velardeña Properties or any other exploration property will ever be confirmed or converted into SEC Industry Guide 7 compliant “reserves”. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies The Company’s consolidated financial statements have been prepared in accordance with U.S. GAAP. The preparation of the Company’s consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and related disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The more significant areas requiring the use of management estimates and assumptions relate to mineralized material and related future metals prices that are the basis for future cash flow estimates utilized in impairment calculations and units-of-production depreciation, depletion and amortization calculations; environmental reclamation and closure obligations; estimates of recoverable metals in stockpiles; valuation allowances for deferred tax assets and the fair value of financial instruments. The Company based its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ significantly from these estimates under different assumptions or conditions. The policies adopted, considered by management to be significant, are summarized as follows: a. All of the Company’s consolidated subsidiaries are 100% owned and as such the Company does not have a noncontrolling interest in any of its subsidiaries. All intercompany transactions and balances have been eliminated at consolidation. b. Substantially all expenditures and sales are made in U.S. dollars. Accordingly, the Company and its subsidiaries use the U.S. dollar as their functional and reporting currency. c. The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. d. Materials and supplies inventories are valued at the lower of average cost or net realizable value. Cost includes applicable taxes and freight. The Company routinely counts and evaluates its material and supplies to determine the existence of any obsolete stock that is subject to impairment. e. The Company expenses general prospecting costs and the costs of acquiring and exploring unevaluated mineral properties. When a mineral property is determined to have proven and probable reserves, subsequent development costs are capitalized to mineral properties. For acquired mineral properties with proven and probable reserves, the Company capitalizes acquisition costs and subsequent development costs. When mineral properties are developed and operations commence, capitalized costs are charged to operations using the units-of-production method over proven and probable reserves. Upon abandonment or sale of a mineral property, all capitalized costs relating to the specific property are written off in the period abandoned or sold and a gain or loss is recognized in the accompanying Consolidated Statements of Operations and Comprehensive Loss. As discussed in Note 1, the Company is considered an exploration stage company under the criteria set forth by the SEC since it has not yet demonstrated the existence of proven or probable reserves at the Velardeña Properties, or any of the Company’s other properties. As such, the Company expenses costs as incurred related to any extraction of mineralized material at its Velardeña Properties. The Company established a cost basis for the mineralized material at the Velardeña Properties as a result of purchase accounting for the Company’s business combination transaction with ECU Silver Mining Inc. (“ECU”) in September 2011, the transaction pursuant to which the Company acquired the Velardeña Properties. Mineral properties acquired in the ECU merger were recorded at estimated fair market value based on valuations performed with the assistance of an independent appraisal firm and a minerals engineering company. Although the Company has not demonstrated the existence of proven and probable reserves, and the Company has not completed a pre-feasibility economic assessment, the Company had established the existence of mineralized material that was used in assigning value to mineral properties for purchase accounting purposes. The subsequent extraction of this mineralized material has provided a reasonable basis for the calculation of units-of-production depreciation for the cost basis in the mineral properties. On a quarterly basis the Company evaluates its exploration properties to determine if they meet the Company’s minimum requirements for continued evaluation. The rights to the properties that do not meet the minimum requirements are relinquished and the carrying values, if any, are written off and reflected in “Other operating income, net” on the accompanying Consolidated Statements of Operations and Comprehensive Loss. f. Buildings are depreciated using the straight–line method over the estimated useful lives of 30 to 40 years or the life of the mine whichever is shorter. Mining equipment and machinery, excluding the plant, are depreciated using the straight-line method over useful lives of three to eight years or the lease period, whichever is shorter. Mineral properties and the plant are depreciated using units of production based on estimated mineralized material. Other furniture and equipment are depreciated using the straight-line method over estimated useful lives of three to five years. As discussed above, the Company does not have any properties with proven or probable reserves including the Velardeña Properties. Property, plant and equipment are recorded at cost and per the guidance of ASC 360 the Company assesses the recoverability of its property, plant and equipment, including goodwill, whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. If the sum of estimated future net cash flows on an undiscounted basis is less than the carrying amount of the related asset, impairment is considered to exist. The related impairment loss is measured by comparing estimated future net cash flows on a discounted basis or by comparing other market indicators to the carrying amount of the asset. The Company evaluated its remaining long lived assets at December 31, 2016 and 2017, and determined that no impairment was required. g. The Company records asset retirement obligations (“ARO”) in accordance with ASC 410, “Asset Retirement and Environmental Obligations” (“ASC 410”), which establishes a uniform methodology for accounting for estimated reclamation and abandonment costs. According to ASC 410, the fair value of an ARO is recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. An offsetting asset retirement cost (“ARC”) is capitalized as part of the carrying value of the assets with which it is associated, and depreciated over the useful life of the asset (see Note 11). The Company prepares estimates of the timing and amount of expected cash flows when an ARO is incurred. The fair value of the ARO is measured by discounting the expected cash flows using a discount rate that reflects the credit adjusted risk-free rate of interest. The Company records the fair value of an ARO when it is incurred and layer adjustments of the ARO are recorded as an adjustment to the corresponding ARC. The ARO is adjusted to reflect the passage of time (accretion cost) calculated by applying the discount rate implicit in the initial fair value measurement to the beginning-of-period carrying amount of the ARO. The Company records accretion costs to expense as incurred. h. The Company recognizes oxide plant lease fees and reimbursements for labor, utility and other costs as "Revenue from Oxide plant lease" in the Consolidated Statements of Operations and Comprehensive Loss following the guidance of ASC 605 regarding "income statement characterization of reimbursements received for "out-of-pocket" expenses incurred" and "reporting revenue gross as a principal versus net as an agent". ASC 605 supports recording as gross revenue fees received for the reimbursement of expenses in situations where the recipient is the primary obligor and has certain discretion in the incurrence of the reimbursable expense. The actual costs incurred for the reimbursed labor, utility and other costs are reported as "Oxide plant lease costs" in the Consolidated Statement of Operations and Comprehensive Loss. The Company recognizes lease fees during the period as fees are earned per the terms of the lease (see Note 16). i Stock based compensation costs are recognized per the guidance of ASC 718, “Compensation — Stock Compensation” (“ASC 718”), using a graded vesting attribution method whereby costs are recognized over the requisite service period for each separately vesting portion of the award (see Note 15). Stock grants are valued at their grant date at fair value which in the case of options requires the use of the Black-Scholes option pricing model. Per ASC 718 the grants may be classified as equity grants or liability grants depending on the terms of the grant. j. Basic income (loss) per share is computed by dividing net income (loss) available to holders of the Company’s Common Stock by the weighted average number of shares of Common Stock outstanding for the period. Diluted income (loss) per share reflects the potential dilution that would occur if securities or other contracts to issue Common Stock were exercised or converted into Common Stock. At December 31, 2017 and 2016, all potentially dilutive shares were excluded from the computation of diluted earnings per share because to include them would have been anti-dilutive. k. Comprehensive income (loss) is defined as all changes in equity (deficit), exclusive of transactions with stockholders, such as capital investments. Comprehensive income (loss) includes net income (loss) and changes in certain assets and liabilities that are reported directly in equity. For the years ended December 31, 2017 and 2016 Comprehensive loss included the change in the market value of available for sale securities and is reported on the Consolidated Statements of Operations and Comprehensive Income (Loss). l. The Company accounts for income taxes in accordance with the provisions of ASC 740, “Income Taxes” (“ASC 740”), on a tax jurisdictional basis. The Company files United States and certain other foreign country income tax returns, and pays taxes reasonably determined to be due. The tax rules and regulations in these countries are highly complex and subject to interpretation. The Company’s income tax returns are subject to examination by the relevant taxing authorities and in connection with such examinations, disputes can arise with the taxing authorities over the interpretation or application of certain tax rules within the country involved. In accordance with ASC 740, the Company identifies and evaluates uncertain tax positions, and recognizes the impact of uncertain tax positions for which there is a less than more-likely-than-not probability of the position being upheld when reviewed by the relevant taxing authority. Such positions are deemed to be unrecognized tax benefits and a corresponding liability is established on the balance sheet. The Company classifies income tax related interest and penalties as income tax expense. m. In July 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-11, “ Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part 1) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Non public Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception” (“ASU 2017-11”). Part I relates to the accounting for certain financial instruments with down round features in Subtopic 815-40, which is considered in determining whether an equity-linked financial instrument qualifies for a scope exception from derivative accounting. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced based on the pricing of future equity offerings. An entity still is required to determine whether instruments would be classified as equity under the guidance in Subtopic 815-40 in determining whether they qualify for that scope exception. If they do qualify, freestanding instruments with down round features are no longer classified as liabilities. ASU 2017-11 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. Early adoption is permitted, including in an interim period. The Company early adopted ASU 2017-11 during the interim period ended September 30, 2017 (see Note 3). In March 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-09, “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”), which simplifies several aspects of the accounting for share-based payment award transactions including accounting for income taxes and classification of excess tax benefits on the statement of cash flows, forfeitures and minimum statutory tax withholding requirements. For the Company, ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The adoption of ASU 2016-09 in 2017 did not materially change the Company’s previous accounting methods and therefore did not have a material impact on the Company’s consolidated financial position or results of operation. In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes: Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). ASU 2015-17 requires that deferred tax assets and liabilities be classified as noncurrent on the balance sheet. This update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. The adoption of ASU 2015-17 in 2017 did not materially change the Company’s previous accounting methods and therefore did not have a material impact on the Company’s consolidated financial position or results of operation. In July 2015, the FASB issued ASU No. 2015-11, “Inventory, Simplifying the Measurement of Inventory” (“ASU 2015‑11”). ASU 2015-11 affects reporting entities that measure inventory using first-in, first-out or average cost. ASU 2015‑11 requires that inventory be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 is effective for annual periods beginning after December 15, 2016. The adoption of ASU 2015-11 in 2017 did not materially change the Company’s previous accounting methods and therefore did not have a material impact on the Company’s consolidated financial position or results of operation. On August 27, 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014‑15”). ASU 2014-15 will require management to evaluate whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the financial statements are issued on both an interim and annual basis. Management is required to provide certain footnote disclosures if it concludes that substantial doubt exists or when its plans alleviate substantial doubt about the Company’s ability to continue as a going concern. The Company adopted ASU 2014-15 in 2016 and has since included disclosures in its financial statements consistent with the pronouncement. n. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 modifies the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in the more timely recognition of losses. ASU 2016-13 will be effective for the Company as of January 1, 2020. As the Company’s principle credit risk is related to its Lease Receivables the Company does not expect the adoption of this update to result in a material impact on its consolidated financial position or results of operations. In March 2016, the FASB issued ASU 2016-08, “ Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” (“ASU 2016-08”), which clarifies principal versus agent when another party, along with the entity, is involved in providing a good or service to a customer. Topic 606, Revenue from Contracts with Customers, requires an entity to determine whether the nature of its promise is to provide that good or service to the customer (i.e., the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (i.e., the entity is an agent). For the Company, ASU 2016-08 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is not permitted. As the Company’s current accounting practices per the guidance of ASC 605 are comparable to the requirements of ASU 2016-08, the Company does not expect the adoption of this update to result in a material impact on its consolidated financial position or results of operations or the requirement for retrospective reporting. In February 2016, the FASB issued ASU 2016-02, “Leases” (“ASU 2016-02”), which will require lessees to recognize a right-of-use asset and a lease liability for all leases with terms greater than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. For a lessor, the accounting applied is largely unchanged from previous guidance. The new rules will be effective for the Company in the first quarter of 2019. The Company does not anticipate early adoption. The Company currently leases administrative offices in the U.S. and in several foreign locations under lease agreements that typically exceed one year. Depending on the number of years remaining under such lease agreements the right-of-use assets and lease liabilities that the Company would record under ASU 2016-2 could be material. In January 2016, the FASB issued ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”) which amended its standards related to the accounting of certain financial instruments. This amendment addresses certain aspects of recognition, measurement, presentation and disclosure. The new rules will become effective for annual and interim periods beginning after December 15, 2017. Early adoption is not permitted. The Company does not expect the adoption of ASU 2016-01 to materially change its current accounting methods and therefore the Company does not expect the adoption to have a material impact on its consolidated financial position or results of operations. In May 2014, FASB and the International Accounting Standards Board issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. In addition, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing and uncertainty of revenue that is recognized and the related cash flows. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017; early adoption is not permitted. ASU 2014-09 was originally effective December 15, 2016 but ASU 2015-14 deferred the effective date by one year. As the Company’s current accounting practices per the guidance of ASU 2014-09 are comparable to the requirements of ASU 2014-09, the Company does not expect the adoption of this update to result in a material impact on its consolidated financial position or results of operations. |
Change in Accounting Principle
Change in Accounting Principle | 12 Months Ended |
Dec. 31, 2017 | |
Change in Accounting Principle | |
