FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2021

4. FINANCIAL INSTRUMENTS

Applicable accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price) and establishes a fair-value hierarchy that prioritizes the inputs used to measure fair value using the following definitions (from highest to lowest priority):

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Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that are observable at the measurement date.

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Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

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Level 3 includes unobservable inputs that reflect management’s assessment about what factors market participants would use in pricing the asset or liability. These inputs are developed based on the best information available, including internal data.

The Company believes that the fair value of its assets and liabilities approximates their reported carrying amounts. The following table presents information about assets that were recorded at fair value on a recurring and non-recurring basis as of June 30, 2021, and December 31, 2020, and indicates the fair value hierarchy.


	June 30, 2021
(thousands of dollars)	Level 1		Level 2		Level 3		Total
Current Assets
Equity securities	$	2,931	$	—	$	—	$	2,931
Total current assets recorded at fair value	$	2,931	$	—	$	—	$	2,931


	December 31, 2020
(thousands of dollars)	Level 1		Level 2		Level 3		Total
Current Assets
Equity securities	$	—	$	—	$	1,520	$	1,520
Total current assets recorded at fair value	$	—	$	—	$	1,520	$	1,520
Non-current Assets
Restricted cash	$	10	$	—		—	$	10
Total non-current assets recorded at fair value	$	10	$	—	$	—	$	10

Assets that are measured on a recurring basis include the Company’s marketable securities and restricted cash. Equity securities on the balance sheet at December 31, 2020, and June 30, 2021, consist solely of shares of common stock received as partial consideration for the sale of uranium assets to enCore (see Note 3). Further, the sale of the enCore shares was restricted and resulted in the Company applying a discount for the lack of marketability prior to May 1, 2021. As of June 30, 2021, the restrictions on the sale of enCore stock have expired and the shares are currently available for

sale. The fair value of the securities now reflects the unadjusted market price of enCore shares as of June 30, 2021. With the lifting of restrictions and no anticipated lack of marketability, the measurement in equity securities is now considered a Level 1 input. The Company recognized a $1.4 million increase in the fair value of the equity securities in net income for the six-month period ended June 30, 2021.