On August 21, 2011, a tornado struck the Company's salt mine and its salt mechanical evaporation plant, both located in Goderich, Ontario.  There was no damage to the underground operations at the mine.  However, some of the mine's surface structures and the evaporation plant incurred significant damage which temporarily ceased production at both facilities.  The Company resumed production and shipping activities, on a reduced basis, at the Goderich mine in early September and resumed limited activities at the evaporation plant in late September.  The Company has been unable to complete a full assessment of the damages at limited portions of both facilities.

The Company maintains comprehensive property and casualty insurance, including business interruption, which is expected to provide substantial coverage for the losses that have and will occur at these facilities related to the tornado. The Company has made an initial estimate of the impairment of its property, plant and equipment pertaining to the accessible areas at both of the Goderich facilities.  The Company may need to record additional impairment charges as more information becomes available.  In addition, the Company has incurred clean-up costs related to the storm. The Company expects to be fully reimbursed by its insurers for the replacement and repair costs for its property, plant and equipment and associated clean-up costs incurred.

For the three and nine months ended September 30, 2011, the costs incurred and insurance recoveries recognized in the consolidated statements of operations are as follows (in millions):

The Company has received approximately $7.2 million of insurance advances which have been recorded as a reduction to salt product cost in the consolidated statements of operations.  In addition, the Company expects to receive an additional $2.2 million related to the replacement and repair costs of our property, plant and equipment and clean-up costs incurred as of September 30, 2011 and has recorded this amount as a receivable in its consolidated balance sheets.  The actual insurance recoveries related to the replacement cost of property, plant and equipment are expected to exceed the net book value of the damaged property, plant and equipment and the related impairment charges of $4.1 million. However, U.S. GAAP limits the recognition of insurance recoveries in the financial statements to the amount of recognized losses, provided the Company believes the recoveries are probable. Any gains related to the replacement of property, plant and equipment from insurance recoveries will be recorded in product cost in the statements of operations when all contingencies relating to the insurance claim have been resolved.

The Company expects to have a substantial business interruption claim to offset lost profits and to offset certain additional expenses incurred related to the ongoing operations.  For the three and nine months ended September 30, 2011, the Company has determined that there were not yet significant net losses recognized in its consolidated statements of operations related to business interruption.  In addition, the amount of actual business interruption recoveries may differ materially from the Company's current and future estimates.  The Company believes the impact of lost production and additional expenses that will be incurred related to the tornado will be substantially covered by the Company's insurance policies.  Any insurance recoveries related to business interruption will be recognized in product cost in the statements of operations when the insurance claim has been settled.  The Company has not recognized any net gains from insurance recoveries for the three and nine months ended September 30, 2011.