Change in Accounting Principle | 3. Change in Accounting Principle In July 2017, the FASB issued ASU 2017-11. Part I relates to the accounting for certain financial instruments with down round features in Subtopic 815-40, which is considered in determining whether an equity-linked financial instrument qualifies for a scope exception from derivative accounting. In the case where the exception from derivative accounting does not apply, warrants must be accounted for as a liability and recorded at fair value at the date of grant and re-valued at the end of each reporting period. The Company’s September 2012 and 2014 warrants (see Note 15) include anti-dilution provisions characterized as down round features and have previously been accounted for as liabilities, with the fair value of the warrant liabilities remeasured at each reporting date and the change in liabilities recorded as other non-operating income or loss. The Company had recorded a “ Warrant liability ” of $1.9 million and a warrant derivative gain of $17.1 million in its “ Accumulated deficit ” as reported in its Condensed Consolidated Balance Sheets for the year ended December 31, 2016 relating to the September 2012 and 2014 warrants. The Company had recorded a warrant liability of $1.5 million as of June 30, 2017 and reported a warrant derivative gain of $0.4 million for the six months ended June 30, 2017 relating to the September 2012 and 2014 warrants. In addition, for freestanding equity-classified financial instruments, ASU 2017-11 also requires entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Certain equity transactions following the issuance of the September 2012 and 2014 warrants have triggered anti-dilution clauses in the warrant agreements resulting in additional warrant shares and a reduction to the original strike price of the warrants. ASU 2017-11 prescribes a method to measure the value of a deemed dividend related to a triggering event by computing the difference in fair value between two instruments that have terms consistent with the actual instrument but that do not have a down round feature, where the number of warrant shares and strike price of one instrument corresponds to the actual instrument before the triggering event and the number of warrant shares and strike price of the other instrument corresponds to the actual instrument immediately after the triggering event. Following ASU 2017-11, for periods ending on or prior to December 31, 2016 the Company would have reduced its “ Accumulated deficit ” as reported on its Condensed Consolidated Balance Sheets by approximately $0.3 million related to prior triggering events. During the nine month period ending September 30, 2017 the Company would have reduced its accumulated deficit by approximately $5,000 related to triggering events. Except for the down round features in the September 2012 and 2014 warrants, the warrants would have been classified in equity under the guidance in Subtopic 815-40 and therefore qualify for the scope exception in ASU 2017-11 . As permitted, the Company elected to adopt the accounting principles prescribed by ASU 2017-11 for the interim period ended September 30, 2017 and has recorded a cumulative-effect adjustment stemming from a change in accounting principle in its financial statements for the year ended December 31, 2017 measured retrospectively to the beginning of 2017. The cumulative effect adjustment appears at the beginning of 2017 in the Company’s Condensed Consolidated Statement of Changes in Equity. The results of operations for the Company for year ended December 31, 2017 reflects application of the change in accounting principle from the beginning of 2017. The following table details the impact stemming from the cumulative effect of the change in accounting principle on the Company’s Consolidated Balance Sheets as of the beginning of 2017. Reported after As Previously Cumulative the Effect of a Change in Reported Effect Adjustment Accounting Principle Balance Sheet Accounts Impacted by December 31, at the Beginning at the Beginning September 2012 and 2014 Warrants 2016 of 2017 of 2017 (in thousands) Warrant Liability - Related Party $ 976 $ (976) $ — Warrant Liability 922 (922) — Additional Paid-in Capital 495,455 19,046 514,501 Accumulated Deficit (488,037) (17,148) (505,185) As noted above, the Company had previously reported a warrant derivative gain of $0.4 million during the six month period ending June 30, 2017. Because the Company has retroactively applied the change in accounting principle discussed above to the beginning of 2017, the Company is no longer reporting warrant derivative gains or losses for the September 2012 and 2014 warrants beginning in 2017. Amounts reported for periods ending on or prior to December 31, 2016 have not been adjusted. |
Cash and Cash Equivalents and S
Cash and Cash Equivalents and Short-Term Investments | 12 Months Ended |
Dec. 31, 2017 | |
Cash and Cash Equivalents and Short-Term Investments | |
Cash and Cash Equivalents and Short-Term Investments | 4. The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Short-term investments include investments with maturities greater than three months, but not exceeding 12 months, or highly liquid investments with maturities greater than 12 months that the Company intends to liquidate during the next 12 months for working capital needs. The following tables summarize the Company's short-term investments at December 31, 2017 and 2016: Estimated Carrying December 31, 2017 Cost Fair Value Value (in thousands) Investments: Short-term: Available for sale common stock $ 275 $ 238 $ 238 Total available for sale 275 238 238 Total short term $ 275 $ 238 $ 238 December 31, 2016 Investments: Short-term: Available for sale common stock $ 275 $ 334 $ 334 Total available for sale 275 334 334 Total short term $ 275 $ 334 $ 334 Credit Risk The Company invests substantially all of its excess cash with high credit-quality financial institutions or in U.S. government or debt securities. Credit risk is the risk that a third party might fail to fulfill its performance obligations under the terms of a financial instrument. For cash and equivalents and investments, credit risk represents the carrying amount on the balance sheet. The Company mitigates credit risk for cash and equivalents and investments by placing its funds and investments with high credit-quality financial institutions, limiting the amount of exposure to each of the financial institutions, monitoring the financial condition of the financial institutions and investing only in government and corporate securities rated “investment grade” or better. The Company invests with financial institutions that maintain a net worth of not less than $1 billion and are members in good standing of the Securities Investor Protection Corporation. |
Prepaid Expenses and Other Asse
Prepaid Expenses and Other Assets | 12 Months Ended |
Dec. 31, 2017 | |
Prepaid Expenses and Other Assets | |
Prepaid Expenses and Other Assets | 5. Prepaid expenses and other assets consist of the following: December 31, December 31, 2017 2016 (in thousands) Prepaid insurance $ 362 $ 296 Deferred offering costs 137 153 Recoupable deposits and other 246 129 $ 745 $ 578 The deferred offering costs are related to the ATM Program discussed in detail in Note 15. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2017 | |
Inventories | |
Inventories | 6. Inventories at the Velardeña Properties were as follows: December 31, December 31, 2017 2016 (in thousands) Material and supplies $ 242 $ $ 242 $ 245 The material and supplies inventory at December 31, 2017 and 2016 are related to the Velardeña Properties and are reduced by a $0.2 million obsolescence reserve. |
Value added tax receivable
Value added tax receivable | 12 Months Ended |
Dec. 31, 2017 | |
Value added tax receivable. | |
Value added tax receivable | 7. The Company has recorded value added tax (“VAT”) paid in Mexico and related to the Velardeña Properties as a recoverable asset. Mexico law allows for VAT payments to be recovered from VAT collected from the sale of products or rendering of services. At December 31, 2017, the Company has also recorded approximately $19,000 of VAT receivable as a reduction to VAT payable in Mexico, which appears in “ Accounts payable and other accrued liabilities” on the Condensed Consolidated Balance Sheets. During 2017 the Company received refunds of approximately $1.1 million from the government of Argentina for VAT payments made in that country during 2012 and 2013. Because of uncertainties relating to collectability of the taxes the Company had recorded a full valuation allowance against the VAT receivable at the time the taxes were paid. The Company reported the $1.1 million of VAT refunds received during the year ended December 31, 2017 in “Other operating income” on the Condensed Consolidated Statements of Operations and Comprehensive Loss. In February 2018, we received an additional approximately $138,000 of VAT refunds. At December 31, 2017, the Company reversed $138,000 of the valuation allowance and recorded a VAT receivable of $138,000 with a corresponding gain in “Other operating income” on the Condensed Consolidated Statements of Operations and Comprehensive Loss. The Company has remaining Argentina VAT refund claims totaling approximately $0.1 million. The Company cannot predict if or when it will receive these additional VAT refunds and accordingly has recorded a full valuation allowance against the remaining VAT refund claims. The Company has also paid VAT in Mexico as well as other countries, primarily related to exploration projects, which has been charged to expense as incurred because of the uncertainty of recoverability. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment | |
Property, Plant and Equipment | 8. Property, plant and equipment, net The components of property, plant, and equipment, net were as follows: December 31, December 31, 2017 2016 (in thousands) Mineral properties $ 9,352 $ 9,352 Exploration properties 2,518 2,518 Royalty properties 200 200 Buildings 4,246 4,386 Mining equipment and machinery 15,989 16,351 Other furniture and equipment 958 952 Asset retirement cost 865 992 34,128 34,751 Less: Accumulated depreciation and amortization (25,988) (25,516) $ 8,140 $ 9,235 In August 2016, the Company sold certain mining equipment consisting of two haul trucks, two scoop trams and a compressor to Minera Indé, an indirect subsidiary of The Sentient Group, for $687,000 (see Note 23). The equipment sold was excess equipment held at the Company’s Velardeña Properties that the Company did not expect to use. The equipment had a net book value of $27,000 resulting in a gain of $660,000 in 2016. The gain is included in “ Other operating income, net” in the accompanying Consolidated Statements of Operations and Comprehensive Loss. The Company received $69,000 or 10% of the sales price at the closing of the sale, with the remaining $618,000 plus interest on the unpaid balance at an annual rate of 10% due in February 2017. With the approval of a Special Committee of the Company’s Board of Directors, the Company and Minera Indé amended the original equipment sale on March 31, 2017 to include the sale of an additional piece of excess equipment for $185,000 and extend the time for payment relating to the original equipment sale. Upon execution of the amendment the Company received an additional payment of $100,000. The remaining principal and interest balance, plus additional interest on the unpaid balance at an annual rate of 10%, was amended to be due in August 2017. The Company recorded a gain of $105,000 in 2017 on the sale of the additional equipment, included in “ Other operating income, net ” in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss, equal to the gross proceeds less the remaining basis in the equipment. On May 2, 2017, the Company received approximately $750,000 from Minera Indé as payment in full for the remaining balance due related to the equipment sale, including interest through that date. On August 2, 2016, the Company entered into a definitive agreement to sell its remaining 50% interest in the San Diego exploration property in Mexico to Golden Tag Resources ltd (“Golden Tag”), the company that held the other 50% interest in the property. As a result of the sale, the Company received approximately $379,000 in cash and 2,500,000 common shares of Golden Tag. Pursuant to the agreement, Golden Tag will be required to pay the Company a 2.0% net smelter return royalty in respect to the San Diego property. The Company had previously written down the value of the San Diego property to approximately zero and accordingly recognized a gain of approximately $0.5 million in 2016 on the sale. The gain is included in “ Other operating income, net ” in the accompanying Consolidated Statements of Operations and Comprehensive Loss. Following this transaction, the Company now holds 7,500,000 common shares representing approximately 10% of the outstanding common shares of Golden Tag (see Note 4). In August 2016, the Company, through its wholly owned Mexican subsidiary, entered into an earn-in agreement with a 100% owned Mexican subsidiary of Electrum Global Holdings, L.P., a privately owned company (together “Electrum”), related to the Company’s Celaya exploration property in Mexico. The Company received an upfront payment of $0.2 million and Electrum agreed to incur exploration expenditures totaling at least $0.5 million in the first year of the agreement, reduced by certain costs Electrum previously incurred on the property since December 2015 in its ongoing surface exploration program. Electrum, at its option, can elect to acquire an undivided 60% interest in a joint venture company to be formed to hold the Celaya project after incurring exploration expenditures totaling $2.5 million during the initial first three years of the agreement. Electrum would serve as manager of the joint venture. Prior to an amendment to the agreement, the Company would have been allowed to maintain a 40% interest in the Celaya project, following the initial three-year earn-in period, by contributing its pro-rata share of an additional $2.5 million in exploration or development expenditures incurred over a second three-year period. In February 2018, the Company and Electrum amended the Celaya earn-in agreement to permit Electrum to earn, at its option, an additional 20% interest in the Celaya project in exchange for a payment of $1.0 million. Electrum can now increase its total interest in the project to 80% by contributing 100% of the $2.5 million of additional expenditures required in the second three-year earn-in period. Following the second earn-in period the Company will have the right to maintain its 20% participating interest or its interest could ultimately be converted into a carried 10% net profits interest if the Company elects not to participate as a joint venture owner. The Company has previously expensed all of its costs associated with the Celaya property and accordingly recognized a gain of $0.2 million from the farm-out of the property in 2016 and will recognize an additional gain of $1.0 million from the execution of the amendment to the agreement in the first quarter 2018. The $0.2 million gain recognized in 2016 is included in “ Other operating income, net ” in the accompanying Consolidated Statements of Operations and Comprehensive Loss. In April 2016, the Company entered into an option agreement under which Santacruz Silver Mining Ltd. (“Santacruz”) may acquire the Company’s interest in certain nonstrategic mineral claims located in the Zacatecas Mining District, Zacatecas, Mexico (the “Zacatecas Properties”) for a series of payments totaling $1.5 million, including a final payment of $0.5 million due in April 2018. To date, Santacruz has paid the Company approximately $0.9 million. The Company and Santacruz amended the option agreement in February 2018 to extend the due dates for the remaining series of payments through September 2018. To complete the acquisition of the Zacatecas Properties Santacruz must now make three additional payments of $225,000 each in March, June and September 2018. Santacruz has the right to terminate the option agreement at any time, and the agreement could be terminated, at the Company’s option, if Santacruz fails to make subsequent payments when due. The Company has previously expensed all of its costs associated with the Zacatecas Properties and accordingly recognized a gain of $0.5 million and $0.4 million in 2017 and 2016 respectively, included in “ Other operating income, net ” in the accompanying Consolidated Statements of Operations and Comprehensive Loss. The Asset retirement cost (“ARC”) is all related to the Company’s Velardeña Properties. The amounts for ARC have been fully depreciated at December 31, 2017. The decrease in the ARC during the period is related to an adjustment to the ARO, as discussed below in Note 11. |
Accounts Payable and Other Accr
Accounts Payable and Other Accrued Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Accounts Payable and Other Accrued Liabilities | |
Accounts Payable and Other Accrued Liabilities | 9. The Company’s accounts payable and other accrued liabilities consist of the following: December 31, December 31, 2017 2016 (in thousands) Accounts payable and accruals $ 310 $ 344 Accrued employee compensation and benefits 1,246 880 $ 1,556 $ 1,224 December 31, 2017 Accounts payable and accruals at December 31, 2017 consist primarily of $0.1 million and $0.2 million due to contractors and suppliers related to the Company’s Velardeña Properties and corporate administrative activities, respectively. In the case of the Velardeña Properties, amounts due also include VAT payable that is partially offset by a small VAT receivable. Accrued employee compensation and benefits at December 31, 2017 consist of $0.2 million of accrued vacation payable, $0.6 million of withholding taxes and benefits payable (of which $0.3 million is related to activities at the Velardeña Properties) and $0.4 million related to the Key Employee Long-Term Incentive Plan ("KELTIP") (see Note 15). December 31, 2016 Accounts payable and accruals at December 31, 2016 consist primarily of $0.1 million and $0.2 million due to contractors and suppliers related to the Company’s Velardeña Properties and corporate administrative activities, respectively. In the case of the Velardeña Properties, amounts due also include VAT payable that is a partial offset to the small VAT receivable. Accrued employee compensation and benefits at December 31, 2016 consist of $0.2 million of accrued vacation payable, $0.4 million of withholding taxes and benefits payable (of which $0.2 million is related to activities at the Velardeña Properties) and $0.3 million related to the KELTIP (see Note 15). |
Convertible Note Payable - Rela
Convertible Note Payable - Related Party, Net | 12 Months Ended |
Dec. 31, 2017 | |
Convertible Note Payable – Related Party, Net | |
Convertible Note Payable – Related Party, Net | 10. In October 2015, the Company borrowed $5.0 million from Sentient, the Company’s largest stockholder, pursuant to the terms of a Senior Secured Convertible Note the (“Sentient Note”) and a related loan agreement (the “Sentient Loan”), with principal and accrued interest due on October 27, 2016. In January 2016, upon approval by the Company’s stockholders, the Sentient Note became convertible, solely at Sentient's option, into shares of the Company's common stock at a price equal to the lowest of: 1) $0.289, 90 percent of the 15-day volume weighted average price ("VWAP") for the period immediately preceding the loan closing date, 2) 90 percent of the 15-day VWAP for the period immediately preceding the loan conversion date, or 3) an anti-dilution adjusted price based on the lowest price for which the Company has sold its stock following the loan closing date. The loan provided for interest at a rate of 9% per annum, compounded monthly. On February 11, 2016, Sentient converted approximately $3.9 million of principal and $0.1 million of accrued interest (representing the total amount of accrued interest at the conversion date) on the Sentient Note into 23,355,000 shares of the Company's common stock at an exercise price of approximately $0.172 per share, equal to 90% of the 15-day VWAP immediately preceding the conversion date. On June 10, 2016, Sentient converted the remaining approximately $1.1 million of principal and approximately $34,000 of accrued interest (representing the total amount of accrued interest at the conversion date) into 4,011,740 shares of the Company's common stock at an exercise price of approximately $0.289 per share, equal to 90% of the 15 ‐ day VWAP immediately preceding the loan’s original issue date. The beneficial conversion feature of the Sentient Note represented an embedded derivative as defined by ASC 815 "Derivatives and Hedging" ("ASC 815"). ASC 815 provides that a derivative instrument's fair value must be bifurcated from the note and separately recorded on the Company's Consolidated Balance Sheet. The Company used a third party consultant to value the embedded derivative in the Sentient Note employing a Monte Carlo type probability analysis, which falls within Level 3 of the fair value hierarchy (see Note 13). For purposes of valuing the embedded derivative as of the Sentient Loan closing date, at December 31, 2015, at February 11, 2016 (first partial conversion date), and at March 31, 2016, the valuation model took into account, among other items: 1) the probability of successfully achieving stockholder approval of the Sentient Note’s conversion feature, 2) future variations in the Company’s stock price, and 3) the probability of entering into an equity transaction prior to the Sentient Loan maturity date that would lower the conversion price. It was determined that the embedded derivative had a fair value of approximately $1.1 million at October 27, 2015, the date the Company entered into the Sentient Loan. Subsequent mark-to-market changes in the value of the derivative were recorded as income or loss in the Consolidated Statements of Operations and Comprehensive Loss. The Sentient Note was recorded net of the bifurcated embedded derivative at October 27, 2015 with the $1.1 million difference between the face value and the recorded value of the Note representing a loan discount that was amortized to interest expense over the life of the loan using the interest rate method. The Company incurred approximately $0.3 million in legal and other costs associated with the Sentient Loan. Per the guidance of ASU 2015-03 the loan costs were presented as a reduction to the note payable on the accompanying Consolidated Balance Sheets and were amortized to interest expense over the life of the Sentient note using the interest rate method. The Company adjusted the recorded value of the Sentient Loan at the first partial conversion date and at March 31, 2016 to reflect the amortization of the loan discount and loan costs, shown as “ Interest expense ” in the Consolidated Statements of Operations and Comprehensive Loss. For the nine months ended September 30, 2016, the Company recorded a total noncash loss on debt extinguishment of $1.7 million reflecting the difference between the value of the shares issued to Sentient as a result of the February 11, 2016 conversion and the recorded value of the Sentient Loan, including related loan costs, loan discount and embedded derivative eliminated at the conversion date. The Company marked-to-market the embedded derivative at the February 11, 2016 conversion date and recorded a total derivative loss of $0.8 million for the nine months ended September 30, 2016 in the Condensed Consolidated Statements of Operations and Comprehensive Loss. At December 31, 2017 and December 31, 2016, the Sentient Note had been fully converted and the Company had no outstanding debt. |
