Quarterly report pursuant to sections 13 or 15(d)

INVESTMENT IN AL MASANE AL KOBRA MINING COMPANY (AMAK)

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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.