LEASES
We determine if an arrangement is a lease or contains a lease at inception. We have operating leases for mining equipment, trucks, rail cars, and office space. Our operating leases have remaining lease terms ranging from less than one year to six years. Our finance leases have remaining terms ranging from less than one year to seven years. Leases recorded on the balance sheet consist of the following (amounts in thousands):
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| Leases | | Classification on the Balance Sheet | | Balance, December 31, 2025 | | Balance, December 31, 2024 |
| Assets | | | | | | |
| Operating lease ROU assets, net | | Property, plant, equipment, and mineral properties, net | | $ | 2,245 | | | $ | 1,437 | |
| Finance lease ROU assets, net | | Property, plant, equipment, and mineral properties, net | | $ | 3,435 | | | $ | 2,934 | |
| Liabilities | | | | | | |
| Current operating lease liabilities | | Other current liabilities | | $ | 983 | | | $ | 679 | |
| Current finance lease liability | | Other current liabilities | | $ | 1,035 | | | $ | 951 | |
| Non-current operating lease liabilities | | Operating lease liabilities | | $ | 1,550 | | | $ | 780 | |
| Non-current finance lease liabilities | | Finance lease liabilities | | $ | 1,741 | | | $ | 1,838 | |
| | | | | | |
Other information related to lease term and discount rate is as follows:
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| | December 31, |
| | 2025 | | 2024 |
| Weighted average remaining lease term - operating leases | | 3.0 years | | 3.9 years |
| Weighted average remaining lease term - finance leases | | 3.7 years | | 3.0 years |
| | | | |
| Weighted average discount rate - operating leases | | 7.6 | % | | 7.0 | % |
| Weighted average discount rate - finance leases | | 7.8 | % | | 7.6 | % |
The components of lease expense are as follows (amounts in thousands):
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| | Year Ended December 31, |
| | 2025 | | 2024 | | 2023 |
| Operating lease expense | | $ | 1,468 | | | $ | 1,443 | | | $ | 1,667 | |
| Short-term lease expense | | 82 | | | 79 | | | 122 | |
| Total lease expense | | $ | 1,550 | | | $ | 1,522 | | | $ | 1,789 | |
Supplemental cash flow information related to leases was as follows (amounts in thousands):
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| | Year Ended December 31, |
| | 2025 | | 2024 |
| Cash paid for amounts included in the measurement of lease liabilities | | | | |
| Operating cash flows from operating leases | | $ | 1,582 | | | $ | 1,516 | |
| Operating cash flows from finance leases | | 220 | | | 185 | |
| Financing cash flows from finance leases | | 1,043 | | | 942 | |
| | | | |
| Right-of-Use Assets exchanged for new operating lease liabilities | | 2,185 | | | 751 | |
| Right-of-Use Assets exchanged for new finance lease liabilities | | 1,380 | | | 1,562 | |
As of December 31, 2025, maturities of lease liabilities are summarized as follows (amounts in thousands):
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| Years Ending December 31, | | Operating Leases | | Finance Leases | | Total |
| 2026 | | $ | 1,141 | | | $ | 1,203 | | | $ | 2,344 | |
| 2027 | | 1,068 | | | 628 | | | 1,696 | |
| 2028 | | 255 | | | 604 | | | 859 | |
| 2029 | | 150 | | | 376 | | | 526 | |
| 2030 | | 139 | | | 165 | | | 304 | |
| Thereafter | | 92 | | | 248 | | | 340 | |
| Total future minimum lease payments | | $ | 2,845 | | | 3,224 | | | 6,069 | |
| Less - amount representing interest | | 312 | | | 448 | | | 760 | |
| Present value of future minimum lease payments | | $ | 2,533 | | | 2,776 | | | 5,309 | |
| Less - current lease obligations | | 983 | | | 1,035 | | | 2,018 | |
| Long-term lease obligations | | $ | 1,550 | | | $ | 1,741 | | | $ | 3,291 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.