Asset Retirement Obligation and
Asset Retirement Obligation and Reclamation Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Asset Retirement Obligation and Reclamation Liabilities | |
Asset Retirement Obligation and Reclamation Liabilities | 11. The Company retained the services of a mining engineering firm to prepare a detailed closure plan for the Velardeña Properties. The plan was completed during the second quarter 2012 and indicated that the Company had an ARO and offsetting ARC of approximately $1.9 million. The estimated $3.5 million ARO and ARC that was recorded at the time of the acquisition of the Velardeña Properties was adjusted accordingly. The Company will continue to accrue additional estimated ARO amounts based on an asset retirement plan as activities requiring future reclamation and remediation occur. During the year ended December 31, 2017 the Company recognized approximately $0.2 million of accretion expense and approximately $4,000 of amortization expense related to the ARC. The following table summarizes activity in the Velardeña Properties ARO: Year Ended December 31, 2017 2016 (in thousands) Beginning balance $ 2,380 $ 2,480 Changes in estimates, and other (128) (293) Accretion expense 196 193 Ending balance $ 2,448 $ 2,380 The decrease in the ARO recorded during the years ended December 31, 2017 and 2016 is the result of changes in assumptions related to inflation factors and discount rates used in the determination of future cash flows. The ARO set forth on the accompanying Condensed Consolidated Balance Sheets at December 31, 2017 and December 31, 2016 include approximately $50,000 of reclamation liabilities related to activities at the El Quevar project in Argentina. |
Other Liabilities
Other Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Other Liabilities | |
Other Liabilities | 12. The Company recorded nil amounts of other current liabilities at December 31, 2017 and December 31, 2016. During the first four months of 2016 the Company paid approximately $0.2 million of Argentine tax on equity leaving approximately $0.2 million of estimated interest and penalties awaiting a final assessment from the tax authorities. During the third quarter 2016 the Argentine government adopted an amnesty program that the Company effectively used to eliminate the remaining $0.2 million of interest and penalties that had been accrued. The reversal of the accrual reduced expenses incurred at the El Quevar project during the third quarter 2016. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurements | |
Fair Value Measurements | 13. Financial assets and liabilities and nonfinancial assets and liabilities are measured at fair value on a recurring (annual) basis under a framework of a fair value hierarchy which prioritizes the inputs into valuation techniques used to measure fair value into three broad levels. This hierarchy gives the highest priority to quoted prices (unadjusted) in active markets and the lowest priority to unobservable inputs. Further, financial assets and liabilities should be classified by level in their entirety based upon the lowest level of input that was significant to the fair value measurement. The three levels of the fair value hierarchy per ASC 820 are as follows: Level 1: Unadjusted quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date. Level 2: Quoted prices in inactive markets for identical assets or liabilities, quoted prices for similar assets or liabilities in active markets, or other observable inputs either directly related to the asset or liability or derived principally from corroborated observable market data. Level 3: Unobservable inputs due to the fact that there is little or no market activity. This entails using assumptions in models which estimate what market participants would use in pricing the asset or liability. The Company has consistently applied the valuation techniques discussed in Notes 2, 10 and 15 in all periods presented. Recurring Fair Value Measurements The following table summarizes the Company’s financial assets and liabilities measured on a recurring basis at fair value at December 31, 2017 and 2016 by respective level of the fair value hierarchy: Level 1 Level 2 Level 3 Total (in thousands) At December 31, 2017 Assets: Cash and cash equivalents $ 3,250 $ — $ — $ 3,250 Trade accounts receivable 314 — — 314 Short-term investments 238 — — 238 $ 3,802 $ — $ — $ 3,802 At December 31, 2016 Assets: Cash and cash equivalents $ 2,588 $ — $ — $ 2,588 Trade accounts receivable 380 — — 380 Trade accounts receivable - related party 643 — — 643 Short-term investments 334 — — 334 $ 3,945 $ — $ — $ 3,945 Liabilities: Warrant liability - related party $ — $ — $ 976 $ 976 Warrant liability — — 922 922 $ — $ — $ 1,898 $ 1,898 The Company’s cash equivalents, comprised principally of U.S. treasury securities, are classified within Level 1 of the fair value hierarchy. The Company’s trade accounts receivable are classified within Level 1 of the fair value hierarchy and are related to the oxide plant lease per the terms of the lease rates established in the plant lease agreement. At December 31, 2016, the Company recorded a liability for warrants to acquire the Company’s stock as a result of anti-dilution clauses in the warrant agreements that could result in a resetting of the warrant exercise price in the event the Company were to issue additional shares of its common stock in a future transaction at a price lower than the current exercise price of the warrants (see Note 15). The Company assesses the fair value of its warrant liability at the end of each reporting period, with changes in the value recorded as “ Warrant derivative (loss) gain ” on the Company’s Condensed Consolidated Statements of Operations and Comprehensive Loss. The valuation policies are approved by the Chief Financial Officer who reviews and approves the inputs used in the fair value calculations and the changes in fair value measurements from period to period for reasonableness. Fair value measurements are discussed with the Company’s Chief Executive Officer, as deemed appropriate. The warrant liability had been recorded at fair value as of December 31, 2016 based primarily on a valuation performed by a third party expert using a Monte Carlo simulation, which falls within Level 3 of the fair value hierarchy. The valuation model takes into account the probability that the Company could issue additional shares in a future transaction at a lower price than the current exercise price of the warrants. The Company did not have a warrant liability at December 31, 2017 as the result of a change in accounting principal during the period as discussed in Note 3. The beneficial conversion feature of the Sentient Note represents an embedded derivative as defined by ASC 815 (see Note 10). ASC 815 provides that a derivative instrument’s fair value must be bifurcated from the host contract and separately recorded on the Company’s Condensed Consolidated Balance Sheets. At December 31, 2015 and at each of the conversion dates (see Note 10), the Company had recorded a derivative liability related to the beneficial conversion feature of the Sentient Note. On June 10, 2016, the remaining Sentient Note and related embedded derivative had been fully retired. The Company assesses the fair value of the derivative liability at the end of each reporting period, with changes in the value recorded as “ Derivative loss ” on the Company’s Condensed Consolidated Statements of Operations and Comprehensive Loss. The valuation policies are approved by the Chief Financial Officer who reviews and approves the inputs used in the fair value calculations and the changes in fair value measurements from period to period for reasonableness. Fair value measurements are discussed with the Company’s Chief Executive Officer, as deemed appropriate. The derivative liability was recorded at fair value at December 31, 2015 and each of the conversion dates based primarily on a valuation performed by a third party expert using a Monte Carlo simulation, which falls within Level 3 of the fair value hierarchy. The valuation model takes into account, among other items: 1) the probability of successfully achieving stockholder approval of the loan’s conversion feature, 2) future variations in the Company’s stock price, and 3) the probability of entering into an equity transaction prior to the Loan maturity date that would lower the conversion price. In addition to the warrant exercise prices (see Note 15) and Sentient Note conversion price (see Note 10) other significant inputs to the warrant valuation model and derivative valuation model included the following as applicable: December 31, 2016 Company's ending stock price $ 0.58 Company's stock volatility Applicable risk free interest rate An increase or decrease in the Company’s stock price, in isolation, would result in a relatively lower or higher fair value measurement respectively. A decrease in the probability of the issuance of additional common stock at a lower price than the current warrant exercise price would result in a lower value for the warrants. The table below highlights the change in fair value of the warrant liability and the derivative liability. Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Warrant Liabilities (in thousands) Ending balance at December 31, 2015 $ 1,898 Change in estimated fair value (364) Ending balance at December 31, 2016 $ 1,534 At December 31, 2017, the remaining warrants are recorded as equity as the result of a change in accounting principal as fully detailed in Note 3. Non-recurring Fair Value Measurements There were no non-recurring fair value measurements at December 31, 2017 or December 31, 2016. The Company assesses the fair value of its long lived assets if circumstances indicate a change in the fair value has occurred. The valuation policies are approved by the Chief Financial Officer who reviews and approves the inputs used in the fair value calculations and the changes in fair value measurements from period to period for reasonableness. Fair value measurements are discussed with the Company’s Chief Executive Officer, as deemed appropriate. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
Income Taxes | 14. The Company accounts for income taxes in accordance with the provisions of ASC 740 on a tax jurisdictional basis. The provision for income taxes consists of the following: For the Year Ended December 31, 2017 2016 CURRENT TAXES: (in thousands) United States $ — $ — Other Countries 13 — $ 13 $ — DEFERRED TAXES: United States $ — $ — Other Countries — — Total income tax provision $ 13 $ — Income (loss) from operations before income taxes by country consists of the following: For the Year Ended December 31, 2017 2016 (in thousands) United States $ (7,197) $ (11,732) Other Countries 3,318 1,073 $ (3,879) $ (10,659) In 2017 the Company recorded $13,000 of current tax expense stemming from taxable income of a subsidiary in Mexico, and no current taxes were recorded in 2016. No deferred taxes were recorded in 2017 or 2016, as any such tax expense or benefit incurred during the year has been offset against a change in the valuation allowance of various deferred tax assets in each country. A reconciliation of the provision for income taxes computed at the statutory rate to the provision for income taxes as shown in the Consolidated Statements of Operations and Comprehensive Loss is summarized below. For Year Ended December 31, 2017 2016 (in thousands) Tax expense (benefit) at US rate of 35% $ (1,319) $ (3,624) Other adjustments: Rate differential of other jurisdictions (70) (98) Effects of foreign earnings 310 (786) Change in valuation allowance 33,975 (4,690) Provision to tax return true-ups (33,720) 209 Exchange rate changes on deferred tax assets (8,444) 8,802 Effect of a change in tax rates 11,516 (1,177) Debt extinguishment loss — 550 Warrant liability loss — 838 Tax loss on sale of subsidiary (1,693) — Inflation adjustment on net operating losses (2,491) — Expired net operating losses 1,931 — Other 18 (24) Income tax provision $ 13 $ — The components of the deferred tax assets and deferred tax liabilities are as follows: For the year ended December 31, 2017 2016 (in thousands) Deferred tax assets: Net operating loss carryforwards $ 131,866 $ 96,038 Stock-based compensation 517 1,435 Property, plant and equipment 4,307 7,545 Other 3,274 1,016 139,964 106,034 Less: Valuation allowance (139,795) (105,820) Total deferred tax assets 169 214 Deferred tax liabilities: Property, plant and equipment (169) (195) Other — (19) Total deferred tax liabilities (169) (214) Net deferred tax asset (liability) $ — $ — In accordance with ASC 740, the Company presents deferred tax assets net of its deferred tax liabilities on a tax jurisdictional basis on its Consolidated Balance Sheets. The net deferred tax liability as of December 31, 2017 and December 31, 2016 was zero. At the end of 2017 a new U.S. tax law was enacted, lowering the U.S. corporate tax rate to 21% from the top rate of 35% beginning in 2018. The tax rate change resulted in a reduction of the Company’s U.S. deferred tax assets by $10.2 million. The Company’s deferred tax assets are currently completely offset by a valuation allowance so the reduction in U.S. deferred tax assets has no impact on the Company’s financial statements for the year ended December 31, 2017. In addition, the new tax law imposes a transition tax on the accumulated earnings and profits of controlled foreign corporations (“CFC’s). None of the Company’s CFCs currently have accumulated earnings and profits and therefore the Company has no transition tax liability. No other provisions of the new tax law had a material impact on the Company’s financial statements for the period ended December 31, 2017. Based on the Company’s current interpretation and subject to the release of the related regulations and any future interpretive guidance, the Company believes the effects of the change in the tax law incorporated herein are substantially complete. At December 31, 2017 the Company had net operating loss carryforwards in the U.S. and in certain non-U.S. jurisdictions totaling $484.9 million. Of these, $83.9 million is related to the Velardeña Properties in Mexico and expires in future years through 2027, $22.6 million is related to other Mexico exploration activities expiring in future years through 2027, $121.1 million exists in Spain and has no expiration date, and $186.5 million exists in other non-U.S. countries, which will expire in future years through 2027. In the U.S. there are $70.8 million of net operating loss carryforwards which will expire in future years through 2037. The valuation allowance offsetting the net deferred tax assets of the Company of $139.8 million and $105.8 million at December 31, 2017 and 2016, respectively, relates primarily to the uncertain utilization of certain deferred tax assets, primarily net operating loss carryforwards, in various tax jurisdictions. The Company continually assesses both positive and negative evidence to determine whether it is more likely than not that deferred tax assets can be realized prior to their expiration. The Company, a Delaware corporation, and its subsidiaries file tax returns in the United States and in various foreign jurisdictions. The tax rules and regulations in these countries are highly complex and subject to interpretation. The Company’s tax returns are subject to examination by the relevant taxing authorities and in connection with such examinations, disputes can arise with the taxing authorities over the interpretation or application of certain tax rules within the country involved. In accordance with ASC 740, the Company identifies and evaluates uncertain tax positions, and recognizes the impact of uncertain tax positions for which there is less than a more-likely-than-not probability of the position being upheld upon review by the relevant taxing authority. Such positions are deemed to be “unrecognized tax benefits” which require additional disclosure and recognition of a liability within the financial statements. If recognized, none of the unrecognized tax benefits would affect the Company’s effective tax rate. Below is a reconciliation of the beginning and ending amount of gross unrecognized tax benefits, which excludes any estimated penalties and interest on all identified unrecognized tax benefits. The Company’s unrecognized tax benefits as of December 31, 2017 and 2016 are completely offset by net deferred tax benefits and therefore do not appear on the Consolidated Balance Sheet. The Year Ended December 31, 2017 2016 (in thousands) Gross unrecognized tax benefits at beginning of period $ 740 $ 937 Increases for tax positions taken during prior years — — Decreases relating to settlements with taxing authorities — — Reductions due to lapse of statute of limitations (154) (197) Gross unrecognized tax benefits at end of period $ 586 $ 740 Tax years as early as 2012 remain open and are subject to examination in the Company’s principal tax jurisdictions. The Company does not expect a significant change to its net unrecognized tax benefits over the next 12 months. No interest and penalties were recognized in the Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2017 or 2016, and there were no interest and penalties recognized in the statement of financial position as of December 31, 2017 and 2016. The Company classifies income tax related interest and penalties as income tax expense. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2017 | |
Equity | |
