Income Taxes

9 Months Ended

Sep. 30, 2012

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The provision for income taxes includes the following components:

	For the three months ended September 30,						For the nine months ended September 30,
	2012			2011			2012			2011
Current expense:
Canada	$	—		$	—		$	—		$	—
Foreign	—			(788		)	—			(2,472		)
Deferred tax expense:
Canada	—			—			—			—
Foreign	(4,002		)	(2,833		)	(19,464		)	(9,255		)
Total expense	$	(4,002	)	$	(3,621	)	$	(19,464	)	$	(11,727	)

The deferred tax expense is related to the change in the temporary difference between book and tax basis at GSWL. In the first quarter of 2012, Ghana implemented a new tax law that raised the statutory rate from 25% to 35%. This increase had a $9.6 million impact on the first quarter 2012 deferred tax expense relating to the temporary difference at GSWL arising from prior periods. The tax expense related to the activity of the first nine months of 2012 is $9.9 million. The historical tax losses in Canada are sufficient to offset the taxable gain on the sale of our Burkina Faso subsidiary to Riverstone. No tax expense has been recorded related to this transaction.

The current tax expense in 2011 is related to a temporary tax levy on certain Ghanaian industries, including; mining, brewing, banking, communications and insurance. The levy was set at 5% of “profits before tax” as disclosed on the statements of operations. The levy expired at the end of 2011.