Annual report pursuant to Section 13 and 15(d)

Asset Retirement Obligations

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Asset Retirement Obligations
12 Months Ended
Dec. 31, 2016
Asset Retirement Obligations [Abstract]  
Asset Retirement and Reclamation Obligations

13.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 0.1% to 3.2%.  Included in this liability are the costs of closure, reclamation, demolition and stabilization of the mine, processing plant, infrastructure, aquifer restoration, waste dumps and ongoing post-closure environmental monitoring and maintenance costs. At December 31, 2016, the total undiscounted amount of the future cash needs was estimated to be $15.0 million. The schedule of payments required to settle the ARO liability extends through 2033.

 

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 discount rates of 2.16% to 3.0%.  Included in this liability are the costs of closure, reclamation, demolition and stabilization of the mines, processing plants, infrastructure, aquifer restoration, waste dumps and ongoing post-closure environmental monitoring and maintenance costs. At December 31, 2016, 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.  In 2016, there was a small increase in the estimated liability on the Lost Creek Project.

 

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

 

 

 

 

 

 

For the year ended

 

Year ended

 

December 31, 2016

 

December 31, 2015

 

 

 

 

 

$

 

$

Beginning of year

26,061

 

23,445

Change in estimated liability

(534)

 

2,101

Accretion expense

534

 

515

 

 

 

 

End of year

26,061

 

26,061