4. NOTES RECEIVABLE

Laramide Note Receivable

As part of the consideration for the sale of Hydro Resources, Inc. (HRI) in January 2017, the Company received a promissory note in the amount of $5.0 million, secured by a mortgage over the Churchrock and Crownpoint properties owned by Laramide Resources Ltd. (“Laramide”). The note has a three-year term and carries an initial interest rate of 5%. The Company received the first two installment payments of $1.5 million each in January 2018 and January 2019. The final principal payment of $2.0 million is due and payable on January 5, 2020. Interest is payable on a quarterly basis during the final year. Laramide had the right to satisfy up to half of the principal payments by delivering shares of its common stock to the Company, which shares were valued by reference to the volume weighted average price (“VWAP”) for Laramide’s common stock for the 20 trading days before their respective anniversaries of the initial issuance date in January. The fair value of this note receivable was determined using the present value of the future cash receipts discounted at a market rate of 9.5%.

On August 30, 2019, the Company sold the promissory note (Note 5). Prior to August 30, 2019, the Company had received three tranches of Laramide common shares as partial consideration for the sale, which has resulted in the receipt of 2,218,133, 1,982,483 and 2,483,034 Laramide common shares in January 2017, January 2018 and January 2019, respectively. These share payments represented the initial consideration from the January 2017 sale of HRI and two note installments in January 2018 and January 2019. The first note installment in the amount of $1.5 million in January 2018, consisted of $750,000 in cash and the issuance of 1,982,483 of Laramide’s common shares. The second note installment in the amount of $1.5 million in January 2019, consisted of $750,000 in cash and the issuance of 2,483,034 of Laramide’s common shares. Additionally, Laramide made interest payments in the amount of $96,022 in cash during the nine months ending September 30, 2019.

During the nine months ended September 30, 2019, the Company sold the third tranche of 2,483,034 Laramide common shares and 2,218,133 Laramide warrants resulting in net proceeds of $0.5 million and a net loss on sale of marketable securities of $0.7 million.

The following tables show the notes receivable, accrued interest and unamortized discount on the Company’s notes receivable as of September 30, 2019 and December 31, 2018.

September 30, 2019

Less

Unamortized

Note Balance

Note

Plus Accrued

Note

per Balance

(thousands of dollars)

Amount

Interest

Discount

Sheet

Current Assets

Notes receivable Laramide – current

—

Subtotal Notes Receivable – current

—

Non-current Assets

Notes receivable – Laramide – non-current

—

Total Notes Receivable – current and non-current

—


	December 31, 2018
					Less
					Unamortized		Note Balance
	Note		Plus Accrued		Note		per Balance
(thousands of dollars)	Amount		Interest		Discount		Sheet
Current Assets
Notes receivable Laramide – current	$	1,500	$	45	$	—	$	1,545
Subtotal Notes Receivable – current	$	1,500	$	45	$	—	$	1,545

Non-current Assets
Notes receivable – Laramide – non-current	$	2,000	$	—	$	(507)	$	1,493
Total Notes Receivable – current and non-current	$	3,500	$	45	$	(507)	$	3,038