9. Remediation

6 Months Ended

Jun. 30, 2015

Notes

9. Remediation

9.   REMEDIATION

In prior years, the Company accrued $50,000 for remediation of a historic mill site. In 2013, the Company accrued an additional $300,000 for the cost of remediation of a mine road and associated disturbance which must be completed by October 2015 per an order issued by the Army Corps of Engineers. In 2014, the Company received a quote from an independent third party to perform the remediation work and accrued an additional $578,000 to cover the anticipated costs of this remediation prior to October 2015. The cost of this remediation is in addition to the asset retirement obligation calculated in previous years and is classified as a current liability. Remediation activities were nearly complete at the end of July 2015, and the Company has reduced the accrued liability by $111,000 for actual cost experience that came in lower than estimated costs yet to be recognized subsequent to the end of the quarter. The accrual of $464,109 and $928,000 respectively at June 30, 2015 and December 31, 2014 is for anticipated costs to remediate a road and associated disturbance and contamination caused by activities of a previous operator next to an inactive mill site.

During the six month period ended June 30, 2105, the Company made payments to the independent third party of $300,000 and incurred internal expenses of $2,891. These amounts were charged to the remediation accrual to apply remediation costs incurred during the period. The Company believes the accrual remaining at June 30, 2015 of $464,109 for the final remediation of the mine road is sufficient to cover anticipated remaining costs.