NOTE 2 INVESTMENTS

The investment portfolio of the Company consists of marketable equity securities and warrants of certain publicly-traded companies. The Company classifies the marketable equity securities as available-for-sale securities, which are recorded at fair value based upon quoted market prices. The warrants are recorded at fair value using the Black-Scholes option pricing model. The following is a summary of the balances as of June 30, 2016 and December 31, 2015:


							Other			Statement of
			Additions		Disposals		Comprehensive		Operations		Fair Value
	Opening		during		during		Income		(Loss)		end of the
As of June 30, 2016	balance		period		period		(pre-tax)		Income		period
Marketable equity securities	$	1,032	$	233	$	(470)	$	2,873	$	(860)	$	2,808
Warrants		—		165		—		—		1,719		1,884
Investments	$	1,032	$	398	$	(470)	$	2,873	$	859	$	4,692


							Other		Statement of
			Additions		Disposals		Comprehensive		Operations		Fair Value
	Opening		during		during		Loss		(Loss)		end of the
As of December 31, 2015	balance		year		year		(pre-tax)		Income		year
Marketable equity securities	$	1,409	$	448	$	—	$	(825)	$	—	$	1,032
Warrants		—		—		—		—		—		—
Investments	$	1,409	$	448	$	—	$	(825)	$	—	$	1,032

As of June 30, 2016, the cost of the marketable equity securities and warrants was approximately $1.8 million (December 31, 2015 - $1.9 million).

On May 13, 2016, the Company participated in a private placement with Golden Predator Mining Corp. (“Golden Predator”) under which it acquired 3,125,000 units, each unit consisting of one common share and one common share purchase warrant (“warrant”), for a total cost of $0.4 million. Using proportional allocation, the Company allocated $0.2 million as the cost base for each to the common shares and warrants.

As the warrants meet the definition of derivative instruments, unrealized gains or losses arising from their revaluation are recorded in the Consolidated Statement of Operations and Comprehensive Income (Loss). During the three and six months ended June 30, 2016, the Company recorded an unrealized gain of $1.7 million.

In addition, during the six months ended June 30, 2016, the Company sold marketable equity securities for proceeds of $0.5 million. The Company realized a gain of $0.1 million, which is included in the Consolidated Statement of Operations and Comprehensive Income (Loss).

During the six months ended June 30, 2016, the Company reviewed its investment portfolio to determine if any security was other-than-temporarily impaired (“OTTI”). An OTTI security would require the Company to record an impairment charge in the income statement in the period any such determination is made. In making this judgment, the Company evaluated, among other things, the duration and extent to which the fair value of a security was less than its cost; the financial condition of the issuer and any changes thereto; and the Company’s intent to sell, or whether it will more likely than not be required to sell, the security before recovery of its amortized cost basis.

From this assessment the Company concluded that the fair value of certain marketable equity securities exhibited a prolonged decline in share price due to deterioration of the issuer’s results; therefore, the decline in these marketable equity securities was considered OTTI. Accordingly, the Company recognized an OTTI impairment loss of $0.6 million and $0.9 million on the Consolidated Statement of Operations and Comprehensive Income (Loss), for the three and six months ended June 30, 2016, respectively.

For the remaining marketable equity securities, the Company recorded a gain, net of tax, in other comprehensive income, of $1.6 million and $1.5 million for the three and six months ended June 30, 2016. The gain was recorded in accumulated other comprehensive income and is reported as a separate line item in the shareholders' equity section of the balance sheet.

The gains and losses for available-for-sale securities are not reported in the Consolidated Statement of Operations and Comprehensive Income (Loss) until the securities are sold or if there is an other-than-temporary decline in fair value below cost.