Equity | 15. Cancellation of Treasury Shares Pursuant to the terms of an agreement between the Company and ECU, relating to the merger of the two companies on September 2, 2011, ECU shareholders had the right to receive 0.05 shares of the Company’s common stock for each share of ECU common stock held. On the sixth anniversary following the merger any unconverted shares expired per the terms of the agreement. Accordingly, during December 2017, ECU shares being held for conversion, representing 125,739 shares of the Company, were returned to treasury and canceled. Consideration Shares On August 2, 2017, the Company granted Hecla an option to extend the oxide plant lease for an additional period of up to two years (see Note 16). As partial consideration for the option Hecla purchased $1.0 million, or approximately 1.8 million shares, of the Company’s common stock (the “Consideration Shares”), issued at a price of $0.55 per share, which was the undiscounted 30-day volume weighted average stock price. The Consideration Shares were offered and sold without registration under the Securities Act of 1933, as amended (the “Act”) in reliance on the exemptions provided by Section 4(a)(2) of the Act and/or Regulation D promulgated thereunder. Under the terms of the Option Agreement (defined herein), the Company agreed to register with the SEC the resale of the Consideration Shares. A resale registration statement with the SEC became effective in September 2017. The $1.0 million received for the Consideration Shares, net of $71,000 in legal and stock exchange issuance fees, has been recorded as equity in the Condensed Consolidated Balance Sheets at December 31, 2017. At the Market Offering Agreement In December 2016, the Company entered into an at-the-market offering agreement (as amended from time to time, the “ATM Agreement”) with H. C. Wainwright & Co., LLC (“Wainwright”), under which the Company may, from time to time, issue and sell shares of the Company’s common stock through Wainwright as sales manager in an at-the-market offering under a prospectus supplement for aggregate sales proceeds of up to $5.0 million (the “ATM Program”) or a maximum of 10 million shares. On September 29, 2017, the Company entered into an amendment to the ATM Agreement with Wainwright to reflect a new registration statement on Form S-3 (File No. 333-220461) under which shares of the Company’s common stock may be sold under the ATM Program. The ATM Agreement will remain in full force and effect until the earlier of December 31, 2018, or the date that the ATM Agreement is terminated in accordance with the terms therein. Offers or sales of common shares under the ATM Program will be made only in the United States and no offers or sales of common shares under the ATM Agreement will be made in Canada. The common stock will be distributed at the market prices prevailing at the time of sale. As a result, prices of the common stock sold under the ATM Program may vary as between purchasers and during the period of distribution. The ATM Agreement provides that Wainwright will be entitled to compensation for its services at a commission rate of 2.0% of the gross sales price per share of common stock sold. The Company reimbursed certain legal expenses of Wainwright totaling $50,000 and incurred additional accounting, legal, and regulatory costs of approximately $109,000 in connection with establishing the ATM Program. Such costs have been deferred and will be amortized to equity as sales are completed under the ATM Program. At December 31, 2017, unamortized costs totaling $136,000 appear on the accompanying Consolidated Balance Sheets as “ Prepaid expense and other assets.” During the year ended December 31, 2017 the Company sold an aggregate of approximately 1,024,000 common shares under the ATM Program at an average price of $0.70 per common share for gross proceeds of approximately $720,000. The Company paid cash commissions and other nominal transaction fees to Wainwright totaling approximately $16,000 or 2.2% of the gross proceeds and amortized approximately $23,000 of deferred accounting, legal and regulatory costs resulting in a net amount of approximately $682,000 that has been recorded as equity in the Condensed Consolidated Balance Sheets. During the year ended December 31, 2017 the Company also incurred approximately $34,000 in additional accounting, legal, and regulatory costs associated with the ATM Program that were included in “ General and administrative costs ” in the Condensed Consolidated Statement of Operations and Comprehensive Loss. Sentient Note conversion On February 11, 2016, Sentient converted approximately $3.9 million of principal and $0.1 million of accrued interest (representing the total amount of accrued interest at the conversion date) into 23,355,000 shares of the Company's common stock at an exercise price of approximately $0.172 per share, reflecting 90% of the 15-day VWAP immediately preceding the conversion date. On June 10, 2016, Sentient converted the remaining approximately $1.1 million of principal and approximately $34,000 of accrued interest (representing the total amount of accrued interest at the conversion date) pursuant to the Sentient Note into 4,011,740 shares of the Company's common stock at an exercise price of approximately $0.289 per share, equal to 90% of the 15 ‐ day VWAP immediately preceding the loan’s original issue date (see Note 10). At September 30, 2016 the Sentient Note had been fully converted and the Company had no further debt outstanding. After conversion, and following the sale of additional shares of the Company’s common stock in 2017 pursuant to the ATM Program (discussed above), Sentient holds approximately 45% of the Company’s 91.9 million shares of issued and outstanding common stock. Offering and Private Placement On May 6, 2016, the Company issued 8.0 million registered shares of common stock at a purchase price of $0.50 per share in a registered direct offering (the “Offering”) resulting in gross proceeds of $4.0 million. The Company incurred costs and fees of approximately $0.4 million related to the Offering, resulting in net proceeds of approximately $3.6 million. In connection with the Offering, each investor received in a private placement an unregistered warrant to purchase three ‐ quarters of a share of common stock for each share of common stock purchased. The 6.0 million warrants have an exercise price of $0.75 per share and are exercisable beginning six months after the date of issuance and will expire five years from the initial exercise date. The net proceeds of the Offering were recorded in equity and appear as a separate line item in the Consolidated Statements of Changes in Equity. Using the Black Scholes model, the fair value of the warrants issued was $3.6 million, considering the closing stock price on April 29, 2016 (the first business day preceding May 2, 2016, the date the Company entered into a definitive agreement to issue the shares), the exercise price and exercise period of the warrants, the Company’s volatility rate of 105%, and the applicable risk free rate of 0.74%. Equity Incentive Plans In May 2014, the Company’s stockholders approved amendments to the Company’s 2009 Equity Incentive Plan, adopting the Amended and Restated 2009 Equity Incentive Plan (the “Equity Plan”), pursuant to which awards of the Company’s common stock may be made to officers, directors, employees, consultants and agents of the Company and its subsidiaries. The Company recognizes stock-based compensation costs using a graded vesting attribution method whereby costs are recognized over the requisite service period for each separately vesting portion of the award. The following table summarizes the status of the Company’s restricted stock grants issued under the Equity Plan at December 31, 2017 and 2016 and changes during the years then ended: The Year Ended December 31, 2017 2016 Weighted Weighted Average Grant Average Date Fair Grant Date Number of Value Per Number of Fair Value Restricted Stock Grants Shares Share Shares Per Share Outstanding at beginning of period 100,000 $ 0.63 84,170 $ 0.46 Granted during the period 200,000 0.53 100,000 0.63 Restrictions lifted during the period (96,666) 0.60 (84,170) 0.46 Forfeited during the period — — — — Outstanding at end of period 203,334 $ 0.55 100,000 $ 0.63 During the year ended December 31, 2017 restricted stock grants were made to two employees. During the year ended December 31, 2016 restricted stock grants were made to three employees. Restrictions were lifted on 46,666 shares during the year ended December 31, 2017 on the anniversaries of grants made to three employees in prior years. In addition, during 2017, 50,000 shares of a 150,000 share grant to a new employee vested on the grant date. Restrictions were lifted on 84,170 shares during the year ended December 31, 2016 on the anniversaries of grants made to two officers in prior years. For the year ended December 31, 2017 the Company recognized approximately $0.1 million of compensation expense related to the restricted stock grants. For the year ended December 31, 2016 the Company recognized a nominal amount of compensation expense related to the restricted stock grants. The Company expects to recognize approximately $0.1 million of compensation expense related to these grants over the next 35 months. The following table summarizes the status of the Company’s stock option grants issued under the Equity Plan at December 31, 2017 and 2016 and changes during the years then ended: The Year Ended December 31, 2017 2016 Weighted Weighted Average Average Exercise Exercise Number of Price Per Number of Price Per Equity Plan Options Shares Share Shares Share Outstanding at beginning of period 95,810 $ 8.02 245,810 $ 3.47 Granted during the period — — — — Forfeited or expired during period (55,500) 8.00 (150,000) 0.56 Exercised during period — — — — Outstanding at end of period 40,310 $ 8.05 95,810 $ 8.02 Exercisable at end of period 40,310 $ 8.05 95,810 $ 8.02 Granted and vested 40,310 $ 8.05 95,810 $ 8.02 The Company does not expect to record any additional expense related to these options. Also, pursuant to the Equity Plan, the Company’s Board of Directors adopted the Non-Employee Director’s Deferred Compensation and Equity Award Plan (the “Deferred Compensation Plan”). Pursuant to the Deferred Compensation Plan the non-employee directors receive a portion of their compensation in the form of Restricted Stock Units (“RSUs”) issued under the Equity Plan. The RSUs vest on the first anniversary of the grant and each vested RSU entitles the director to receive one unrestricted share of common stock upon the termination of the director’s board service. The following table summarizes the status of the RSU grants issued under the Deferred Compensation Plan at December 31, 2017 and 2016 and changes during the years then ended: The Year Ended December 31, 2017 2016 Weighted Weighted Average Grant Average Date Fair Grant Date Number of Value Per Number of Fair Value Restricted Stock Units Shares Share Shares Per Share Outstanding at December 31, 2016 1,607,317 $ 1.28 1,245,285 $ 1.66 Granted during the period 280,000 0.48 530,000 0.42 Restrictions lifted during the period — — (167,968) 1.40 Forfeited during the period — — — — Outstanding at December 31, 2017 1,887,317 $ 1.16 1,607,317 $ 1.28 For the years ended December 31, 2017 and 2016 the Company recognized approximately $0.1 million and $0.2 million of compensation expense, respectively related to the RSU grants. The Company expects to recognize additional compensation expense related to the RSU grants of less than $0.1 million over the next six months. Restrictions lifted on 167,968 RSU shares during 2016 all relate to the retirement of Michael T. Mason from the Company’s Board of Directors during the year. Key Employee Long-Term Incentive Plan Pursuant to the KELTIP (see Note 9), KELTIP Units may be granted to certain officers and key employees of the Company, which units will, once vested, entitle such officers and employees to receive an amount in cash or in Company common stock measured generally by the price of the Company's common stock on the settlement date. The KELTIP Units are recorded as a liability as discussed in Note 9. During the year ended December 31, 2017 the Company awarded 435,000 KELTIP Units to two officers of the Company and recorded approximately $0.2 million of compensation expense, included in “ Stock based compensation ” in the Condensed Consolidated Statement of Operations and Comprehensive Loss. At December 31, 2017, the KELTIP Units were marked-to-market and the Company recognized approximately a $0.1 million reduction of compensation expense. At December 31, 2017 1,020,000 KELTIP Units were outstanding. During the year ended December 31, 2016 the Company awarded 585,000 KELTIP Units to two officers of the Company and recorded approximately $0.2 million of compensation expense, included in “ Stock based compensation ” in the Condensed Consolidated Statement of Operations and Comprehensive Loss. At December 31, 2016 the KELTIP Units were marked-to-market and the Company recognized approximately $0.1 million of additional compensation expense. At December 31, 2016 585,000 KELTIP Units were outstanding. Common stock warrants The following table summarizes the status of the Company’s common stock warrants at December 31, 2017 and December 31, 216, and the changes during the years then ended: The Year Ended December 31, 2017 2016 Weighted Weighted Number of Average Exercise Number of Average Exercise Underlying Price Per Underlying Price Per Common Stock Warrants Shares Share Shares Share Outstanding at December 31, 2016 17,578,950 $ 2.17 8,777,409 $ 3.96 Granted during period — — 6,000,000 0.75 Dilution adjustment 157,302 2,801,541 — Expired during period (6,258,080) 4.62 — — Exercised during period — — — Outstanding at December 31, 2017 11,478,172 $ 0.81 17,578,950 $ 2.17 The warrants relate to prior registered offerings and private placements of the Company’s stock. In September 2012, the Company closed on both a registered public offering and concurrent private placement with Sentient in which it sold units, consisting of one share of common stock and a five-year warrant to acquire one half of a share of common stock at an exercise price of $8.42 per share. A total of 3,431,649 warrant shares were issued and became exercisable on March 20, 2013 and expired on September 19, 2017, five years from the date of issuance. In September 2014 the Company closed on both a registered public offering and concurrent private placement with Sentient in which it sold units, consisting of one share of common stock and a five-year warrant to acquire one half of a share of common stock at an exercise price of $1.21 per share. A total of 4,746,000 warrant shares were issued that became exercisable on March 11, 2015 and will expire on September 10, 2019, five years from the date of issuance. In May 2016, the Company issued 8.0 million registered shares of common stock at a purchase price of $0.50 per share in a registered direct offering (the “Offering”) resulting in gross proceeds of $4.0 million. In connection with the Offering, each investor received an unregistered warrant to purchase three ‐ quarters of a share of common stock for each share of common stock purchased. The resulting 6,000,000 warrant shares have an exercise price of $0.75 per share, became exercisable on November 7, 2016 and will expire on November 6, 2021, five years from the initial exercise date. The September 2012 and 2014 warrant agreements contain anti-dilution clauses that could result in a resetting of the warrant exercise price and the number of warrant shares outstanding in the event the Company were to issue additional shares of its common stock in a future transaction at an offering price lower than the current exercise price of the warrants. As a result of the subsequent issuance of the Company’s common stock in separate transactions, including the September 2014 registered public offering and private placement, the conversion of the Sentient Note, the May 2016 Offering and private placement, the ATM Program and the Hecla Share Issuance (defined herein) the exercise price of the 2012 and 2014 warrants has been adjusted downward. As a result of these transactions, the number of shares of common stock issuable upon exercise of the September 2012 warrants, prior to their expiration on September 19, 2017, had increased from the original 3,431,649 shares to 6,258,080 shares (2,826,431 share increase) and the exercise price has been reduced from the original $8.42 per share to $4.62 per share. The number of shares of common stock issuable upon exercise of the September 2014 warrants has increased from the original 4,746,000 shares to 5,478,172 shares (732,172 share increase) and the exercise price has been reduced from the original $1.21 per share to $0.87 per share. The warrants issued in September 2012 and September 2014 were recorded as a liability on the balance sheet at December 31, 2016, as a result of anti-dilution clauses in the warrant agreements as discussed above. The May 2016 warrants are not subject to anti-dilution and the warrants are recorded as equity. At December 31, 2016, the total liability recorded for the 2012 and 2014 warrants was approximately $1.9 million, consisting of approximately $1.8 million for the 2014 warrants and $0.1 million for the 2012 warrants. The September 2012 warrants expired during 2017 and as a result of a change in accounting principle the September 2014 warrants were recorded in equity on the balance sheet at December 31, 2017 (see Note 3). As a result, the Company did not record a warrant liability at December 31, 2017. |
Revenue, Deferred Revenue and R
Revenue, Deferred Revenue and Related Costs | 12 Months Ended |
Dec. 31, 2017 | |
Revenue, Deferred Revenue and Related Costs | |
Revenue, Deferred Revenue and Related Costs | 16. Oxide Plant Lease and Oxide Plant Lease Costs For the year ended December 31, 2017 the Company recorded revenue of approximately $6.7 million and related costs of approximately $2.2 million associated with the lease of the Velardeña Properties oxide plant. The Company recognizes oxide plant lease fees and reimbursements for labor, utility and other costs as “ Revenue: Oxide plant lease ” in the Condensed Consolidated Statements of Operations and Comprehensive Loss following the guidance of ASC 605 regarding "income statement characterization of reimbursements received for "out-of-pocket expenses incurred" and "reporting revenue gross as a principal versus net as an agent". ASC 605 supports recording as gross revenue fees received for the reimbursement of expenses in situations where the recipient is the primary obligor and has certain discretion in the incurrence of the reimbursable expense. The actual costs incurred for reimbursed direct labor and utility costs are reported as “ Oxide plant lease costs ” in the Condensed Consolidated Statements of Operations and Comprehensive Loss. The Company recognizes lease fees during the period the fees are earned per the terms of the lease. During August 2017, the Company granted Hecla an option to extend the oxide plant lease for an additional period of up to two years ending no later than December 31, 2020 (the “Extension Period”) in exchange for a $1.0 million upfront cash payment and the purchase of $1.0 million, or approximately 1.8 million shares, of the Company’s common stock, issued at a price of $0.55 per share, which was the undiscounted 30-day volume weighted average stock price (see Note 15). The option and lease extension were memorialized in (i) an Option Agreement dated August 2, 2017 among the Company and Hecla Mining Company (the “Option Agreement”), and (ii) a Second Amendment to Master Agreement and Lease Agreement dated August 2, 2017 among Minera William S.A. de C.V., an indirect subsidiary of the Company, and Minera Hecla S.A. de C.V., an indirect subsidiary of Hecla Mining Company (the “Second Amendment”). Under the Second Amendment, Hecla must exercise the option to extend the lease no later than October 3, 2018. All of the fixed fees and throughput related charges remain the same as under the original lease. Similar volume limitations apply to any required future tailings expansions, which Hecla will fund, leaving unused at the end of the lease term an agreed amount of capacity in the expanded tailings facility. Pursuant to the Second Amendment, Hecla will have the right to terminate the lease during the Extension Period for any reason with 120 days’ notice. Hecla will also have a one-time right of first refusal to continue to lease the plant following a termination notice through December 31, 2020 if the Company decides to use the oxide plant for its own purposes before December 31, 2020. The Company expects to recognize the $1.0 million of income from granting the option over the expected life of the lease from August 2, 2017 through December 31, 2020 on a straight-line basis, including such income in “ Other operating income ” in the Condensed Consolidated Statements of Operations and Comprehensive Loss. As of December 31, 2017, the unamortized portion of the lease option payment totaled approximately $0.9 million recorded as short and long term “ Deferred revenue ” on the Condensed Consolidated Balance Sheets. The $1.0 million received for the Consideration Shares, net of $71,000 in legal and stock exchange issuance fees, has been recorded as equity in the Condensed Consolidated Balance Sheets at December 31, 2017. For the year ended December 31, 2016 the Company recorded revenue of approximately $6.4 million and related costs of approximately $2.0 million associated with the lease of the Velardeña Properties oxide plant. |
