INVESTMENT IN AL MASANE AL KOBRA MINING COMPANY (AMAK)

3 Months Ended

Mar. 31, 2014

INVESTMENT IN AL MASANE AL KOBRA MINING COMPANY ("AMAK") [Abstract]

INVESTMENT IN AL MASANE AL KOBRA MINING COMPANY ("AMAK")

13. INVESTMENT IN AL MASANE AL KOBRA MINING COMPANY (“AMAK”)

As of March 31, 2014, and December 31, 2013, we had a non-controlling equity interest of (35%) approximately $53.7 million and $54.1 million, respectively. This investment is accounted for under the equity method. There were no events or changes in circumstances that may have an adverse effect on the fair value of our investment in AMAK at March 31, 2014.

AMAK’s financial statements were prepared in the functional currency of AMAK which is the Saudi Riyal (SR).  In June 1986 the SR was officially pegged to the U. S. Dollar (USD) at a fixed exchange rate of 1 USD to 3.75 SR.

The summarized results of operation and financial position for AMAK are as follows:

Results of Operations

	Three Months Ended March 31,
	2014			2013		2012
	(Thousands of Dollars)
Sales	$	267		$	31,162	$	-
Gross Profit		639			9,906		-
General, administrative and other expenses		2,588			2,786		577
Net Income (loss)	$	(1,949	)	$	7,120	$	(577	)

Financial Position

	March 31, 2014		December 31, 2013
	(Thousands of Dollars)
Current assets	$	41,050	$	32,923
Noncurrent assets		264,431		264,997
Total assets	$	305,481	$	297,920
Current liabilities	$	27,565	$	22,497
Long term liabilities		80,268		75,826
Shareholders' equity		197,648		199,597
	$	305,481	$	297,920

The equity in the income or loss of AMAK reflected on the consolidated statement of income for the quarters ended March 31, 2014, and 2013, is comprised of the following:

	2014			2013
	(Thousands of Dollars)
Company’s share of income (loss) reported by AMAK	$	(687	)	$	2,627
Amortization of difference between Company’s investment in AMAK
and Company’s share of net assets of AMAK		337			337
Equity in earnings of AMAK	$	(350	)	$	2,964

At December 31, 2013, we had an outstanding advance to AMAK of approximately $0.5 million for interim funding on a short term basis. The amount was outstanding at March 31, 2014; however, the entire balance owed was paid in the second quarter of 2014.

See our Annual Report on Form 10-K for the year ended December 31, 2013, for additional information.