FAIR VALUE OF FINANCIAL INSTRUMENTS

3 Months Ended

Mar. 31, 2012

FAIR VALUE OF FINANCIAL INSTRUMENTS [Text Block]

15. FAIR VALUE OF FINANCIAL INSTRUMENTS

Disclosures about fair value of financial instruments for the Company’s financial instruments are presented in the table below. These calculations are subjective in nature and involve uncertainties and significant matters of judgment and do not include income tax considerations. Therefore, the results cannot be determined with precision and, in certain cases, cannot be substantiated by comparison to independent market values and may not be realized in an actual sale or settlement of the instruments. There may be inherent weaknesses in any calculation technique, and changes in the underlying assumptions used could significantly affect the results.

The following table presents a summary of the Company’s financial instruments as of March 31, 2012:

		Carrying		Estimated Fair
		Amount		Value
		(unaudited)		(unaudited)
Financial Assets:
Restricted marketable securities	$	686,476	$	686,476
Accounts receivable		212,810		212,810
Financial Liabilities:
Accounts payable	$	4,389,063	$	***
Accrued expenses		1,413,503		***
Accrued interest		5,686,544		***
Copper derivatives settlement payable		16,106,691		***
Current maturity of long-term debt		6,185,999		***
Senior long–term debt		23,257,826		***
Derivative contracts		26,215		26,215

The carrying amounts for cash and cash equivalents, restricted marketable securities and accounts receivable approximate fair value because of the short maturities of these financial instruments. As noted above, the Company’s derivatives are carried on the condensed consolidated balance sheet at estimated fair value. As of March 31, 2012, the fair value of the derivatives includes an aggregate counterparty credit valuation adjustment of $668.

*** Given the current situation with the Company’s senior lender and the related default of the underlying Credit Agreement, as amended, the Company does not believe that an estimate of the fair value of its senior long-term debt can be made without incurring substantial time and resources. Accordingly, an estimate of the fair value of its senior long-term debt as of March 31, 2012 is considered impracticable. In addition, due to the current situation with the Company’s senior lender and the impact this situation may have on the remaining liabilities of the Company, as of March 31, 2012, an estimate of the fair value of accounts payable, accrued expenses, accrued interest, copper derivatives settlement payable and long-term debt is also considered impracticable.