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Deferred Consideration—gold payments

12 Months Ended

Dec. 31, 2023

Deferred Consideration Gold Payments [Abstract]

9. Deferred Consideration—gold payments

Deferred consideration—gold payments represented 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 was 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 continuing into perpetuity (“Contractual Gold Payments”). ETFS Capital passed through these payments to other parties to meet its payment obligations under prior royalty agreements it had with such parties, including to Gold Bullion Holdings (Jersey) Limited (“GBH”), a subsidiary of the World Gold Council (“WGC”), Graham Tuckwell (“GT”), and Rodber Investments Limited (“RIL”), an entity controlled by GT, who is also the Chairman of ETFS Capital.

On May 10, 2023, the Company terminated its Contractual Gold Payments obligation for aggregate consideration totaling $136,903 pursuant to a Sale, Purchase and Assignment Deed (the “SPA Agreement”) with WisdomTree International Holdings Ltd, Electra Target HoldCo Limited, ETFS Capital, WGC, GBH, GT and RIL. Under the terms of the transaction, GBH received approximately $4,371 in cash and 13,087 shares of Series C Preferred Stock, convertible into 13,087,000 shares of the Company’s common stock, and RIL received approximately $45,634 in cash.

On November 20, 2023, the Company repurchased the 13,087 shares of Series C Preferred Stock issued to GBH for aggregate consideration of $84,411, $40,000 of which was paid on the closing date, with the remaining $44,411 payable in equal, interest-free installments on the first, second and third anniversaries of the closing date. See Note 12 for additional information.

The Company determined the present value of the deferred consideration of $0 and $200,290 at December 31, 2022 using the following assumptions:

	December 31, 2022
Forward-looking gold price (low)—per ounce	$	1,858
Forward-looking gold price (high)—per ounce	$	3,126
Forward-looking gold price (weighted average)—per ounce	$	2,237
Discount rate		11.0%
Perpetual growth rate		1.3%

The forward-looking gold prices at December 31, 2022 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 December 31, 2022 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 and long-term amounts payable were $16,796 and $183,494, respectively, at December 31, 2022.

During the years ended December 31, 2023 and 2022, the Company recognized the following in respect of deferred consideration:

	Years Ended December 31,
	2023		2022		2021
Contractual gold payments	$	6,069	$	17,108	$	17,096
Contractual gold payments—gold ounces paid		3,167		9,500		9,500
Gain on revaluation/termination of deferred consideration—gold payments(1)	$	61,953	$	27,765	$	2,018

(1) Gains on revaluation/termination 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.