Interest and Other Income
Interest and Other Income | 12 Months Ended |
Dec. 31, 2017 | |
Interest and Other Income. | |
Interest and Other Income | 17. For the year ended December 31, 2017 the Company had only a nominal amount of interest and other income, primarily related to interest on amounts receivable from the sale of mining equipment as discussed in Note 8. For the year ended December 31, 2016 the Company reported interest and other income of $0.4 million, which is primarily related to a refund of previously paid social security taxes in Mexico. |
Derivative Loss
Derivative Loss | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Loss | |
Derivative Loss | 18. During the year ended December 31, 2016 the Company recorded approximately $1.7 million of warrant derivative loss related to an increase in the fair value of the liability recorded for warrants to acquire the Company’s common stock (see Note 13). The warrant liability at December 31, 2016 was recorded at fair value based primarily on a valuation performed by a third-party expert using a Monte Carlo simulation which falls within Level 3 of the fair value hierarchy (see Note 13). The third party valuation model takes into account the probability that the Company could issue additional shares in a future transaction at a lower price than the current exercise price of the warrants. Significant inputs to the third party valuation model included prices for the warrants disclosed above, the probability of an additional issuance of the Company’s common stock at a lower price than the current warrant exercise price and the inputs in the table below for the respective periods. The Company did not have a warrant liability at December31, 2017 as the result of a change in accounting principal during the period as discussed in Note 3. During the year ended December 31, 2016 the Company recorded approximately $0.8 million of derivative loss related to an increase in the fair value of the derivative liability related to the Sentient Loan. The derivative liability was recorded at fair value at June 10, 2016, the date of the conversion of the remaining note (see Note 10), based primarily on a valuation performed by a third party expert using a Monte Carlo simulation, which falls within Level 3 of the fair value hierarchy (see Note 13). Significant inputs to the valuation model included: 1) future variations in the Company’s stock price, and 2) the probability of entering into an equity transaction prior to the loan maturity date that would lower the conversion price. At December 31, 2017 and December 31, 2016, the Sentient Loan had been fully converted. |
Cash flow information
Cash flow information | 12 Months Ended |
Dec. 31, 2017 | |
Cash flow information | |
Cash flow information | 19. The following table reconciles net loss for the period to cash used in operations: Year Ended December 31, 2017 2016 (in thousands) Cash flows from operating activities: Net loss $ (3,892) $ (10,659) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 952 1,548 Accretion of asset retirement obligation 196 193 Write off of loss contingency, net — (212) Asset write off — 24 Gain on reduction of asset retirement obligation (56) — Gain on sale of assets (608) (1,791) Amortization of deferred loan costs — 57 Warrant liability fair market adjustment — 1,688 Derivative liability fair market adjustment — 778 Accretion of loan discount — 372 Loss on debt extinguishment — 1,653 Stock compensation 296 593 Changes in operating assets and liabilities: Decrease in trade accounts receivable 683 166 Increase in prepaid expenses and other assets (142) (152) Decrease in inventories 3 85 (Increase) decrease in value added tax recoverable, net (149) 346 Increase in accrued interest payable net of amounts capitalized — 85 Increase (decrease) in deferred revenue 892 (500) Decrease in reclamation liability (8) (11) Increase (decrease) in accounts payable and accrued liabilities 226 (450) Decrease in deferred leasehold payments (23) (18) Net cash used in operating activities $ (1,630) $ (6,205) The Company did not make any cash payments for interest or income taxes during the years ended December 31, 2017 and 2016. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | 20. Leases and Purchase Commitments The Company has non-cancelable operating lease commitments as follows: 2018 2019 2020 2021 2022 Thereafter El Quevar mining concessions (estimated) $ 93 $ 93 $ 93 $ 93 $ 93 $ — Velardeña mining concessions (estimated) $ 70 $ 70 $ 70 $ 70 $ 70 $ — Office space $ 293 $ 274 $ — $ — $ — $ — The Company is required to make payments to the Argentine government to maintain its rights to the El Quevar mining concessions. The Company has made such payments totaling approximately $111,000 and $116,000 for the years ended December 31, 2017 and 2016, respectively. The Company is required to pay concession holding fees to the Mexican government to maintain its rights to the Velardeña Properties mining concessions. During the years ended December 31, 2017 and 2016 the Company made such payments totaling approximately $69,000 and $74,000 respectively, and annual payments under its surface right agreement with the local ejido of approximately $25,000. The Company has office leases for its corporate headquarters in Golden, Colorado, as well as for its Velardeña Properties offices in Mexico, and exploration offices in Mexico and Argentina. The lease for the corporate headquarters office space was renegotiated and extended during the first quarter 2014. The new lease reflects an approximately 46% reduction in space and an approximately 44% reduction in cost beginning March 1, 2014. The new lease expires November 30, 2019. Payments associated with the corporate headquarters lease were recorded to rent expense by the Company in the amounts of $226,000 and $224,000 for the years ended December 31, 2017 and 2016, respectively. The Company cannot currently estimate the life of the Velardeña Properties or El Quevar project. The table above assumes that no annual maintenance payments will be made more than five years after December 31, 2017. If the Company continues mining and processing or evaluations of restart at the Velardeña Properties beyond five years, the Company expects that it would make annual maintenance payments of approximately $70,000 per year for the life of the Velardeña mine. If the Company continues to evaluate development opportunities at the El Quevar project, the Company expects that it would make annual maintenance payments of approximately $93,000 per year for the life of the El Quevar mine. Payments associated with other exploration concessions the Company owns are not included because the Company has not completed exploration work on these concessions. Exploration success is historically low and the Company has the right to terminate the payments and release the concessions at any time. Contingencies The Company has recorded only nil amounts to loss contingencies at December 31, 2016, as discussed in Note 12. No loss contingencies were recorded at December 31, 2017. |
Foreign Currency
Foreign Currency | 12 Months Ended |
Dec. 31, 2017 | |
Foreign Currency | |
Foreign Currency | 21. Foreign Currency The Company conducts exploration and mining activities primarily in Mexico and Argentina, and gains and losses on foreign currency transactions are related to those activities. The Company’s functional currency is the U.S. dollar but certain transactions are conducted in the local currencies resulting in foreign currency transaction gains or losses. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Information | |
Segment Information | 22. The Company’s sole activity is the mining, construction and exploration of mineral properties containing precious metals. The Company’s reportable segments are based upon the Company’s revenue producing activities and cash consuming activities. The Company reports two segments, one for its Velardeña Properties in Mexico and the other comprised of non-revenue producing activities including exploration, construction and general and administrative activities. Intercompany revenue and expense amounts have been eliminated within each segment in order to report on the basis that management uses internally for evaluating segment performance. The financial information relating to the Company’s segments is as follows: Exploration, El Quevar, Costs Depreciation, Velardeña and Applicable Depletion and Administrative Pre-Tax Capital The Year ended December 31, 2017 Revenue to Sales Amortization Expense (Income)/Loss Total Assets Expenditures (in thousands) Velardeña Properties $ 6,691 $ 2,189 $ 584 $ 2,089 $ (3,330) $ 6,406 $ 79 Corporate, Exploration & Other — — 368 6,925 7,209 6,671 2 $ 6,691 $ 2,189 $ 952 $ 9,014 $ 3,879 $ 13,077 $ 81 The Year ended December 31, 2016 Velardeña Properties $ 6,400 $ 2,046 $ 1,116 $ 2,544 $ (2,167) $ 7,821 $ 35 Corporate, Exploration & Other — — 432 7,588 12,826 6,187 15 $ 6,400 $ 2,046 $ 1,548 $ 10,132 $ 10,659 $ 14,008 $ 50 All of the revenue for the two years presented was from the Company's Velardeña Properties in Mexico (see Note 16) and was all attributable to the lease of the oxide plant. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions | |
Related Party Transactions. | 23. The following sets forth information regarding transactions between the Company (and its subsidiaries) and its officers, directors and significant stockholders. Sale of Equipment: In August 2016, the Company sold certain mining equipment to Minera Indé, an indirect subsidiary of Sentient, for $687,000 (see Note 8), in a transaction approved by the Company’s Audit Committee and Board of Directors. At December 31, 2017 Sentient holds approximately 45% of the Company’s 91.9 million shares of issued and outstanding common stock. The equipment sold was excess equipment held at the Company’s Velardeña Properties that the Company did not expect to use. The Company used a third party consultant with experience in the used mining equipment market in Mexico to determine a fair value. The Company believes the price paid was at least equal to the fair market value of the equipment had it been sold through auction or in the open market. The Company received 10% of the sales price at the closing of the sale in August 2016, with the remainder, plus interest on the unpaid balance at an annual rate of 10%, due in February 2017. At December 31, 2016 the Company had recorded a receivable of $643,000 related to the sale, including accrued interest, included in “ Related party receivable ” in the accompanying Consolidated Balance Sheets. With the approval of a Special Committee of the Company’s Board of Directors, the Company and Minera Indé amended the original equipment sale on March 31, 2017 to include the sale of an additional piece of excess equipment for $185,000 and extend the time for payment relating to the original equipment sale. Upon execution of the amendment the Company received an additional payment of $100,000. The remaining principal and interest balance, plus additional interest on the unpaid balance at an annual rate of 10%, was amended to be due in August 2017. The Company recorded a gain of $105,000 on the sale of the additional equipment, included in “ Other operating income ” in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss, equal to the gross proceeds less the remaining basis in the equipment. On May 2, 2017, the Company received approximately $750,000 from Minera Indé as payment in full for the remaining balance due related to the equipment sale, including interest through that date. At December 31, 2017, no amounts were due to the Company related to the mining equipment sale to Minera Indé. Administrative Services: Beginning in August 2016, the Company began providing limited accounting and other administrative services to Minera Indé, an indirect subsidiary of Sentient. The services are provided locally in Mexico by the administrative staff at the Company’s Velardeña Properties. The Company charges Minera Indé $15,000 per month for the services, which provides reimbursement to the Company for its costs incurred plus a small profit margin. Amounts received under the arrangement reduce costs incurred for the care and maintenance of the Velardeña Properties and allows the Company to maintain a larger more experienced staff at the Velardeña Properties to support the oxide plant lease and potential future mining or processing activities. The Company’s Board of Directors and Audit Committee approved the agreement. For the year ended December 31, 2017 and the period ended December 31, 2016 the Company charged Minera Indé approximately $180,000 and $83,000, respectively for services, offsetting costs that are recorded in “ Velardeña shutdown and care and maintenance ” in the Consolidated Statements of Operations and Comprehensive Loss. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Event. | |
Subsequent Event | 24. In August 2016, the Company, through its wholly owned Mexican subsidiary, entered into an earn-in agreement with a 100% owned Mexican subsidiary of Electrum related to the Company’s Celaya exploration property in Mexico. (See Note 8 for further details on the terms of the earn-in agreement.) In February 2018, the Company and Electrum amended the Celaya earn-in agreement to permit Electrum to earn, at its option, an additional 20% interest in the Celaya project in exchange for a $1.0 million payment. Electrum can now increase its total interest in the project to 80% by contributing 100% of the $2.5 million of expenditures required in the second three-year earn-in period as specified under the earn-in agreement. The Company will recognize a gain of $1.0 million from the amendment in the first quarter 2018. |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies | |
Basis of accounting | The Company’s consolidated financial statements have been prepared in accordance with U.S. GAAP. The preparation of the Company’s consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and related disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The more significant areas requiring the use of management estimates and assumptions relate to mineralized material and related future metals prices that are the basis for future cash flow estimates utilized in impairment calculations and units-of-production depreciation, depletion and amortization calculations; environmental reclamation and closure obligations; estimates of recoverable metals in stockpiles; valuation allowances for deferred tax assets and the fair value of financial instruments. The Company based its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ significantly from these estimates under different assumptions or conditions. |
Basis of consolidation | a. All of the Company’s consolidated subsidiaries are 100% owned and as such the Company does not have a noncontrolling interest in any of its subsidiaries. All intercompany transactions and balances have been eliminated at consolidation. |
Translation of foreign currencies | b. Substantially all expenditures and sales are made in U.S. dollars. Accordingly, the Company and its subsidiaries use the U.S. dollar as their functional and reporting currency. |
Cash and cash equivalents | c. The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. |
Inventories | d. Materials and supplies inventories are valued at the lower of average cost or net realizable value. Cost includes applicable taxes and freight. The Company routinely counts and evaluates its material and supplies to determine the existence of any obsolete stock that is subject to impairment. |
Mining properties, exploration and development costs | e. The Company expenses general prospecting costs and the costs of acquiring and exploring unevaluated mineral properties. When a mineral property is determined to have proven and probable reserves, subsequent development costs are capitalized to mineral properties. For acquired mineral properties with proven and probable reserves, the Company capitalizes acquisition costs and subsequent development costs. When mineral properties are developed and operations commence, capitalized costs are charged to operations using the units-of-production method over proven and probable reserves. Upon abandonment or sale of a mineral property, all capitalized costs relating to the specific property are written off in the period abandoned or sold and a gain or loss is recognized in the accompanying Consolidated Statements of Operations and Comprehensive Loss. As discussed in Note 1, the Company is considered an exploration stage company under the criteria set forth by the SEC since it has not yet demonstrated the existence of proven or probable reserves at the Velardeña Properties, or any of the Company’s other properties. As such, the Company expenses costs as incurred related to any extraction of mineralized material at its Velardeña Properties. The Company established a cost basis for the mineralized material at the Velardeña Properties as a result of purchase accounting for the Company’s business combination transaction with ECU Silver Mining Inc. (“ECU”) in September 2011, the transaction pursuant to which the Company acquired the Velardeña Properties. Mineral properties acquired in the ECU merger were recorded at estimated fair market value based on valuations performed with the assistance of an independent appraisal firm and a minerals engineering company. Although the Company has not demonstrated the existence of proven and probable reserves, and the Company has not completed a pre-feasibility economic assessment, the Company had established the existence of mineralized material that was used in assigning value to mineral properties for purchase accounting purposes. The subsequent extraction of this mineralized material has provided a reasonable basis for the calculation of units-of-production depreciation for the cost basis in the mineral properties. On a quarterly basis the Company evaluates its exploration properties to determine if they meet the Company’s minimum requirements for continued evaluation. The rights to the properties that do not meet the minimum requirements are relinquished and the carrying values, if any, are written off and reflected in “Other operating income, net” on the accompanying Consolidated Statements of Operations and Comprehensive Loss. |
Property, plant and equipment and long lived asset impairment | f. Buildings are depreciated using the straight–line method over the estimated useful lives of 30 to 40 years or the life of the mine whichever is shorter. Mining equipment and machinery, excluding the plant, are depreciated using the straight-line method over useful lives of three to eight years or the lease period, whichever is shorter. Mineral properties and the plant are depreciated using units of production based on estimated mineralized material. Other furniture and equipment are depreciated using the straight-line method over estimated useful lives of three to five years. As discussed above, the Company does not have any properties with proven or probable reserves including the Velardeña Properties. Property, plant and equipment are recorded at cost and per the guidance of ASC 360 the Company assesses the recoverability of its property, plant and equipment, including goodwill, whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. If the sum of estimated future net cash flows on an undiscounted basis is less than the carrying amount of the related asset, impairment is considered to exist. The related impairment loss is measured by comparing estimated future net cash flows on a discounted basis or by comparing other market indicators to the carrying amount of the asset. The Company evaluated its remaining long lived assets at December 31, 2016 and 2017, and determined that no impairment was required. |
