Provision for restoration and rehabilitation
A provision for restoration and rehabilitation is recognized when there is a present legal or constructive obligation as a result of exploration and development activities undertaken; it is more likely than not that an outflow of economic benefits will be required to settle the obligation and the amount of the provision can be measured reliably. The estimated future obligation includes the cost of removing facilities, abandoning sites and restoring the affected areas.
The provision for future restoration costs is the best estimate of the present value of the expenditure required to settle the restoration obligation at the reporting date. The estimated cost is capitalized into the cost of the related asset and amortized on the same basis as the related assets.
If the estimated cost does not relate to an asset, it is charged to earnings in the period in which the event giving raises to the liability occurs.
As at December 31, 2017 and 2016, the Company did not have any provision for restoration and rehabilitation.
