Annual report pursuant to Section 13 and 15(d)

Asset Retirement Obligations

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Asset Retirement Obligations
12 Months Ended
Dec. 31, 2019
Asset Retirement Obligations  
Asset Retirement Obligations

12.Asset Retirement Obligations

 

Asset retirement obligations ("ARO") for the Lost Creek Project are equal to the present value of all estimated future costs required to remediate any environmental disturbances that exist as of the end of the period, using discount rates ranging from 0.33% to 7.25%. Included in this liability are the costs of closure, reclamation, demolition and stabilization of the mine, processing plant, infrastructure, groundwater restoration and ongoing post-closure environmental monitoring and maintenance costs. At December 31, 2019, the total undiscounted amount of the future cash needs was estimated to be $18.3 million. The schedule of payments required to settle the ARO liability extends through 2033. The liability marginally changed during in the year as no new development was anticipated or performed. It is based on the estimated remediation work to be completed at Lost Creek, as approved by the Wyoming Department of Environmental Quality in 2019.

 

Asset retirement obligations for the Pathfinder properties are equal to the present value of all estimated future costs required to remediate any environmental disturbances that exist as of the end of the period, using a discount rate ranging from 1.53% to 7.25%. Included in this liability are the costs of closure, reclamation, demolition and stabilization of the mines, processing plants, infrastructure, groundwater restoration, waste dumps and ongoing post-closure environmental monitoring and maintenance costs. At December 31, 2019, the total undiscounted amount of the future cash needs was estimated to be $11.5 million. The schedule of payments required to settle the ARO liability extends through 2033.

 

The undiscounted future cash needs are based on information provided to the State of Wyoming in conjunction with annual reclamation bonding renewals.  Increases in the estimated future cash needs are normally based on increased disturbances projected for the upcoming year.

 

The restricted cash as discussed in note 6 is related to surety bonds which provide security to the related governmental agencies on these obligations.

 

 

 

 

 

 

For the period ended

 

Year ended

 

December 31, 2019

 

December 31, 2018

 

 

 

 

 

$

 

$

Beginning of period

30,384

 

27,036

Change in estimated liability

11

 

2,840

Accretion expense

577

 

508

 

 

 

 

End of period

30,972

 

30,384