Mining Rights

IFRS 6 Exploration for and Evaluation of Mineral Resources has the effect of allowing entities adopting the standard for the first time to use accounting policies for exploration and evaluation assets that were applied before adopting IFRSs.

Exploration for and evaluation of mineral resources means the search for mineral resources, including minerals, oil, natural gas and similar non-regenerative resources after the entity has obtained legal rights to explore in a specific area, as well as the determination of the technical feasibility and commercial viability of extracting the mineral resource.

When facts and circumstances indicate that the carrying amount of an asset may exceed its recoverable amount, an entity should assess whether the asset is impaired. The company should assess whether the asset is impaired and, in accordance with IFRS 6, identify the level of impairment for exploration and evaluation of the asset. This type of valuation focuses on the market transaction data, future earnings and replacement cost of mining rights.