PROPERTY AND EQUIPMENT

9 Months Ended

Sep. 30, 2012

5. PROPERTY AND EQUIPMENT

Property and equipment costs consist of the following:

		September 30,			December 31,
		2012			2011
		(unaudited)
Land	$	87,114		$	87,114
Buildings		2,071,618			2,071,618
Mine development costs – existing dumps		468,034			468,034
Mine development costs – new dumps		1,841,080			1,841,080
Asset retirement obligation		2,708,870			2,708,870
Mining and other equipment		43,386,881			43,341,482
Total		50,563,597			50,518,198

Accumulated depreciation, depletion and amortization		(6,631,012	)		(6,313,728	)
Net property and equipment	$	43,932,585		$	44,204,470

Total depreciation, depletion and amortization (“DD&A”) of property and equipment charged to operations was $182,028 and $590,364 for the three and nine month periods ended September 30, 2012, respectively. Total DD&A of property and equipment charged to operations was $253,161 and $743,148, respectively, for the three and nine month periods ended September 30, 2011, respectively. The Company allocates DD&A to copper inventories based upon the relative pounds in inventory at each reporting date. Accordingly, as of September 30, 2012 and December 31, 2011, $704,513 and $923,129 respectively, of DD&A costs were included in copper inventories.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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