Asset Retirement Obligations | g. The Company records asset retirement obligations (“ARO”) in accordance with ASC 410, “Asset Retirement and Environmental Obligations” (“ASC 410”), which establishes a uniform methodology for accounting for estimated reclamation and abandonment costs. According to ASC 410, the fair value of an ARO is recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. An offsetting asset retirement cost (“ARC”) is capitalized as part of the carrying value of the assets with which it is associated, and depreciated over the useful life of the asset (see Note 11). The Company prepares estimates of the timing and amount of expected cash flows when an ARO is incurred. The fair value of the ARO is measured by discounting the expected cash flows using a discount rate that reflects the credit adjusted risk-free rate of interest. The Company records the fair value of an ARO when it is incurred and layer adjustments of the ARO are recorded as an adjustment to the corresponding ARC. The ARO is adjusted to reflect the passage of time (accretion cost) calculated by applying the discount rate implicit in the initial fair value measurement to the beginning-of-period carrying amount of the ARO. The Company records accretion costs to expense as incurred. |
Revenue Recognition | h. The Company recognizes oxide plant lease fees and reimbursements for labor, utility and other costs as "Revenue from Oxide plant lease" in the Consolidated Statements of Operations and Comprehensive Loss following the guidance of ASC 605 regarding "income statement characterization of reimbursements received for "out-of-pocket" expenses incurred" and "reporting revenue gross as a principal versus net as an agent". ASC 605 supports recording as gross revenue fees received for the reimbursement of expenses in situations where the recipient is the primary obligor and has certain discretion in the incurrence of the reimbursable expense. The actual costs incurred for the reimbursed labor, utility and other costs are reported as "Oxide plant lease costs" in the Consolidated Statement of Operations and Comprehensive Loss. The Company recognizes lease fees during the period as fees are earned per the terms of the lease (see Note 16). |
Stock compensation | i Stock based compensation costs are recognized per the guidance of ASC 718, “Compensation — Stock Compensation” (“ASC 718”), using a graded vesting attribution method whereby costs are recognized over the requisite service period for each separately vesting portion of the award (see Note 15). Stock grants are valued at their grant date at fair value which in the case of options requires the use of the Black-Scholes option pricing model. Per ASC 718 the grants may be classified as equity grants or liability grants depending on the terms of the grant. |
Net income (loss) per Share of Common Stock | j. Basic income (loss) per share is computed by dividing net income (loss) available to holders of the Company’s Common Stock by the weighted average number of shares of Common Stock outstanding for the period. Diluted income (loss) per share reflects the potential dilution that would occur if securities or other contracts to issue Common Stock were exercised or converted into Common Stock. At December 31, 2017 and 2016, all potentially dilutive shares were excluded from the computation of diluted earnings per share because to include them would have been anti-dilutive. |
Comprehensive Income (Loss) | k. Comprehensive income (loss) is defined as all changes in equity (deficit), exclusive of transactions with stockholders, such as capital investments. Comprehensive income (loss) includes net income (loss) and changes in certain assets and liabilities that are reported directly in equity. For the years ended December 31, 2017 and 2016 Comprehensive loss included the change in the market value of available for sale securities and is reported on the Consolidated Statements of Operations and Comprehensive Income (Loss). |
Income Taxes | l. The Company accounts for income taxes in accordance with the provisions of ASC 740, “Income Taxes” (“ASC 740”), on a tax jurisdictional basis. The Company files United States and certain other foreign country income tax returns, and pays taxes reasonably determined to be due. The tax rules and regulations in these countries are highly complex and subject to interpretation. The Company’s income tax returns are subject to examination by the relevant taxing authorities and in connection with such examinations, disputes can arise with the taxing authorities over the interpretation or application of certain tax rules within the country involved. In accordance with ASC 740, the Company identifies and evaluates uncertain tax positions, and recognizes the impact of uncertain tax positions for which there is a less than more-likely-than-not probability of the position being upheld when reviewed by the relevant taxing authority. Such positions are deemed to be unrecognized tax benefits and a corresponding liability is established on the balance sheet. The Company classifies income tax related interest and penalties as income tax expense. |
Recently adopted and issued standards | m. In July 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-11, “ Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part 1) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Non public Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception” (“ASU 2017-11”). Part I relates to the accounting for certain financial instruments with down round features in Subtopic 815-40, which is considered in determining whether an equity-linked financial instrument qualifies for a scope exception from derivative accounting. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced based on the pricing of future equity offerings. An entity still is required to determine whether instruments would be classified as equity under the guidance in Subtopic 815-40 in determining whether they qualify for that scope exception. If they do qualify, freestanding instruments with down round features are no longer classified as liabilities. ASU 2017-11 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. Early adoption is permitted, including in an interim period. The Company early adopted ASU 2017-11 during the interim period ended September 30, 2017 (see Note 3). In March 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-09, “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”), which simplifies several aspects of the accounting for share-based payment award transactions including accounting for income taxes and classification of excess tax benefits on the statement of cash flows, forfeitures and minimum statutory tax withholding requirements. For the Company, ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The adoption of ASU 2016-09 in 2017 did not materially change the Company’s previous accounting methods and therefore did not have a material impact on the Company’s consolidated financial position or results of operation. In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes: Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). ASU 2015-17 requires that deferred tax assets and liabilities be classified as noncurrent on the balance sheet. This update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. The adoption of ASU 2015-17 in 2017 did not materially change the Company’s previous accounting methods and therefore did not have a material impact on the Company’s consolidated financial position or results of operation. In July 2015, the FASB issued ASU No. 2015-11, “Inventory, Simplifying the Measurement of Inventory” (“ASU 2015‑11”). ASU 2015-11 affects reporting entities that measure inventory using first-in, first-out or average cost. ASU 2015‑11 requires that inventory be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 is effective for annual periods beginning after December 15, 2016. The adoption of ASU 2015-11 in 2017 did not materially change the Company’s previous accounting methods and therefore did not have a material impact on the Company’s consolidated financial position or results of operation. On August 27, 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014‑15”). ASU 2014-15 will require management to evaluate whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the financial statements are issued on both an interim and annual basis. Management is required to provide certain footnote disclosures if it concludes that substantial doubt exists or when its plans alleviate substantial doubt about the Company’s ability to continue as a going concern. The Company adopted ASU 2014-15 in 2016 and has since included disclosures in its financial statements consistent with the pronouncement. n. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 modifies the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in the more timely recognition of losses. ASU 2016-13 will be effective for the Company as of January 1, 2020. As the Company’s principle credit risk is related to its Lease Receivables the Company does not expect the adoption of this update to result in a material impact on its consolidated financial position or results of operations. In March 2016, the FASB issued ASU 2016-08, “ Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” (“ASU 2016-08”), which clarifies principal versus agent when another party, along with the entity, is involved in providing a good or service to a customer. Topic 606, Revenue from Contracts with Customers, requires an entity to determine whether the nature of its promise is to provide that good or service to the customer (i.e., the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (i.e., the entity is an agent). For the Company, ASU 2016-08 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is not permitted. As the Company’s current accounting practices per the guidance of ASC 605 are comparable to the requirements of ASU 2016-08, the Company does not expect the adoption of this update to result in a material impact on its consolidated financial position or results of operations or the requirement for retrospective reporting. In February 2016, the FASB issued ASU 2016-02, “Leases” (“ASU 2016-02”), which will require lessees to recognize a right-of-use asset and a lease liability for all leases with terms greater than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. For a lessor, the accounting applied is largely unchanged from previous guidance. The new rules will be effective for the Company in the first quarter of 2019. The Company does not anticipate early adoption. The Company currently leases administrative offices in the U.S. and in several foreign locations under lease agreements that typically exceed one year. Depending on the number of years remaining under such lease agreements the right-of-use assets and lease liabilities that the Company would record under ASU 2016-2 could be material. In January 2016, the FASB issued ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”) which amended its standards related to the accounting of certain financial instruments. This amendment addresses certain aspects of recognition, measurement, presentation and disclosure. The new rules will become effective for annual and interim periods beginning after December 15, 2017. Early adoption is not permitted. The Company does not expect the adoption of ASU 2016-01 to materially change its current accounting methods and therefore the Company does not expect the adoption to have a material impact on its consolidated financial position or results of operations. In May 2014, FASB and the International Accounting Standards Board issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. In addition, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing and uncertainty of revenue that is recognized and the related cash flows. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017; early adoption is not permitted. ASU 2014-09 was originally effective December 15, 2016 but ASU 2015-14 deferred the effective date by one year. As the Company’s current accounting practices per the guidance of ASU 2014-09 are comparable to the requirements of ASU 2014-09, the Company does not expect the adoption of this update to result in a material impact on its consolidated financial position or results of operations |
Change in Accounting Principle
Change in Accounting Principle (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Change in Accounting Principle | |
Schedule of cumulative effect of the change in accounting principle | Reported after As Previously Cumulative the Effect of a Change in Reported Effect Adjustment Accounting Principle Balance Sheet Accounts Impacted by December 31, at the Beginning at the Beginning September 2012 and 2014 Warrants 2016 of 2017 of 2017 (in thousands) Warrant Liability - Related Party $ 976 $ (976) $ — Warrant Liability 922 (922) — Additional Paid-in Capital 495,455 19,046 514,501 Accumulated Deficit (488,037) (17,148) (505,185) |
Cash and Cash Equivalents and33
Cash and Cash Equivalents and Short-Term Investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Cash and Cash Equivalents and Short-Term Investments | |
Schedule of short term-investments | Estimated Carrying December 31, 2017 Cost Fair Value Value (in thousands) Investments: Short-term: Available for sale common stock $ 275 $ 238 $ 238 Total available for sale 275 238 238 Total short term $ 275 $ 238 $ 238 December 31, 2016 Investments: Short-term: Available for sale common stock $ 275 $ 334 $ 334 Total available for sale 275 334 334 Total short term $ 275 $ 334 $ 334 |
Prepaid Expenses and Other As34
Prepaid Expenses and Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Prepaid Expenses and Other Assets | |
Schedule of prepaid expenses and other current assets | December 31, December 31, 2017 2016 (in thousands) Prepaid insurance $ 362 $ 296 Deferred offering costs 137 153 Recoupable deposits and other 246 129 $ 745 $ 578 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventories | |
Schedule of inventories at the Velardena Properties | December 31, December 31, 2017 2016 (in thousands) Material and supplies $ 242 $ $ 242 $ 245 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment | |
Schedule of components of property, plant and equipment | December 31, December 31, 2017 2016 (in thousands) Mineral properties $ 9,352 $ 9,352 Exploration properties 2,518 2,518 Royalty properties 200 200 Buildings 4,246 4,386 Mining equipment and machinery 15,989 16,351 Other furniture and equipment 958 952 Asset retirement cost 865 992 34,128 34,751 Less: Accumulated depreciation and amortization (25,988) (25,516) $ 8,140 $ 9,235 |
Accounts Payable and Other Ac37
Accounts Payable and Other Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounts Payable and Other Accrued Liabilities | |
Schedule of accounts payable and other accrued liabilities | December 31, December 31, 2017 2016 (in thousands) Accounts payable and accruals $ 310 $ 344 Accrued employee compensation and benefits 1,246 880 $ 1,556 $ 1,224 |
Asset Retirement Obligation a38
Asset Retirement Obligation and Reclamation Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Asset Retirement Obligation and Reclamation Liabilities | |
Summary of activity in the Velardena Properties ARO | Year Ended December 31, 2017 2016 (in thousands) Beginning balance $ 2,380 $ 2,480 Changes in estimates, and other (128) (293) Accretion expense 196 193 Ending balance $ 2,448 $ 2,380 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurements | |
Schedule of financial assets and liabilities at fair value by respective level of the fair value hierarchy | Level 1 Level 2 Level 3 Total (in thousands) At December 31, 2017 Assets: Cash and cash equivalents $ 3,250 $ — $ — $ 3,250 Trade accounts receivable 314 — — 314 Short-term investments 238 — — 238 $ 3,802 $ — $ — $ 3,802 At December 31, 2016 Assets: Cash and cash equivalents $ 2,588 $ — $ — $ 2,588 Trade accounts receivable 380 — — 380 Trade accounts receivable - related party 643 — — 643 Short-term investments 334 — — 334 $ 3,945 $ — $ — $ 3,945 Liabilities: Warrant liability - related party $ — $ — $ 976 $ 976 Warrant liability — — 922 922 $ — $ — $ 1,898 $ 1,898 |
Schedule of significant inputs to the valuation model | December 31, 2016 Company's ending stock price $ 0.58 Company's stock volatility Applicable risk free interest rate |
Summary of change in fair value of the warrant liability | Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Warrant Liabilities (in thousands) Ending balance at December 31, 2015 $ 1,898 Change in estimated fair value (364) Ending balance at December 31, 2016 $ 1,534 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
Schedule of the provision for income taxes | For the Year Ended December 31, 2017 2016 CURRENT TAXES: (in thousands) United States $ — $ — Other Countries 13 — $ 13 $ — DEFERRED TAXES: United States $ — $ — Other Countries — — Total income tax provision $ 13 $ — |
Schedule of income (loss) from operations before income taxes by country | For the Year Ended December 31, 2017 2016 (in thousands) United States $ (7,197) $ (11,732) Other Countries 3,318 1,073 $ (3,879) $ (10,659) |
Summary of reconciliation of the provision for income taxes computed at the statutory rate to the provision for income taxes | For Year Ended December 31, 2017 2016 (in thousands) Tax expense (benefit) at US rate of 35% $ (1,319) $ (3,624) Other adjustments: Rate differential of other jurisdictions (70) (98) Effects of foreign earnings 310 (786) Change in valuation allowance 33,975 (4,690) Provision to tax return true-ups (33,720) 209 Exchange rate changes on deferred tax assets (8,444) 8,802 Effect of a change in tax rates 11,516 (1,177) Debt extinguishment loss — 550 Warrant liability loss — 838 Tax loss on sale of subsidiary (1,693) — Inflation adjustment on net operating losses (2,491) — Expired net operating losses 1,931 — Other 18 (24) Income tax provision $ 13 $ — |
Schedule of components of the deferred tax assets and deferred tax liabilities | For the year ended December 31, 2017 2016 (in thousands) Deferred tax assets: Net operating loss carryforwards $ 131,866 $ 96,038 Stock-based compensation 517 1,435 Property, plant and equipment 4,307 7,545 Other 3,274 1,016 139,964 106,034 Less: Valuation allowance (139,795) (105,820) Total deferred tax assets 169 214 Deferred tax liabilities: Property, plant and equipment (169) (195) Other — (19) Total deferred tax liabilities (169) (214) Net deferred tax asset (liability) $ — $ — |
Schedule of reconciliation of the beginning and ending amount of gross unrecognized tax benefits | The Year Ended December 31, 2017 2016 (in thousands) Gross unrecognized tax benefits at beginning of period $ 740 $ 937 Increases for tax positions taken during prior years — — Decreases relating to settlements with taxing authorities — — Reductions due to lapse of statute of limitations (154) (197) Gross unrecognized tax benefits at end of period $ 586 $ 740 |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity | |
Schedule of status of the restricted stock grants issued under the Equity Plan | The Year Ended December 31, 2017 2016 Weighted Weighted Average Grant Average Date Fair Grant Date Number of Value Per Number of Fair Value Restricted Stock Grants Shares Share Shares Per Share Outstanding at beginning of period 100,000 $ 0.63 84,170 $ 0.46 Granted during the period 200,000 0.53 100,000 0.63 Restrictions lifted during the period (96,666) 0.60 (84,170) 0.46 Forfeited during the period — — — — Outstanding at end of period 203,334 $ 0.55 100,000 $ 0.63 |
Schedule of status of the stock option grants issued under the Equity Plan | The Year Ended December 31, 2017 2016 Weighted Weighted Average Average Exercise Exercise Number of Price Per Number of Price Per Equity Plan Options Shares Share Shares Share Outstanding at beginning of period 95,810 $ 8.02 245,810 $ 3.47 Granted during the period — — — — Forfeited or expired during period (55,500) 8.00 (150,000) 0.56 Exercised during period — — — — Outstanding at end of period 40,310 $ 8.05 95,810 $ 8.02 Exercisable at end of period 40,310 $ 8.05 95,810 $ 8.02 Granted and vested 40,310 $ 8.05 95,810 $ 8.02 |
Schedule of restricted stock units | The Year Ended December 31, 2017 2016 Weighted Weighted Average Grant Average Date Fair Grant Date Number of Value Per Number of Fair Value Restricted Stock Units Shares Share Shares Per Share Outstanding at December 31, 2016 1,607,317 $ 1.28 1,245,285 $ 1.66 Granted during the period 280,000 0.48 530,000 0.42 Restrictions lifted during the period — — (167,968) 1.40 Forfeited during the period — — — — Outstanding at December 31, 2017 1,887,317 $ 1.16 1,607,317 $ 1.28 |
