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Deferred Consideration | 3 Months Ended
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Mar. 31, 2023
Text Block [Abstract] |
Deferred Consideration | 9. Deferred Consideration Deferred consideration represents an obligation the Company assumed in connection with its acquisition of the European exchange-traded commodity, currency and leveraged-and-inverse business of ETFS Capital Limited (“ETFS Capital”) which occurred on April 11, 2018 (“ETFS Acquisition”). The obligation is for fixed payments to ETFS Capital of physical gold bullion equating to 9,500 ounces of gold per year through March 31, 2058 and then subsequently reduced to 6,333 ounces of gold per year continuing into perpetuity (“Contractual Gold Payments”). The Contractual Gold Payments are paid from advisory fee income generated by any Company-sponsored financial product backed by physical gold and are subject to adjustment and reduction for declines in advisory fee income generated by such products, with any reduction remaining due and payable until paid in full. ETFS Capital’s recourse is limited to such advisory fee income and it has no recourse back to the Company for any unpaid amounts that exceed advisory fees earned. ETFS Capital ultimately has the right to claw back Gold Bullion Securities Ltd. (a physically backed gold ETP issuer) if the Company fails to remit any amounts due. The Company determined the present value of the deferred consideration of $179,831 and $200,290 at March 31, 2023 and December 31, 2022 using the following assumptions:
|  | March 31, 2023 |  |  | December 31, 2022 |
Forward-looking gold price (low)—per ounce |  | $ | 1,999 |  |  | $ | 1,858 |
Forward-looking gold price (high)—per ounce |  | $ | 3,567 |  |  | $ | 3,126 |
Forward-looking gold price (weighted average)—per ounce |  | $ | 2,401 |  |  | $ | 2,237 |
Discount rate |  |  | 13.3% |  |  |  | 11.0% |
Perpetual growth rate |  |  | 1.5% |  |  |  | 1.3% |
Fair value as of March 31, 2023 was determined using an equal weighting of a discounted cash flow approach and market approach. The forward-looking gold prices at March 31, 2023 were extrapolated from the last observable CMX exchange price (beyond 2028) and the weighted-average price per ounce was derived from the relative present values of the annual payment obligations. The perpetual growth rate at March 31, 2023 was determined based upon the increase in observable forward-looking gold prices through 2028. This obligation is classified as Level 3 as the discount rate, the extrapolated forward-looking gold prices and perpetual growth rate are significant unobservable inputs. An increase in spot gold prices, forward-looking gold prices and the perpetual growth rate would result in an increase in deferred consideration, whereas an increase in the discount rate would reduce the fair value. Current amounts payable were $17,984 and $16,796 and long-term amounts payable were $161,847 and $183,494 at March 31, 2023 and December 31, 2022, respectively. During the three months ended March 31, 2023 and 2022, the Company recognized the following in respect of deferred consideration:
|  | Three Months Ended March 31, |
|  | 2023 |  |  | 2022 |
Contractual Gold Payments |  | $ | 4,486 |  |  | $ | 4,450 |
Contractual Gold Payments—gold ounces paid |  |  | 2,375 |  |  |  | 2,375 |
Gain/(loss) on revaluation of deferred consideration—gold payments (1) |  | $ | 20,592 |  |  | $ | (17,018) |
(1) | Gains on revaluation of deferred consideration—gold payments result from a decrease in spot gold prices, a decrease in the forward-looking price of gold, a decrease in the perpetual growth rate and an increase in the discount rate used to compute the present value of the annual payment obligations. Losses on revaluation of deferred consideration—gold payments result from an increase in spot gold prices, an increase in the forward-looking price of gold, an increase in the perpetual growth rate and a decrease in the discount rate used to compute the present value of the annual payment obligations.

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