Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Assets and Liabilities Measured at Fair Value on a Recurring Basis During the years ended December 31, 2019, and 2018, there were no transfers of assets and liabilities between Level 1, Level 2, or Level 3. The following table presents our assets and liabilities at December 31, 2019, which are measured at fair value on a recurring basis:
The following table presents our liabilities at December 31, 2018, which are measured at fair value on a recurring basis:
Following is a description of the valuation methodologies used for the Company's financial instruments measured at fair value on a recurring basis as well as the general classification of such instruments pursuant to the valuation hierarchy. Convertible preferred shares of Tonogold - The value of the convertible preferred shares (CPS) of Tonogold is based on a Monte Carlo model with various inputs. These inputs include the Tonogold common share price of $0.40, volatility of 82%, risk-free rate of 1.58%, cost of debt of 11.81%, private placement conversion price ceiling of $0.18, redemption probability of 50%, and illiquidity discount of 10% - 15%. The convertible preferred shares are classified within Level 3 of the valuation hierarchy. The CPS is convertible into Tonogold common stock in May 2020, at the lowest of (1) $0.18 per share, or (2) Tonogold’s 20-day volume-weighted closing price prior to conversion. Under U.S. GAAP, the Company has the irrevocable option to elect to report certain financial assets and liabilities at fair value on an instrument by instrument basis, with changes in fair value reported in net earnings. This option was elected for the treatment of the $6.10 million of CPS received on May 31, 2019 ($3.92 million), August 30, 2019 ($0.83 million), October 14, 2019 ($0.75 million), December 19, 2019 ($0.50 million), and December 30, 2019 ($0.10 million). For the twelve months ended December 31, 2019, the Company recorded the receipt of the CPS at a fair value of $7.6 million when received and recorded an additional $1.5 million in income for the changes in fair market value. Accrued make-whole for Pelen LLC - The accrued make-whole is valued based on the difference between the valuation of the outstanding shares held by the seller of the membership interests at the volume-weighted price per share for five consecutive trading days preceding the date of determination of $0.47 at December 31, 2019, and $0.67 at December 31, 2018, as compared to the remaining aggregate proceeds due. The Company agreed to add $17,500 to the purchase price which is included in the remaining aggregate proceeds due. Because the inputs are all observable market-based inputs, this instrument is classified within Level 2 of the valuation hierarchy. Accrued make-whole for Mercury Clean Up LLC - The accrued make-whole is valued based on the difference between the value of the outstanding shares delivered to MCU at the Company’s closing stock price of $0.44 on December 31, 2019 and the required investment value of $850,000. Because the inputs are all observable market-based inputs, the instrument is classified within Level 2 of the valuation hierarchy. The carrying amount of cash and cash equivalents and trade payables approximates fair value because of the short-term maturity of these financial instruments. At December 31, 2019, and December 31, 2018, the fair value of long-term debt approximated $5.1 million and $8.9 million, respectively, as determined by borrowing rates estimated to be available to the Company for debt with similar terms and conditions. The fair value of assets and liabilities whose carrying value approximates fair value is determined using Level 2 inputs, with the exception of cash and cash equivalents (Level 1). |