Summary of the status of the Company's common stock warrants | The Year Ended December 31, 2017 2016 Weighted Weighted Number of Average Exercise Number of Average Exercise Underlying Price Per Underlying Price Per Common Stock Warrants Shares Share Shares Share Outstanding at December 31, 2016 17,578,950 $ 2.17 8,777,409 $ 3.96 Granted during period — — 6,000,000 0.75 Dilution adjustment 157,302 2,801,541 — Expired during period (6,258,080) 4.62 — — Exercised during period — — — Outstanding at December 31, 2017 11,478,172 $ 0.81 17,578,950 $ 2.17 |
Cash Flow Information (Tables)
Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Cash flow information | |
Schedule of reconciliation of net loss for the period to cash used in operations | Year Ended December 31, 2017 2016 (in thousands) Cash flows from operating activities: Net loss $ (3,892) $ (10,659) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 952 1,548 Accretion of asset retirement obligation 196 193 Write off of loss contingency, net — (212) Asset write off — 24 Gain on reduction of asset retirement obligation (56) — Gain on sale of assets (608) (1,791) Amortization of deferred loan costs — 57 Warrant liability fair market adjustment — 1,688 Derivative liability fair market adjustment — 778 Accretion of loan discount — 372 Loss on debt extinguishment — 1,653 Stock compensation 296 593 Changes in operating assets and liabilities: Decrease in trade accounts receivable 683 166 Increase in prepaid expenses and other assets (142) (152) Decrease in inventories 3 85 (Increase) decrease in value added tax recoverable, net (149) 346 Increase in accrued interest payable net of amounts capitalized — 85 Increase (decrease) in deferred revenue 892 (500) Decrease in reclamation liability (8) (11) Increase (decrease) in accounts payable and accrued liabilities 226 (450) Decrease in deferred leasehold payments (23) (18) Net cash used in operating activities $ (1,630) $ (6,205) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies | |
Schedule of non-cancellable operating lease commitments | 2018 2019 2020 2021 2022 Thereafter El Quevar mining concessions (estimated) $ 93 $ 93 $ 93 $ 93 $ 93 $ — Velardeña mining concessions (estimated) $ 70 $ 70 $ 70 $ 70 $ 70 $ — Office space $ 293 $ 274 $ — $ — $ — $ — |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Information | |
Schedule of financial information relating to segments | Exploration, El Quevar, Costs Depreciation, Velardeña and Applicable Depletion and Administrative Pre-Tax Capital The Year ended December 31, 2017 Revenue to Sales Amortization Expense (Income)/Loss Total Assets Expenditures (in thousands) Velardeña Properties $ 6,691 $ 2,189 $ 584 $ 2,089 $ (3,330) $ 6,406 $ 79 Corporate, Exploration & Other — — 368 6,925 7,209 6,671 2 $ 6,691 $ 2,189 $ 952 $ 9,014 $ 3,879 $ 13,077 $ 81 The Year ended December 31, 2016 Velardeña Properties $ 6,400 $ 2,046 $ 1,116 $ 2,544 $ (2,167) $ 7,821 $ 35 Corporate, Exploration & Other — — 432 7,588 12,826 6,187 15 $ 6,400 $ 2,046 $ 1,548 $ 10,132 $ 10,659 $ 14,008 $ 50 |
Nature of Operations (Details)
Nature of Operations (Details) $ / shares in Units, shares in Millions, $ in Millions | Aug. 02, 2017USD ($)$ / sharesshares | Dec. 31, 2017USD ($)property | Dec. 31, 2016USD ($) |
Number of exploration properties | property | 10 | ||
Hecla | |||
Sale price (in dollars per shares) | $ / shares | $ 0.55 | ||
Volume weighted average stock price period | 30 days | ||
Velardena properties | |||
Interest acquired (as a percent) | 100.00% | ||
Quarterly holding costs expected with suspended operations | $ 0.4 | ||
Oxide Plant | |||
Proceeds from lease | $ 4.5 | $ 4.4 | |
Expected lease proceeds | $ 1 | ||
Renewal term | 2 years | ||
Gross proceeds from common stock sale | $ 1 | ||
Common stock issued (in shares) | shares | 1.8 | ||
Sale price (in dollars per shares) | $ / shares | $ 0.55 | ||
Volume weighted average stock price period | 30 days |
Summary of Significant Accoun46
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Nature of Operations | ||
Ownership percentage of subsidiaries | 100.00% | |
Impairment of Long-Lived Assets Held-for-use | $ 0 | $ 0 |
Buildings | Minimum | ||
Property, plant and equipment and long-lived asset impairment | ||
Useful life | 30 years | |
Buildings | Maximum | ||
Property, plant and equipment and long-lived asset impairment | ||
Useful life | 40 years | |
Mining equipment and machinery | Minimum | ||
Property, plant and equipment and long-lived asset impairment | ||
Useful life | 3 years | |
Mining equipment and machinery | Maximum | ||
Property, plant and equipment and long-lived asset impairment | ||
Useful life | 8 years | |
Other furniture and equipment | Minimum | ||
Property, plant and equipment and long-lived asset impairment | ||
Useful life | 3 years | |
Other furniture and equipment | Maximum | ||
Property, plant and equipment and long-lived asset impairment | ||
Useful life | 5 years |
Change in Accounting Principl47
Change in Accounting Principle (Details) - USD ($) | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Jan. 01, 2017 | |
Change in Accounting Principle | |||||
Warrant liability | $ 1,500,000 | $ 1,900,000 | |||
Warrant derivative loss (gain) | $ (400,000) | 1,688,000 | |||
Warrant liability - Related party | 976,000 | ||||
Warrant liability | 922,000 | ||||
Additional paid in capital | 495,455,000 | $ 516,284,000 | $ 514,501,000 | ||
Accumulated Deficit | (488,037,000) | $ (509,082,000) | (505,185,000) | ||
ASU 2017-11 Earnings Per Share | |||||
Change in Accounting Principle | |||||
Warrant derivative loss (gain) | $ 5,000 | 300,000 | |||
Warrant Liability | |||||
Change in Accounting Principle | |||||
Warrant derivative loss (gain) | $ (17,100,000) | ||||
Cumulative Effect Adjustment | ASU 2017-11 Earnings Per Share | |||||
Change in Accounting Principle | |||||
Warrant liability - Related party | (976,000) | ||||
Warrant liability | (922,000) | ||||
Additional paid in capital | 19,046,000 | ||||
Accumulated Deficit | $ (17,148,000) |
Cash and Cash Equivalents and48
Cash and Cash Equivalents and Short-term Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Investments: | ||
Available for sale common stock-cost | $ 275 | $ 275 |
Total available for sale | 275 | 275 |
Total short term | 275 | 275 |
Total short term | 238 | 334 |
Financial institutions minimum net worth | 1,000,000 | |
Estimated Fair Value. | ||
Investments: | ||
Available for sale common stock | 238 | 334 |
Available for sale common stock | 238 | 334 |
Total short term | 238 | 334 |
Carrying Value. | ||
Investments: | ||
Available for sale common stock | 238 | 334 |
Available for sale common stock | 238 | 334 |
Total short term | $ 238 | $ 334 |
Prepaid Expenses and Other As49
Prepaid Expenses and Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Prepaid Expenses and Other Assets | ||
Prepaid insurance | $ 362 | $ 296 |
Deferred offering costs | 137 | 153 |
Recoupable deposits and other | 246 | 129 |
Prepaid expenses and other assets | $ 745 | $ 578 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Material and supplies | $ 242 | $ 245 |
Inventories, net | 242 | 245 |
Velardena properties | ||
Inventory write down | $ 200 | $ 200 |
Value added tax receivable (Det
Value added tax receivable (Details) - USD ($) | 1 Months Ended | 12 Months Ended |
Feb. 28, 2018 | Dec. 31, 2017 | |
Mexico | ||
Value added tax receivable | $ 19,000 | |
Argentina | ||
Value added tax receivable | 100,000 | |
Proceeds from VAT refunds | $ 138,000 | 1,100,000 |
Other operating income | 1,100,000 | |
Reversed valuation allowance | $ 138,000 |
Property, Plant and Equipment52
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property, plant and equipment | ||
Property, plant and equipment, gross | $ 34,128 | $ 34,751 |
Less: Accumulated depreciation & amortization | (25,988) | (25,516) |
Property, plant and equipment, net | 8,140 | 9,235 |
Mineral properties | ||
Property, plant and equipment | ||
Property, plant and equipment, gross | 9,352 | 9,352 |
Exploration properties | ||
Property, plant and equipment | ||
Property, plant and equipment, gross | 2,518 | 2,518 |
Royalty properties | ||
Property, plant and equipment | ||
Property, plant and equipment, gross | 200 | 200 |
Buildings | ||
Property, plant and equipment | ||
Property, plant and equipment, gross | 4,246 | 4,386 |
Mining equipment and machinery | ||
Property, plant and equipment | ||
Property, plant and equipment, gross | 15,989 | 16,351 |
Other furniture and equipment | ||
Property, plant and equipment | ||
Property, plant and equipment, gross | 958 | 952 |
Asset retirement cost | ||
Property, plant and equipment | ||
Property, plant and equipment, gross | $ 865 | $ 992 |
Property, Plant and Equipment -
Property, Plant and Equipment - Disposals (Details) | May 02, 2017USD ($) | Aug. 02, 2016USD ($)shares | Feb. 28, 2018USD ($) | Mar. 31, 2017USD ($) | Aug. 31, 2016USD ($)item | Dec. 31, 2017USD ($)paymentshares | Dec. 31, 2016USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Apr. 30, 2016USD ($) |
Property, plant and equipment | |||||||||||
Gain on sale of assets | $ 608,000 | $ 1,791,000 | |||||||||
Proceeds from sale of assets | $ 762,000 | 1,167,000 | |||||||||
Related party receivable | 643,000 | ||||||||||
Golden Tag | |||||||||||
Property, plant and equipment | |||||||||||
Investment shares held (in shares) | shares | 7,500,000 | ||||||||||
Investment ownership percentage | 10.00% | ||||||||||
Velardena properties | Sale, not discontinued operations | Sale of Equipment | |||||||||||
Property, plant and equipment | |||||||||||
Number of haul trucks sold | item | 2 | ||||||||||
Number of scoop trams sold | item | 2 | ||||||||||
Sale of mining equipments | $ 185,000 | $ 687,000 | |||||||||
Net book value of disposals | 27,000 | ||||||||||
Gain on sale of assets | 660,000 | $ 105,000 | |||||||||
Proceeds from sale of assets | $ 750,000 | $ 100,000 | $ 69,000 | ||||||||
Sales price received (as a percent) | 10.00% | ||||||||||
Related party receivable | $ 618,000 | ||||||||||
Interest rate on receivable (as a percent) | 10.00% | 10.00% | |||||||||
San Diego | Sale, not discontinued operations | |||||||||||
Property, plant and equipment | |||||||||||
Net book value of disposals | $ 0 | ||||||||||
Gain on sale of assets | 500,000 | ||||||||||
Proceeds from sale of assets | $ 379,000 | ||||||||||
Ownership in property (as a percent) | 50.00% | ||||||||||
Shares received | shares | 2,500,000 | ||||||||||
Net smelter return royalty (as a percent) | 2.00% | ||||||||||
San Diego | Golden Tag | |||||||||||
Property, plant and equipment | |||||||||||
Ownership in property (as a percent) | 50.00% | ||||||||||
Celaya | |||||||||||
Property, plant and equipment | |||||||||||
Gain on sale of assets | 200,000 | ||||||||||
Proceeds from sale of assets | $ 200,000 | ||||||||||
Exploration expenditures in first three year of the agreement | $ 2,500,000 | ||||||||||
Initial term of agreement | 3 years | ||||||||||
Ownership interest in joint venture prior to amendment | 40.00% | ||||||||||
Term of second agreement | 3 years | ||||||||||
Exploration expenditures in second three year of the agreement | $ 2,500,000 | ||||||||||
Celaya | Minimum | |||||||||||
Property, plant and equipment | |||||||||||
Earn-in to be received | $ 500,000 | ||||||||||
Celaya | Electrum | |||||||||||
Property, plant and equipment | |||||||||||
Investment ownership percentage | 100.00% | ||||||||||
Interest in joint venture (as a percent) | 60.00% | ||||||||||
Celaya | Subsequent Event | |||||||||||
Property, plant and equipment | |||||||||||
Gain on sale of assets | $ 1,000,000 | ||||||||||
Exploration expenditures in second three year of the agreement | $ 2,500,000 | ||||||||||
Additional interest in joint venture (as a percent) | 20.00% | ||||||||||
Payment to acquire additional interest in joint venture | $ 1,000,000 | ||||||||||
Contribution from additional expenditures required in the second three-year earn-in period (as a percent) | 100.00% | ||||||||||
Right to maintain participating interest (as a percent) | 20.00% | ||||||||||
Net profit interest | 10.00% | ||||||||||
Celaya | Subsequent Event | Maximum | |||||||||||
Property, plant and equipment | |||||||||||
Interest in joint venture (as a percent) | 80.00% | ||||||||||
Zacatecas | Sale, not discontinued operations | |||||||||||
Property, plant and equipment | |||||||||||
Gain on sale of assets | 500,000 | $ 400,000 | |||||||||
Proceeds from sale of assets | $ 900,000 | ||||||||||
Total consideration | $ 1,500,000 | ||||||||||
Number of additional payments | payment | 3 | ||||||||||
Receivable from sale | $ 500,000 | ||||||||||
Zacatecas | Forecast | Sale, not discontinued operations | |||||||||||
Property, plant and equipment | |||||||||||
Payment to be received | $ 225,000 | $ 225,000 | $ 225,000 |
Accounts Payable and Other Ac54
Accounts Payable and Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts payable and accruals | $ 310 | $ 344 |
Accrued employee compensation and benefits | 1,246 | 880 |
Accounts payable and other accrued liabilities | 1,556 | 1,224 |
Accrued vacation | 200 | 200 |
Withholding taxes and benefits payable | 600 | 400 |
KELTIP | ||
Withholding taxes and benefits payable | 400 | 300 |
Velardena properties | ||
Accounts payable and accruals | 100 | 100 |
Withholding taxes and benefits payable | 300 | 200 |
Corporate, Exploration & Other | ||
Accounts payable and accruals | $ 200 | $ 200 |
Convertible Note Payable - Re55
Convertible Note Payable - Related Party, Net (Details) | Jun. 10, 2016USD ($)item$ / sharesshares | Feb. 11, 2016USD ($)item$ / sharesshares | Jan. 31, 2016item$ / shares | Oct. 31, 2015USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2017USD ($) | Oct. 27, 2015USD ($) |
Loss on debt extinguishment | $ (1,653,000) | |||||||
Derivative income (loss) | (778,000) | |||||||
Sentient Loan | ||||||||
Principal amount of loan | $ 5,000,000 | |||||||
Amount of accrued interest converted to equity | $ 34,000 | $ 100,000 | ||||||
Stock price trigger (as a percent) | 90.00% | 90.00% | ||||||
Consecutive trading days, period | item | 15 | 15 | ||||||
Interest rate (as a percent) | 9.00% | |||||||
Amount of debt converted to equity | $ 1,100,000 | $ 3,900,000 | ||||||
Equity shares issued upon conversion of debt | shares | 4,011,740 | 23,355,000 | ||||||
Exercise price per share of shares converted from debt | $ / shares | $ 0.289 | $ 0.172 | ||||||
Fair value of imbedded derivative | $ 1,100,000 | |||||||
Debt issuance costs | $ 300,000 | |||||||
Loss on debt extinguishment | $ 1,700,000 | |||||||
Derivative income (loss) | (800,000) | (800,000) | ||||||
Debt outstanding | $ 0 | $ 0 | $ 0 | |||||
Sentient Loan | Period Preceding Loan Closure Date | ||||||||
Stock price trigger (in dollars per share) | $ / shares | $ 0.289 | |||||||
Stock price trigger (as a percent) | 90.00% | |||||||
Consecutive trading days, period | item | 15 | |||||||
Sentient Loan | Period Preceding Loan Conversion Date | ||||||||
Stock price trigger (as a percent) | 90.00% | |||||||
Consecutive trading days, period | item | 15 |
Asset Retirement Obligation a56
Asset Retirement Obligation and Reclamation Liabilities (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2012 | Mar. 31, 2012 | |
Asset retirement and reclamation liabilities | $ 2,434,000 | $ 2,434,000 | ||
Summary of activity in the Velardena Operations ARO | ||||
ARO, Beginning balance | 2,434,000 | |||
Accretion expense | 196,000 | 193,000 | ||
ARO, Ending balance | 2,495,000 | 2,434,000 | ||
Velardena properties | ||||
Asset retirement and reclamation liabilities | 2,380,000 | 2,480,000 | $ 1,900,000 | $ 3,500,000 |
Amortization expense related to the ARC | 4,000 | |||
Summary of activity in the Velardena Operations ARO | ||||
ARO, Beginning balance | 2,380,000 | 2,480,000 | ||
Changes in estimates, and other | (128,000) | (293,000) | ||
Accretion expense | 196,000 | 193,000 | ||
ARO, Ending balance | 2,448,000 | 2,380,000 | ||
El Quevar Project | ||||
ARO arising in the period | $ 50,000 | $ 50,000 |
Other Liabilities (Details)
Other Liabilities (Details) - USD ($) $ in Thousands | 4 Months Ended | |||
Apr. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | |
Other current liabilities | $ 9 | $ 24 | ||
Interest and penalties accrued | $ 0 | $ 0 | ||
Argentine tax authority | ||||
Interest and penalties accrued | $ 200 | |||
Income taxes paid | $ 200 | |||
Tax (settlement) payable | $ (200) |
Fair value measurements (Detail
Fair value measurements (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2017 | |
Fair value measurements | ||
Warrant liability - related party | $ 976 | |
Recurring | ||
Fair value measurements | ||
Cash and cash equivalents | 2,588 | $ 3,250 |
Trade accounts receivable | 314 | |
Trade accounts receivable | 380 | |
Trade accounts receivable - related party | 643 | |
Short-term investments | 334 | 238 |
Assets | 3,945 | 3,802 |
Warrant liability - related party | 976 | |
Warrant liability | 922 | |
Liabilities | $ 1,898 | |
Fair value Assumptions | ||
Company's ending stock price (in dollars per share) | $ 0.58 | |
Company's stock volatility (as a percent) | 110.00% | |
Applicable risk free interest rate (as a percent) | 1.39% | |
Recurring | Level 1 | ||
Fair value measurements | ||
Cash and cash equivalents | $ 2,588 | 3,250 |
Trade accounts receivable | 314 | |
Trade accounts receivable | 380 | |
Trade accounts receivable - related party | 643 | |
Short-term investments | 334 | 238 |
Assets | 3,945 | $ 3,802 |
Recurring | Level 3 | ||
Fair value measurements | ||
Warrant liability - related party | 976 | |
Warrant liability | 922 | |
Liabilities | $ 1,898 |
Fair value measurements - Level
Fair value measurements - Level 3 (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Changes in level 3 | ||
Fair value adjustments to long lived assets | $ 0 | $ 0 |
Recurring | Warrant Liability | ||
Changes in level 3 | ||
Beginning Balance | 1,534,000 | 1,898,000 |
Change in estimated fair value | (364,000) | |
Ending Balance | 1,534,000 | |
Non-recurring | ||
Changes in level 3 | ||
Fair value measurements | $ 0 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Current taxes: | |
Other Countries | $ 13 |
Total current taxes | 13 |
Income tax provision | $ 13 |
Income Taxes - Exp (Details)
Income Taxes - Exp (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income (loss) from continuing operations before income taxes | ||
United States | $ (7,197) | $ (11,732) |
Other Countries | 3,318 | 1,073 |
Loss from operations before income taxes | $ (3,879) | $ (10,659) |
Reconciliation of the provision for income taxes computed at the statutory rate to the provision for income taxes | ||
US rate (as a percent) | 35.00% | 35.00% |
Tax expense (benefit) at US rate of 35% | $ (1,319) | $ (3,624) |
Other adjustments: | ||
Rate differential of other jurisdictions | (70) | (98) |
Effects of foreign earnings | 310 | (786) |
Change in valuation allowance | 33,975 | (4,690) |
Provision to tax return true-ups | (33,720) | 209 |
Exchange rate changes on deferred tax assets | (8,444) | 8,802 |
Effect of a change in tax rates | 11,516 | (1,177) |
Debt extinguishment loss | 550 | |
Warrant liability loss | 838 | |
Tax loss on sale of subsidiary | (1,693) | |
Inflation adjustment on net operating losses | (2,491) | |
Expired net operating losses | 1,931 | |
Other | 18 | $ (24) |
Income tax provision | $ 13 |
Income Taxes - Deferred (Detail
Income Taxes - Deferred (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Deferred tax assets: | |||
Net operating loss carryforwards | $ 131,866 | $ 96,038 | |
Stock-based compensation | 517 | 1,435 | |
Property, plant and equipment | 4,307 | 7,545 | |
Other | 3,274 | 1,016 | |
Deferred tax assets, gross | 139,964 | 106,034 | |
Less: Valuation allowance | (139,795) | (105,820) | |
Total deferred tax assets | 169 | 214 | |
Deferred tax liabilities: | |||
Property, plant and equipment | (169) | (195) | |
Other | (19) | ||
Total deferred tax liabilities | (169) | (214) | |
Net deferred tax asset (liability) | $ 0 | $ 0 | |
Corporate tax rate | 35.00% | 35.00% | |
Reduction of U.S. deferred tax assets due to change in tax rate | $ (10,200) | ||
Transition tax liability | $ 0 | ||
Forecast | |||
Deferred tax liabilities: | |||
