Quarterly report pursuant to Section 13 or 15(d)

Asset Retirement and Reclamation Obligations

Asset Retirement and Reclamation Obligations
9 Months Ended
Sep. 30, 2014
Asset Retirement Obligation Disclosure [Abstract]  
Asset Retirement and Reclamation Obligations

15.Asset Retirement and Reclamation Obligations


Asset retirement obligations ("ARO") relate to the Lost Creek Project and Pathfinder and 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 discounted at a risk-free rate. 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.


During the third quarter, the Company completed its initial review of the ARO liability assumed on the Pathfinder properties purchased in December 2013 in order to update its bonding requirements with the WDEQ.  Previously, the ARO reflected by Pathfinder was the amount shown in its financial statements as calculated by the prior ownership.  The result was an increase of $5.7 million in the ARO liability for Pathfinder.


At September 30, 2014, the total undiscounted amount of the future cash needs was estimated to be $24.8 million. The schedule of payments required to settle the ARO liability extends through 2033.


The restricted cash as discussed in note 7 is related to the surety bonds and letters of credit which provide security to the related governmental agencies on these obligations.








Nine months ended


Year ended


September 30, 2014


December 31, 2013









Beginning of year




Liabilities incurred




Assumed in Pathfinder Mines Corporation purchase




Change in estimated liability




Accretion expense








End of period