SUBSEQUENT EVENT

3 Months Ended

Mar. 31, 2018

SUBSEQUENT EVENT

SUBSEQUENT EVENT

12.  During July 2015, TMC began development of a granite mining property south of Colorado Springs. These costs included drilling the property to ascertain its suitability for mining, engineering studies and legal expenses related to the preparation of TMC’s application to obtain the required mining permits from the State of Colorado and El Paso County.

TMC made its initial application for a permit from the state in 2016. The state’s Reclamation Mining and Safety Division (DRMS) of the Colorado Department of Natural Resources rejected issuing the permit by a 3 to 2 vote with one recusal and one absent for the vote. The DRMS invited TMC to resubmit its request to address the concerns raised during the 2016 hearing. TMC filed its second application to the state in November 2017 addressing the issues cited during the first hearing. The Colorado Department of Natural Resources staff reviewed the mining application and recommended that the mining plan be approved as submitted. On April 26, 2018 despite the staff recommendation to approve the application, the head of the Department of Natural Resources, who has a seat on the DRMS Committee, voted against the permit. The permit was rejected 3 to 2 with two members recusing themselves.

Although written notification of the final decision has not yet been received, the Company has written off all capitalized costs associated with the permit application in the first quarter of 2018. As of December 30, 2017 the Company had capitalized $5,430,000 of deferred development which was included in Property, plant and equipment on the consolidated balance sheet. As of March 31, 2018, TMC had invested $6,308,000 in the project. An estimated $626,000 of additional expenses were incurred during April 2018 and were also written off as of March 31, 2018 bringing the total charge to $6,934,000.