Monument Mining Limited Annual Report 2011  Notes to Consolidated Financial Statements  Work in progress represents gold in the processing circuit that has not completed the production process. Work in  progress is recorded at average cost. Costs include direct labour, mine-site overhead, and depreciation and depletion on  Selinsing mine equipment, processing plant and mineral properties.  Finished goods inventory is metal available for sale and is valued at the lower of average production cost and net  realizable value.  Property, plant and equipment are recorded at cost less accumulated depreciation and related impairment losses. The  initial cost of an asset comprises its purchase price or construction cost, any costs directly attributable to bringing the  asset into operation, the initial estimation of asset retirement obligation. The purchase price or construction cost is the  aggregate amount paid and the fair value of any other consideration given to acquire the asset. The amortization begins  when the asset is substantially put into service.  Mineral properties in production are amortized on a unit-of-production basis over the economically recoverable reserves  of the estimated life of mine. Gold processing plant is amortized on a unit-of-production basis over the total tonnages of  mill feed over the estimated life of mine. Amortization of various components of the gold processing plant and other  capital assets are calculated on a straight- line basis over the assets’ estimated useful lives over the following periods: Amortization expenses from production property and plant are inventoried; amortization from equipment used in  exploration and development of mineral property interests are capitalized under mineral properties in development;  amortization from administration capital assets are charged against operations. The Company reviews and evaluates the carrying value of its operating mine, development and exploration properties  for impairment whenever events or changes in circumstances indicate that the carrying amounts of related assets or  group of assets might not be recoverable. Whenever the total estimated future cash flows on an undiscounted basis of a  property is less that the carrying amount of the property, the impairment loss is recorded. The amount of loss is  measured as the excess of the carrying value of the asset over its fair value. All long-lived assets at a particular operation  are combined for purpose of estimated future cash flows.  Fair value may be determined based on values of recent transactions involving sale of similar properties for exploration  properties or through a discounted cash flow analysis based on a life-of-mine plan.  The Company capitalizes all costs related to investments in mineral property interests on a property-by-property basis.  Such costs include mineral property interest acquisition costs and exploration and development expenditures, net of any  recoveries. These deferred expenditures will be amortized over the estimated life of the property following  commencement of commercial production, or written off if the property is sold, allowed to lapse, abandoned or when  impairment in value is determined to have occurred. Mineral property interest acquisition costs include the cash consideration, the fair value of common shares issued for  mineral property interests and the fair value of warrants issued determined using the Black-Scholes option pricing  model. During the development of a mine, prior to the commencement of production, costs incurred to remove overburden and  other mine waste materials in order to access the ore body at Selinsing open pit operations (“stripping costs”) are  capitalized to the related property and depleted over the productive life of the mine using the unit-of-production  method. During the production phase of a mine, stripping costs are accounted for as variable production costs and  h. Mineral property interests  g. Impairment of long-lived assets  Buildings  50 years  Machineries, heavy equipment and components of plant  2  – 20 years  Administrative furniture and equipment  10 years  Computers  2-5 years  Vehicles (including vehicles under capital lease)  5 years  f. Property, plant and equipment  46 |  P a g e