Corporate tax rate | 21.00% |
Income Taxes - NOL Carryforward
Income Taxes - NOL Carryforwards (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Operating loss carryforwards | ||
Net operating loss carryforwards | $ 484,900 | |
Valuation allowance offsetting the deferred tax assets | 139,795 | $ 105,820 |
SPAIN | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 121,100 | |
Other non-U.S. Countries | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 186,500 | |
US | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 70,800 | |
Velardena properties | Mexico | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 83,900 | |
Other Mexico activities | Mexico | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | $ 22,600 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of the beginning and ending amount of gross unrecognized tax benefits | ||
Gross unrecognized tax benefits at beginning of period | $ 740 | $ 937 |
Reductions due to lapse of statute of limitations | (154) | (197) |
Gross unrecognized tax benefits at end of period | 586 | 740 |
Interest and penalties recognized in the statement of operations | 0 | 0 |
Interest and penalties accrued recognized in the statement of financial position | $ 0 | $ 0 |
Equity - Issue and Conversion (
Equity - Issue and Conversion (Details) | Aug. 02, 2017USD ($)$ / sharesshares | Jun. 10, 2016USD ($)item$ / sharesshares | May 06, 2016USD ($)$ / sharesshares | Feb. 11, 2016USD ($)item$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)shares | May 31, 2016USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)shares | Sep. 30, 2016USD ($) | Sep. 02, 2011$ / shares |
Number of shares transferred for each shares | $ / shares | $ 0.05 | ||||||||||
Number of shares returned to treasury and canceled | shares | 125,739 | ||||||||||
Consideration shares sold to Hecla, net | $ 930,000 | ||||||||||
Common stock, shares outstanding | shares | 91,929,709 | 89,020,041 | 91,929,709 | 89,020,041 | |||||||
Proceeds from issuance of common stock, net of issuance costs | $ 1,611,000 | $ 3,599,000 | |||||||||
Hecla | |||||||||||
Agreement period | 2 years | ||||||||||
Consideration shares sold to Hecla, net | $ 1,000,000 | ||||||||||
Consideration shares sold to Hecla, net (in shares) | shares | 1,800,000 | ||||||||||
Sale price (in dollars per shares) | $ / shares | $ 0.55 | ||||||||||
Volume weighted average stock price period | 30 days | ||||||||||
Equity issue costs | 71,000 | ||||||||||
ATM Agreement | |||||||||||
Unamortized cost | $ 136,000 | $ 136,000 | |||||||||
ATM Agreement | |||||||||||
Sale price (in dollars per shares) | $ / shares | $ 0.70 | $ 0.70 | |||||||||
Equity issue costs | $ 109,000 | $ 34,000 | |||||||||
Aggregate value of securities allowed under agreement | $ 5,000,000 | $ 5,000,000 | |||||||||
Aggregate securities allowed under agreement (in shares) | shares | 10,000,000 | 10,000,000 | |||||||||
Commission rate (as a percent) | 2.00% | 2.20% | |||||||||
Legal expenses | $ 50,000 | ||||||||||
Common stock issued (in shares) | shares | 1,024,000 | ||||||||||
Gross proceeds from common stock sale | $ 720,000 | ||||||||||
Commission payment | 16,000 | ||||||||||
Amortization of deferred cost | 23,000 | ||||||||||
Proceeds from issuance of common stock, net of issuance costs | 682,000 | ||||||||||
Registered Offering | |||||||||||
Sale price (in dollars per shares) | $ / shares | $ 0.50 | $ 0.50 | |||||||||
Equity issue costs | $ 400,000 | ||||||||||
Common stock issued (in shares) | shares | 8,000,000 | 8,000,000 | |||||||||
Gross proceeds from common stock sale | $ 4,000,000 | $ 4,000,000 | |||||||||
Proceeds from issuance of common stock, net of issuance costs | $ 3,600,000 | ||||||||||
Registered Offering | 2016 Warrants | |||||||||||
Volatility (as a percent) | 105.00% | ||||||||||
Applicable risk free interest rate (as a percent) | 0.74% | ||||||||||
Warrant liability | $ 3,600,000 | ||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 0.75 | ||||||||||
Number of common shares which can be purchased with each warrant | shares | 0.75 | 0.75 | |||||||||
Warrants outstanding (in shares) | shares | 6,000,000 | 6,000,000 | |||||||||
Warrant becomes exercisable | 6 months | ||||||||||
Term of warrants | 5 years | 5 years | |||||||||
Sentient Loan | |||||||||||
Amount of debt converted to equity | $ 1,100,000 | $ 3,900,000 | |||||||||
Amount of accrued interest converted to equity | $ 34,000 | $ 100,000 | |||||||||
Equity shares issued upon conversion of debt | shares | 4,011,740 | 23,355,000 | |||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 0.289 | $ 0.172 | |||||||||
Stock price trigger (as a percent) | 90.00% | 90.00% | |||||||||
Consecutive trading days, period | item | 15 | 15 | |||||||||
Debt outstanding | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||||||
Sentient | |||||||||||
Ownership (as a percent) | 45.00% | 45.00% | 45.00% |
Equity - Non-Option Incentive (
Equity - Non-Option Incentive (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($)employee$ / sharesshares | Dec. 31, 2016USD ($)employee$ / sharesshares | |
Weighted Average Grant Date Fair Value Per Share - Non-option | ||
Compensation expense | $ | $ 296 | $ 593 |
Equity Plan | Restricted Stock | ||
Number of Shares - Non-option | ||
Outstanding at beginning of year (in shares) | 100,000 | 84,170 |
Granted during the year (in shares) | 200,000 | 100,000 |
Restrictions lifted during the year (in shares) | (96,666) | (84,170) |
Outstanding at end of year (in shares) | 203,334 | 100,000 |
Weighted Average Grant Date Fair Value Per Share - Non-option | ||
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 0.63 | $ 0.46 |
Granted during the year (in dollars per share) | $ / shares | 0.53 | 0.63 |
Restrictions lifted during the year (in dollars per share) | $ / shares | 0.60 | 0.46 |
Outstanding at end of year (in dollars per share) | $ / shares | $ 0.55 | $ 0.63 |
Number of employees | employee | 2 | 3 |
Compensation expense | $ | $ 100 | |
Additional compensation expense expected to be recognized | $ | $ 100 | |
Period for future recognition of additional compensation expense | 35 months | |
Equity Plan | Restricted Stock | Employee | ||
Number of Shares - Non-option | ||
Restrictions lifted during the year (in shares) | (46,666) | |
Weighted Average Grant Date Fair Value Per Share - Non-option | ||
Number of employees | employee | 3 | |
Equity Plan | Restricted Stock | Officers | ||
Number of Shares - Non-option | ||
Restrictions lifted during the year (in shares) | (84,170) | |
Weighted Average Grant Date Fair Value Per Share - Non-option | ||
Number of employees | employee | 2 | |
Equity Plan | Restricted Stock | New Employee | ||
Number of Shares - Non-option | ||
Granted during the year (in shares) | 150,000 | |
Restrictions lifted during the year (in shares) | (50,000) | |
Deferred Compensation Plan | Restricted Stock Units (RSUs) | ||
Number of Shares - Non-option | ||
Outstanding at beginning of year (in shares) | 1,607,317 | 1,245,285 |
Granted during the year (in shares) | 280,000 | 530,000 |
Restrictions lifted during the year (in shares) | (167,968) | |
Outstanding at end of year (in shares) | 1,887,317 | 1,607,317 |
Weighted Average Grant Date Fair Value Per Share - Non-option | ||
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 1.28 | $ 1.66 |
Granted during the year (in dollars per share) | $ / shares | 0.48 | 0.42 |
Restrictions lifted during the year (in dollars per share) | $ / shares | 1.40 | |
Outstanding at end of year (in dollars per share) | $ / shares | $ 1.16 | $ 1.28 |
Compensation expense | $ | $ 100 | $ 200 |
Period for future recognition of additional compensation expense | 6 months | |
Number of unrestricted shares Director to receive for vested RSU upon termination from board | 1 | |
Deferred Compensation Plan | Restricted Stock Units (RSUs) | Maximum | ||
Weighted Average Grant Date Fair Value Per Share - Non-option | ||
Additional compensation expense expected to be recognized | $ | $ 100 | |
KELTIP | KELTIP Units | ||
Number of Shares - Non-option | ||
Outstanding at beginning of year (in shares) | 585,000 | |
Outstanding at end of year (in shares) | 1,020,000 | 585,000 |
Weighted Average Grant Date Fair Value Per Share - Non-option | ||
Compensation expense | $ | $ 100 | $ 100 |
KELTIP | KELTIP Units | Officers | ||
Number of Shares - Non-option | ||
Granted during the year (in shares) | 435,000 | 585,000 |
Weighted Average Grant Date Fair Value Per Share - Non-option | ||
Number of employees | employee | 2 | 2 |
Compensation expense | $ | $ 200 | $ 200 |
Equity - Option Incentive (Deta
Equity - Option Incentive (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Weighted Average Exercise Price Per Share - Options | ||
Compensation expense | $ 296 | $ 593 |
Employee Stock Option | Equity Plan | ||
Number of Shares - Options | ||
Outstanding at beginning of period (in shares) | 95,810 | 245,810 |
Granted during period (in shares) | 0 | 0 |
Forfeited or expired during period (in shares) | (55,500) | (150,000) |
Outstanding at end of year (in shares) | 40,310 | 95,810 |
Exercisable at end of period (in shares) | 40,310 | 95,810 |
Granted and vested (in shares) | 40,310 | 95,810 |
Weighted Average Exercise Price Per Share - Options | ||
Outstanding at beginning of year (in dollars per share) | $ 8.02 | $ 3.47 |
Granted during period (in dollars per share) | 0 | 0 |
Forfeited or expired during year (in dollars per share) | 8 | 0.56 |
Outstanding at end of year (in dollars per share) | 8.05 | 8.02 |
Exercisable at end of period (in dollars per share) | 8.05 | 8.02 |
Granted and vested (in dollars per share) | $ 8.05 | $ 8.02 |
Equity - Warrants (Details)
Equity - Warrants (Details) - USD ($) $ / shares in Units, $ in Millions | Sep. 19, 2017 | May 06, 2016 | May 31, 2016 | Sep. 30, 2014 | Sep. 30, 2012 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2017 |
Weighted Average Exercise Price Per Share | ||||||||
Warrant liability | $ 1.9 | $ 1.5 | ||||||
Warrant | ||||||||
Number of Underlying Shares | ||||||||
Outstanding, beginning balance (in shares) | 17,578,950 | 8,777,409 | ||||||
Granted (in shares) | 6,000,000 | |||||||
Dilution adjustment (in shares) | 157,302 | 2,801,541 | ||||||
Expired (in shares) | (6,258,080) | |||||||
Outstanding, end balance (in shares) | 11,478,172 | 17,578,950 | ||||||
Weighted Average Exercise Price Per Share | ||||||||
Outstanding, beginning balance (in dollars per share) | $ 2.17 | $ 3.96 | ||||||
Granted (in dollars per share) | 0.75 | |||||||
Expired during period | 4.62 | |||||||
Outstanding, end balance (in dollars per share) | $ 0.81 | $ 2.17 | ||||||
Warrant liability | $ 1.9 | |||||||
2012 Warrants | ||||||||
Number of Underlying Shares | ||||||||
Outstanding, beginning balance (in shares) | 3,431,649 | |||||||
Dilution adjustment (in shares) | 2,826,431 | |||||||
Outstanding, end balance (in shares) | 6,258,080 | |||||||
Weighted Average Exercise Price Per Share | ||||||||
Outstanding, beginning balance (in dollars per share) | $ 8.42 | |||||||
Outstanding, end balance (in dollars per share) | $ 4.62 | |||||||
Warrant liability | 0.1 | |||||||
2014 Warrants | ||||||||
Number of Underlying Shares | ||||||||
Outstanding, beginning balance (in shares) | 4,746,000 | |||||||
Dilution adjustment (in shares) | 732,172 | |||||||
Outstanding, end balance (in shares) | 5,478,172 | |||||||
Weighted Average Exercise Price Per Share | ||||||||
Outstanding, beginning balance (in dollars per share) | $ 1.21 | |||||||
Outstanding, end balance (in dollars per share) | $ 0.87 | |||||||
Warrant liability | $ 1.8 | |||||||
Sentient | 2012 Warrants | ||||||||
Number of Underlying Shares | ||||||||
Outstanding, end balance (in shares) | 3,431,649 | |||||||
Weighted Average Exercise Price Per Share | ||||||||
Outstanding, end balance (in dollars per share) | $ 8.42 | |||||||
Term of warrants | 5 years | |||||||
Number of common shares which can be purchased with each warrant | 0.5 | |||||||
Common stock issued (in shares) | 1 | |||||||
Sentient | 2014 Warrants | ||||||||
Number of Underlying Shares | ||||||||
Outstanding, end balance (in shares) | 4,746,000 | |||||||
Weighted Average Exercise Price Per Share | ||||||||
Outstanding, end balance (in dollars per share) | $ 1.21 | |||||||
Term of warrants | 5 years | |||||||
Number of common shares which can be purchased with each warrant | 0.5 | |||||||
Common stock issued (in shares) | 1 | |||||||
Registered Offering | ||||||||
Weighted Average Exercise Price Per Share | ||||||||
Common stock issued (in shares) | 8,000,000 | 8,000,000 | ||||||
Sale price (in dollars per shares) | $ 0.50 | $ 0.50 | ||||||
Gross proceeds from common stock sale | $ 4 | $ 4 | ||||||
Registered Offering | 2016 Warrants | ||||||||
Number of Underlying Shares | ||||||||
Outstanding, end balance (in shares) | 6,000,000 | 6,000,000 | ||||||
Weighted Average Exercise Price Per Share | ||||||||
Outstanding, end balance (in dollars per share) | $ 0.75 | |||||||
Number of shares of common stock per capital unit (in shares). | 0.75 | |||||||
Term of warrants | 5 years | 5 years | ||||||
Number of common shares which can be purchased with each warrant | 0.75 | 0.75 | ||||||
Warrant becomes exercisable | 6 months |
Revenue, Deferred Revenue and69
Revenue, Deferred Revenue and Related Costs (Details) $ / shares in Units, shares in Millions | Aug. 02, 2017USD ($)item$ / sharesshares | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Oxide plant lease | $ 6,691,000 | $ 6,400,000 | |
Lease related costs | 2,189,000 | 2,046,000 | |
Oxide Plant | |||
Oxide plant lease | 6,700,000 | 6,400,000 | |
Lease related costs | 2,200,000 | $ 2,000,000 | |
Renewal term | 2 years | ||
Expected lease proceeds | $ 1,000,000 | ||
Gross proceeds from common stock sale | $ 1,000,000 | ||
Common stock issued (in shares) | shares | 1.8 | ||
Sale price (in dollars per shares) | $ / shares | $ 0.55 | ||
Volume weighted average stock price period | 30 days | ||
Termination notice period | 120 days | ||
Number of rights of first refusal | item | 1 | ||
Deferred revenue | 900,000 | ||
Legal and stock exchange issuance fees | $ 71,000 |
Interest and Other Income (Deta
Interest and Other Income (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Interest and Other Income. | |
Proceeds from value added tax refunds | $ 0.4 |
Derivative Loss (Details)
Derivative Loss (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2016 | |
Derivative loss | ||
Derivative income (loss) | $ (778) | |
Sentient Loan | ||
Derivative loss | ||
Derivative income (loss) | $ (800) | (800) |
Warrant Liability | ||
Derivative loss | ||
Derivative income (loss) | $ (1,700) |
Cash Flow Information (Details)
Cash Flow Information (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||
Net loss | $ (3,892) | $ (10,659) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 952 | 1,548 | |
Accretion of asset retirement obligation | 196 | 193 | |
Write off of loss contingency, net | (212) | ||
Asset write off | 24 | ||
Gain on reduction of asset retirement obligation | (56) | ||
Gain on sale of assets | (608) | (1,791) | |
Amortization of deferred loan costs | 57 | ||
Warrant liability fair market adjustment | $ (400) | 1,688 | |
Derivative liability fair market adjustment | 778 | ||
Accretion of loan discount | 372 | ||
Loss on debt extinguishment | 1,653 | ||
Stock compensation | 296 | 593 | |
Changes in operating assets and liabilities: | |||
Decrease in trade accounts receivable | 683 | 166 | |
Increase in prepaid expenses and other assets | (142) | (152) | |
Decrease in inventories | 3 | 85 | |
(Increase) decrease in value added tax recoverable, net | (149) | 346 | |
Increase in accrued interest payable net of amounts capitalized | 85 | ||
Increase (decrease) in deferred revenue | 892 | (500) | |
Decrease in reclamation liability | (8) | (11) | |
Increase (decrease) in accounts payable and accrued liabilities | 226 | (450) | |
Decrease in deferred leasehold payments | (23) | (18) | |
Net cash used in operating activities | $ (1,630) | $ (6,205) |
Commitments and Contingencies73
Commitments and Contingencies (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | |
Contingencies | |||
Loss contingency | $ 0 | $ 0 | |
Velardena properties | |||
Leases and Purchase Commitments | |||
2,016 | 70,000 | ||
2,017 | 70,000 | ||
2,018 | 70,000 | ||
2,020 | 70,000 | ||
2,021 | 70,000 | ||
Thereafter | 70,000 | ||
Lease payments | 69,000 | 74,000 | |
Surface right agreement with local ejido | |||
Leases and Purchase Commitments | |||
Lease payments | 25,000 | ||
El Quevar Project | |||
Leases and Purchase Commitments | |||
2,016 | 93,000 | ||
2,017 | 93,000 | ||
2,018 | 93,000 | ||
2,020 | 93,000 | ||
2,021 | 93,000 | ||
Thereafter | 93,000 | ||
Lease payments | 111,000 | 116,000 | |
Office space | |||
Leases and Purchase Commitments | |||
2,016 | 293,000 | ||
2,017 | 274,000 | ||
Lease payments | $ 226,000 | $ 224,000 | |
Reduction in space (as a percent) | 46.00% | ||
Reduction in cost (as a percent) | 44.00% |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($)segmentitem | Dec. 31, 2016USD ($) | |
Segment Information | ||
Number of reportable segments | item | 2 | |
Revenue | $ 6,691 | $ 6,400 |
Costs Applicable to Sales | 2,189 | 2,046 |
Depreciation, depletion and amortization | 952 | 1,548 |
Exploration, El Quevar, Velardena and Administrative Expense | 9,014 | 10,132 |
Pre-tax (gain) loss | 3,879 | 10,659 |
Total Assets | 13,077 | 14,008 |
Capital Expenditures | $ 81 | 50 |
Velardena properties | ||
Segment Information | ||
Number of reportable segments | segment | 1 | |
Revenue | $ 6,691 | 6,400 |
Costs Applicable to Sales | 2,189 | 2,046 |
Depreciation, depletion and amortization | 584 | 1,116 |
Exploration, El Quevar, Velardena and Administrative Expense | 2,089 | 2,544 |
Pre-tax (gain) loss | (3,330) | (2,167) |
Total Assets | 6,406 | 7,821 |
Capital Expenditures | 79 | 35 |
Corporate, Exploration & Other | ||
Segment Information | ||
Depreciation, depletion and amortization | 368 | 432 |
Exploration, El Quevar, Velardena and Administrative Expense | 6,925 | 7,588 |
Pre-tax (gain) loss | 7,209 | 12,826 |
Total Assets | 6,671 | 6,187 |
Capital Expenditures | $ 2 | $ 15 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | May 02, 2017 | Mar. 31, 2017 | Aug. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Related Party Transaction | ||||||
Common stock, shares issued | 91,929,709 | 89,020,041 | ||||
Related party receivable | $ 643,000 | |||||
Proceeds from sale of assets | $ 762,000 | 1,167,000 | ||||
Gain on sale of assets | $ 608,000 | 1,791,000 | ||||
Sentient | ||||||
Related Party Transaction | ||||||
Ownership (as a percent) | 45.00% | 45.00% | ||||
Minera Inde | ||||||
Related Party Transaction | ||||||
Monthly charges received | $ 15,000 | |||||
Received amount | $ 180,000 | 83,000 | ||||
Sale, not discontinued operations | Sale of Equipment | Minera Inde | ||||||
Related Party Transaction | ||||||
Sale of mining equipments | $ 185,000 | $ 687,000 | ||||
Sales price received (as a percent) | 10.00% | |||||
Interest rate on receivable (as a percent) | 10.00% | 10.00% | ||||
Related party receivable | $ 0 | $ 643,000 | ||||
Proceeds from sale of assets | $ 750,000 | $ 100,000 | ||||
Gain on sale of assets | $ 105,000 |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Feb. 28, 2018 | Aug. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Subsequent Events | ||||
Gain on sale of assets | $ 608 | $ 1,791 | ||
Celaya | ||||
Subsequent Events | ||||
Exploration expenditures in second three year of the agreement | $ 2,500 | |||
Term of second agreement | 3 years | |||
Gain on sale of assets | $ 200 | |||
Subsequent Event | Celaya | ||||
Subsequent Events | ||||
Additional interest in joint venture (as a percent) | 20.00% | |||
Payment to acquire additional interest in joint venture | $ 1,000 | |||
Contribution from additional expenditures required in the second three-year earn-in period (as a percent) | 100.00% | |||
Exploration expenditures in second three year of the agreement | $ 2,500 | |||
Gain on sale of assets | $ 1,000 | |||
Subsequent Event | Celaya | Maximum | ||||
Subsequent Events | ||||
Interest in joint venture (as a percent) | 80.00% | |||
Electrum | Celaya | ||||
Subsequent Events | ||||
Investment ownership percentage | 100.00% | |||
Interest in joint venture (as a percent) | 60.00% |