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INVESTMENT IN AL MASANE AL KOBRA MINING COMPANY (AMAK)
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3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2013
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| INVESTMENT IN AL MASANE AL KOBRA MINING COMPANY ("AMAK") [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INVESTMENT IN AL MASANE AL KOBRA MINING COMPANY ("AMAK") |
14. INVESTMENT IN AL MASANE AL KOBRA MINING COMPANY ("AMAK")
In December 2012 the Board of Directors of AMAK authorized the issuance of additional shares of AMAK in an amount equal to ten percent of the then outstanding shares to raise funds for working capital requirements and retirement of construction debt. In January 2013 we entered into an agreement with AMAK to purchase an additional 937,500 shares of AMAK at 30 Saudi Riyals (USD $8.00) per share, for a total of USD $7.5 million. Due to the continued improvement in the operations of AMAK and a desire to prevent a substantial dilution of its investment, we elected to purchase these additional shares. As a result of this purchase and upon completion of the raise, our ownership percentage in AMAK will be approximately 35.25%. All existing AMAK shareholders had the opportunity to buy into the issue and all shares are expected to be placed within that group.
As of March 31, 2013, and December 31, 2012, the Company had a non-controlling equity interest of approximately $46.8 million and $40.0 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, 2013.
The equity in the income or loss of AMAK reflected on the consolidated statement of income for the quarters ended March 31, 2013, and 2012, is comprised of the following:
During the year ended December 31, 2012, we advanced approximately $2.0 million to AMAK for interim funding on a short term basis. The amount remained outstanding at March 31, 2013; however, AMAK's Board has passed a resolution that all shareholder loans will be repaid when the equity raise discussed above is complete.
See the Company's Annual Report on Form 10-K for the year ended December 31, 2012, for additional information.
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