| (k) | Exploration and mine development costs – |
Exploration costs -
Exploration costs are expensed as incurred. These costs primarily include materials and fuels used, surveying costs, drilling costs and payments made to the contractors.
Exploration and evaluation activity includes:
| - | Researching and analyzing historical exploration data. |
| - | Gathering exploration data through geophysical studies. |
| - | Exploratory drilling and sampling. |
| - | Determining and examining the volume and grade of the resource. |
| - | Surveying transportation and infrastructure requirements. |
| - | Conducting market and finance studies. |
Development costs –
When the Group’s Management approves the feasibility of the conceptual study of a project, the costs incurred to develop such property, including additional costs to delineate the ore body and remove impurities it contains, are capitalized as development costs under the caption mining concessions, development costs and property, plant and equipment, net. These costs are amortized when production begins, on the units-of-production basis over the proven and probable reserves.
The development costs include:
| - | Metallurgical and engineering studies. |
| - | Drilling and other costs necessary to delineate ore body. |
| - | Removal of the initial clearing related to an ore body. |
Development costs necessary to maintain production are expensed as incurred.
