FAIR VALUE ACCOUNTING

9 Months Ended

Sep. 30, 2021

FAIR VALUE ACCOUNTING

FAIR VALUE ACCOUNTING

NOTE 15 FAIR VALUE ACCOUNTING

As required by accounting guidance, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Warrants

Upon initial recognition, the warrants received as part of the asset sale to Nevgold (Note 5) were valued using the Black-Scholes valuation model as they are not quoted in an active market. The warrants have been accounted for as equity investment at cost. Average volatility of 94.6% was determined based on a selection of similar junior mining companies. The warrants are exercisable upon receipt and have an exercise price of $0.60 per share and expire June 23, 2023. As of September 30, 2021, no warrants related to the Nevgold transaction have been exercised.

Assets and liabilities measured at fair value on a recurring basis.

The following table identifies certain of the Company’s assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy as at September 30, 2021 and December 31, 2020, as reported in the Consolidated Balance Sheets:

	Fair value as at September 30, 2021						Fair value as at December 31, 2020
	Level 1		Level 2		Total		Level 1		Level 2		Total
Marketable equity securities	$	1,636	$	—	$	1,636	$	—	$	—	$	—
Total investments	$	1,636	$	—	$	1,636	$	—	$	—	$	—

Marketable equity securities that the Company holds are exchange-traded and are valued using quoted market prices in active markets and as such are classified within Level 1 of the fair value hierarchy. The fair value of the investment is calculated as the quoted market price of the marketable equity security multiplied by the number of shares held by the Company.

The fair value of financial assets and liabilities held at September 30, 2021 were assumed to approximate their carrying values due to their historically negligible credit losses.

Debt is recorded at a carrying value of $48.7 million (December 31, 2020 – $48.2 million).  The debt is not traded on quoted markets and approximates its fair value based on recent refinancing.  

Impairment of Mineral Property

During the nine months ended September 30, 2021, there were no indicators of impairment for the Company’s long-lived assets and the Company did not record any impairments. During the nine months ended September 30, 2020, the Company recorded an impairment of long-lived assets at the Gold Bar mine totaling $83.8 million using Level 3 inputs.