Assets Held For Sale

12 Months Ended

Dec. 31, 2023

Asset Retirement Obligation Disclosure [Abstract]

Assets Held For Sale

Assets Held For Sale

As of December 31, 2023 and December 31, 2022, the Company’s Assets held for sale was comprised of equipment not-in-use of $7.1 million.

In August 2022, the Company entered into an Equipment Purchase Agreement to sell one ball mill and one semi-autogenous (“SAG”) mill for consideration of $12.0 million. The Company amended the Equipment Purchase Agreement in December 2022 to include one sub-station transformer (collectively, “Equipment”) for an additional amount of $1.6 million for a total amended agreement amount of $13.6 million of which the Company has received payments totaling $1.1 million through year end 2022. Under the terms of the agreement, the final payment was due December 31, 2022, and the buyer was permitted to extend the payment for all or any portion of the final payment of $12.5 million up to and including June 30, 2023 provided that the buyer paid the Company interest at a rate of 5% per annum on any outstanding balance for the ball mill and SAG mill from January 1, 2023, through March 31, 2023, and 7.5% per annum on any outstanding balance from April 1, 2023, until June 30, 2023. As such, the Company received required, monthly interest payments totaling $0.8 million and Nil for the years ended December 31, 2023 and December 31, 2022, respectively. The buyer has never been delinquent in making principal or interest payments. In addition, the agreement requires the buyer to reimburse the Company for certain holding costs related to the Equipment. These costs are recorded as an offset to the expense included in the Consolidated Statement of Operations.

The Equipment Purchase Agreement was subsequently amended three additional times in 2023 (January 27, 2023, May 15, 2023, and December 29, 2023) and the final payment period was extended up to and including June 30, 2024. Together the original agreement and the four amendments make up the entire agreement and allows for the sale of some or all of the Equipment to third parties and for the buyer to terminate all or a portion of the Equipment Purchase Agreement and the Company received non-refundable deposit payments totaling $0.5 million in the year ended December 31, 2023, for a total of $1.6 million received to date. As of December 31, 2023, the outstanding balance related to the Equipment Purchase Agreement was $12.1 million. Effective March 1, 2024, the buyer terminated a portion of the agreement. See Note 26 – Subsequent Events for additional information.

As of December 31, 2023, the remaining Assets held for sale that are not included in the Equipment Purchase Agreement discussed above are being marketed for sale. The Company has received interest from potential purchasers. It is the Company’s intention to sell these assets within the upcoming year.

A summary of the Company’s completed sales of equipment included in Assets held for sale during the year ended December 31, 2022:

•In February 2022, the Company completed the sale of a regrind mill for gross proceeds of $1.3 million.

•In August 2022, the Company completed the sale of the mine equipment for gross proceeds of $0.1 million.

•In December 2022, the Company completed the sale of the dual pinion ball mill and related assets for gross proceeds of $6.3 million, reduced by a commissions expense calculated as 17.5% of total gross proceeds less certain other selling expenses.

As of December 31, 2023, the Company still held title to and risk of loss of the one ball mill, one SAG mill, and one sub-station transformer and, as such, all payments received toward the purchase of these assets have been included in Contract liabilities. See Note 11 – Contract Liabilities below for additional information.

As of December 31, 2023 and 2022, the Company estimated the fair value of the Assets held for sale and determined that the fair value estimate exceeded the carrying value and as such no impairment loss was recorded.