XML 27 R16.htm IDEA: XBRL DOCUMENT v3.23.2
FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS
 6 Months Ended
Jun. 30, 2023
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS
Fair value accounting establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:
Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2 - Quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, quoted prices or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability and model-based valuation techniques (e.g. the Black-Scholes model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).
As required by accounting guidance, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following tables set forth the Company’s assets and liabilities measured at fair value on a recurring (at least annually) and nonrecurring basis by level within the fair value hierarchy (in thousands):
Fair value at June 30, 2023
Level 1 (1)
Level 2 (2) 
Level 3  (3) 
Total
Assets:
Cash$379,243 $— $— $379,243 
Restricted cash33,560 — — 33,560 
Marketable securities38,765 — — 38,765 
Trade receivables from provisional sales, net — 53,766 — 53,766 
Deferred consideration— — 22,344 22,344 
$451,568 $53,766 $22,344 $527,678 
Liabilities:
Derivative liabilities— 356 — 356 
Contingent consideration (4)
— — 28,600 28,600 
$— $356 $28,600 $28,956 

Fair value at December 31, 2022
Level 1 (1)
Level 2 (2) 
Level 3  (3) 
Total
Assets:
Cash$655,453 $— $— $655,453 
Restricted cash33,653 — — 33,653 
Marketable securities44,841 — — 44,841 
Trade receivables from provisional sales, net — 49,897 — 49,897 
Deferred consideration— — 24,369 24,369 
$733,947 $49,897 $24,369 $808,213 
(1)Marketable securities of publicly quoted companies, consisting of investments, are valued using a market approach based upon unadjusted quoted prices in an active market obtained from securities exchanges.  
(2)At times, the Company manages a portion of its exposure to fluctuation in diesel prices and foreign currency exchange rates through hedges. In periods when the Company has open hedge positions, the derivative asset and liabilities are valued using pricing models with inputs derived from observable market data, including quoted prices in active markets. The Company’s provisional metal sales contracts, included in Trade and other receivables in the Consolidated Balance Sheets, are valued using inputs derived from observable market data, including quoted commodity forward prices. The inputs do not involve significant management judgment. Such instruments are classified within Level 2 of the fair value hierarchy.
(3)Certain items of deferred consideration are included in Level 3, as certain assumptions used in the calculation of the fair value are not based on observable market data.
(4)The contingent consideration related to the Transaction are included in Level 3, as certain assumptions used in the calculation of the fair value are not based on observable market data. The fair value of the contingent consideration tied to completion of operational milestones was determined using a discounted cash flow model. The significant assumptions include estimates of timing of completion of milestones and a discount rate of 6.0%. The fair value of the contingent consideration tied to delineation of new reserves was determined using a probability-weighted discounted cash flow model. The significant assumptions include estimates of timing of delineation of new reserves, a 10.0% probability of delineation of new reserves and a discount rate of 6.0%.
The following table reconciles the beginning and ending balances for financial instruments that are recognized at fair value using significant unobservable inputs (Level 3) in the consolidated financial statements (in thousands):
Six Months Ended June 30,
20232022
Deferred consideration assets:
Balance as of January 1$24,369 $22,610 
Revaluations(1,551)853 
Receipt of deferred consideration(474)— 
Balance as of June 30
$22,344 $23,463 
Six Months Ended June 30,
20232022
Deferred consideration liabilities:
Balance as of January 1$— $— 
Assumption of deferred consideration28,600 — 
Balance as of June 30$28,600 $— 
Fair values of financial assets and liabilities not already measured at fair value
The fair value of the 2019 Notes and Term Loan as compared to the carrying amounts were as follows (in thousands): 
June 30, 2023December 31, 2022
LevelCarrying amountFair valueCarrying amountFair value
2019 Notes (1) 
1$227,000 $245,824 $226,510 $257,025 
Term Loan (2)
235,000 35,412 70,000 71,419 
Total borrowings$262,000 $281,236 $296,510 $328,444 
(1) The fair value disclosed for the Company's 2019 Notes is included in Level 1 as the basis of valuation uses a quoted price in an active market.
(2) The fair value disclosed for the Company's Term Loan is included in Level 2 as the fair value is determined by an independent third-party pricing source.