RESTRUCTURING ON ROYALTY INTERESTS IN MINERAL PROPERTIES

6 Months Ended

Dec. 31, 2011

RESTRUCTURING ON ROYALTY INTERESTS IN MINERAL PROPERTIES

RESTRUCTURING ON ROYALTY INTERESTS IN MINERAL PROPERTIES

7.             RESTRUCTURING ON ROYALTY INTERESTS IN MINERAL PROPERTIES

The Company owns a net smelter return royalty on the Relief Canyon property located in Nevada.  From November 2010 to October 2011, the Company had been involved in managing this interest in bankruptcy proceedings of the owner of the Relief Canyon project.  On August 24, 2011, the Company entered into an Amended and Restated Net Smelter Return Royalty Agreement with the property owner, pursuant to which the royalty rate was reduced from 4% to 2%, and the ten mile area of interest was eliminated.  The Company elected to amend the royalty agreement in order to enhance project economics and the probability of recognizing royalty revenue.  As a result of the amendment to the Relief Canyon royalty agreement, the Company recorded a restructuring charge of approximately $1.3 million during the quarter ended September 30, 2011, which was based on the Company’s estimate of fair value.  The Company’s carrying value for the Relief Canyon royalty interest was approximately $1.2 million as of December 31, 2011.