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ACQUISITIONS AND DIVESTITURES | 9 Months Ended
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Sep. 30, 2023
Business Combination and Asset Acquisition [Abstract] |
ACQUISITIONS AND DIVESTITURES | ACQUISITIONS AND DIVESTITURES Acquisitions Acquisition of up to 40% ownership and operatorship in the Hod Maden Project On May 8, 2023, the Company, through its wholly owned subsidiary Alacer Gold Corporation, reached an agreement to acquire from Lidya Madencilik Sanayi ve Ticaret A.Ş (“Lidya Mines”) an up to 40% interest in, and operational control of, the Hod Maden gold-copper development project, located in northeastern Türkiye (the "Transaction"). Hod Maden was owned by Artmin Madencilik Sanayi Ve Ticaret A.Ş (“Artmin”), a joint venture owned 70% by Lidya Mines and 30% by Horizon Copper Corp. (“Horizon”) prior to the closing of the Transaction. Upon closing of the Transaction, the Company made a $120.0 million cash payment to Lidya Mines to acquire a 10% interest in Artmin. The Company has the option to acquire an additional 30% interest in Artmin from Lidya Mines for $120.0 million in structured payments tied to the completion of project construction spending milestones. Additionally, the Company will make contingent payments to Lidya Mines including $30.0 million in milestone payments payable in accordance with an agreed upon schedule beginning at the start of construction and ending on the first anniversary of commercial production and $84.0 million payable upon the delineation of an additional 500,000 gold equivalent ounces of mineral reserves at the Hod Maden project in excess of the project’s current mineral reserves and mineral resources. The acquisition date fair value of the consideration paid is as follows (in thousands):
Cash paid to Lidya Mines for 10% interest | $ | 120,000 |
Contingent consideration tied to completion of operational milestones (1) |  | 24,300 |
Contingent consideration tied to delineation of new reserves (1) |  | 4,300 |
Total consideration | $ | 148,600 |
(1) The fair value of the two elements of contingent consideration are based on a discounted cash flow model. The contingent consideration is considered a Level 3 fair value measurement due to certain assumptions that are not based on observable market data (refer to Note 10 for more information). The significant assumptions include estimates of timing of completion of project milestones, probability of delineation of additional reserves, and discount rates. The contingent consideration is included within Other non-current liabilities on the Condensed Consolidated Balance Sheets. The Company determined that Artmin is a variable interest entity (“VIE”) for which it is the primary beneficiary and is consolidated under ASC 810 as the Company has the power to direct the significant activities and the right to receive benefits and obligation to absorb losses of Artmin. The assets of Artmin can only be used to settle the obligations of Artmin and not the obligations of the Company. The creditors of Artmin do not have recourse to the assets or general credit of the Company to satisfy its liabilities. The Company concluded that Artmin was not a business based on its assessment under ASC 805 and accounted for the acquisition as an initial consolidation of a VIE that is not a business under ASC 810. There was no gain or loss recognized upon initial consolidation of the VIE as the sum of the fair value of the consideration paid and non-controlling interest equaled the fair value of the net assets on the acquisition date. The Company incurred transaction costs of approximately $0.4 million in connection with the Transaction included in Other operating expenses, net in the Condensed Consolidated Statements of Operations. The Company retained a third-party appraiser to determine the fair value of the consideration paid, assets acquired, liabilities assumed, and non-controlling interest as of the acquisition date. The fair value estimates were based on income and market valuation methods. The following table summarizes the fair value of the assets acquired and liabilities assumed on the acquisition date (in thousands):
ASSETS |  |
Cash and cash equivalents | $ | 11 |
Trade and other receivables |  | 36 |
Inventories |  | 3 |
Prepaids and other current assets |  | 24 |
Mineral properties, plant and equipment, net (1) |  | 688,611 |
Other non-current assets |  | 1,690 |
Total assets acquired | $ | 690,375 |
LIABILITIES |  |
Accounts payable | $ | 315 |
Accrued liabilities and other |  | 643 |
Deferred income tax liabilities (2) |  | 135,939 |
Total liabilities assumed |  | 136,897 |
Net assets acquired and liabilities assumed |  | 553,478 |
Non-controlling interest |  | (404,878) |
| $ | 148,600 |
(1) The fair value of mineral properties, plant and equipment is based on applying the income and market valuation methods. The significant assumptions include future metal prices, estimated quantities of mineral reserves and mineral resources, future capital and operating expenditures, and discount rates. (2) Deferred income tax liabilities represent the future tax expense associated with the differences between the fair value allocated to assets and liabilities and the historical carryover tax basis of these assets and liabilities. The assets acquired are included in the Corporate and other operating segment. The non-controlling interest is representative of Lidya Mines and Horizon’s combined 90% interest and is inclusive of the 30% redeemable interest. As the redemption features are solely within the control of the Company, the redeemable non-controlling interest in Artmin is classified within permanent equity under ASC 480. In connection with the acquisition of the Hod Maden project, Horizon advanced Artmin $4.5 million to help fund working capital. The loan is unsecured, bears interest at the credit default swap premium of Türkiye plus a fixed spread of 4.0% and matures on June 28, 2028. As of September 30, 2023, no repayments have been made on the loan. The liability is included in Other non-current liabilities in the Condensed Consolidated Balance Sheets. Acquisition of Taiga Gold Corp. On April 14, 2022, the Company completed the purchase of all the issued and outstanding common shares of Taiga Gold Corp. (“Taiga Gold”), which holds the exploration and evaluation stage resources in Saskatchewan, Canada in proximity to the Company’s Seabee mine and Fisher project. The transaction was accounted for as an asset acquisition for total consideration of $24.8 million. The total consideration was allocated to the assets acquired and liabilities assumed based on their estimated fair values on the acquisition date, which consisted primarily of cash and cash equivalents of $24.8 million, exploration and evaluation assets of $27.8 million, and a related deferred tax liability of $7.5 million. The assets are included in the Seabee mine operating segment. Divestitures On July 6, 2022, the Company completed the sale of the Pitarrilla project in Durango, Mexico, included in the Corporate and other segment, to Endeavour Silver Corp. ("Endeavour Silver"). The consideration received included cash o f $35.0 million, Endeavour Silver common shares with a fair value on the closing date of $25.6 million (8,577,380 s hares at $2.99 per share), and 1.25% net smelter returns royalty on the Pitarrilla property. A gain of $0.6 million was recognized, included in Gain on sale of assets in the Consolidated Statements of Operations, calculated as the difference between the consideration received and carrying amount of the net assets.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//805/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//205-20/tableOfContent + Details
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