| Schedule of Fair Value of the Assets Acquired |
The
following table summarizes the acquisition date fair value of the assets acquired and the liabilities assumed:(1)
| Assets acquired | |
| |
| Property, plant and equipment(2) | |
$ | 2,600,000 | |
| Intangible assets: mineral rights(3) | |
| 30,100,000 | |
| Total assets acquired | |
$ | 32,700,000 | |
| | |
| | |
| Liabilities assumed | |
| | |
| GSR royalty liability(4) | |
$ | 2,700,000 | |
| GSR contingent consideration liabilities(5) | |
| 17,100,000 | |
| Asset retirement obligations(6) | |
| 12,900,000 | |
| Total Liabilities assumed | |
$ | 32,700,000 | |
| (1) | The
liabilities assumed and assets acquired include a mandatory 10% non- controlling interest to be held by the Government of Ghana based
on Ghanaian laws. |
| (2) | Property,
plant and equipment includes land, building and processing equipment excluding mobile assets. Property, plant and equipment are measured
at fair value at the acquisition date. The fair value was determined by the evaluation and combination of the open market approach, comparative
method and the present replacement value approach. The fair value was then adjusted based on relative fair value as compared to the other
assets acquired. |
| (3) | Mineral
rights are measured at fair value at the acquisition date and determined by the net present value of expected future cashflows. Key assumptions
in the income valuation method include long-term gold prices (average gold price of $2,006/oz), level of gold production over the life
of mine (3,885.4 koz), tonnes of ore processed (76.7 Mt), operating and capital expenditures and a 17.0% discount rate. The fair value
was then adjusted based on relative fair value to match the consideration paid being the liabilities assumed. |
| (4) | The
liability is recorded at fair value at the closing date determined by the net present value of estimated future obligations using the
same expected future cash flows associated with mineral rights using an appropriate credit adjusted discount rate of 10%. |
| (5) | The
fair value of the liability was determined using the Black Scholes Merton Model at the closing date. Key assumptions in this model included
remaining life (3.6 — 6.0 years); risk free rate (4.3%-4.4%); and cost of debt (17.6% – 18.3%). |
| (6) | Asset
retirement obligation represents the fair value at the closing date associated with the estimate of cost to return the mines to their
original condition upon disposal. The estimate was determined using the present value technique based on forecasted remediation costs
at end of life of mine (incorporating an appropriate inflation rate), and development and application of an appropriate credit adjusted
discount rate, 12.5%. |
|