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Prepaying is perfectly normal behaviour anywhere and the company had done it before with the same subcontractor. I see no issue with that, especially when the subcontractor needs to buy new equipment. I think Altn were surprised by the auditors stance but knowing that now will ensure it won't happen again. Anyway the subcontractor have largely worked their way through the prepaid amount and given the good production figures, it was clearly a good plan - just needed to be tied up better considering Altns a plc etc..
7, Website. When can we expect a new improved company web site?
A) The Company believes the website is generally good but the point is taken on board that that the Company needs to update and refresh the design and layout – this will be addressed.
Many thanks to poster Palisz from the other site for this update.
HawaiiFiveO, thanks for the AGM feedback. It was interesting!!.....apparently pefectly normal behaviour in Kazakhstan that isn't acceptable here. Go figure.
6) Share price & PR related question
There are a number of factors that will affect the share value of the Company. But the the current level of the share price is disappointing. From its previous level of trading and development - the current management have
been progressing the development of the Company - The Company sees the main driver to the share price as being results - it is agreed PR is an issue and this will be addressed - but we have generally found that the PR firms as
providing very little value at a high cost. The Company is currently in the process of appointing a UK based broker.
5) Teren-Sai. Significant detailed drill results here have never been released to my knowledge unlike for other miners. Any results given are in a summary form only. Why is this?
A) This is being considered at the moment - the Company is in the process of licence renewal and agreeing a detailed exploration program and a detailed RNS to outline the future developments is to be sent out once the process is complete.
4) Could the management give guidance of the expected reserve grade going forward (Latest 1.97)- in 2022/2023
A) The expected grade is 2.2 in the forth coming year - and set to rise after that but unable to give definitive time scales after that in relation to moving up-to the CPR grade - at present with the gold price at its current level, it is the
Company’s objective to maximise ore throughput.
3) Reporting continues to be disappointingly slow and minimal. In these uncertain times the company really needs
to be making more regular and timely updates. Especially drilling results, and other relevant information.
A) The point is taken on board that there needs to be an increase in the dissemination of information in relation to the feedback of the Companies activities - the current format of quarterly reporting is to be expanded to make
it more encompassing and detailed - and the aim to is disseminate the information within 4 weeks of the quarter end.
2) With Renaissance effectively out of action does the Company intend to appoint a new company broker?
A) Renaissance/Rencap were initially appointed as the Company were looking at raising finance in Russia - the broker had connections in the Russian market - the attraction was a source of cheaper funding with a favourable exchange
rate. As this market is now no longer viable - the Company has been looking at the appointment of a UK Broker.
1) Can the Company explain the background to the qualification in the audit report.
A) The Company has been progressively growing turnover year on year. In 2021 alone, the company managed to increase the sales of gold by more than 68% compared to the previous year.
In line with the Company’s plans of continuous growth and to achieve its operational objectives for the current period
and looking forward, one of Altyn Gold’s subsidiaries in Kazakhstan made a prepayment to a contractor (an external independent service supplier), for mining services which is a normally accepted practice in the mining sector
in Kazakhstan.
The contractor has been providing its ore mining services for a number of years, providing a good level of service in terms of meeting agreed volumes and the quality of services provided.
On completion of the 2021 contract a further prepayment was made to maintain the continuity of operations and further the production growth into 2022. This was to enable the acquisition for the contractor’s for additional equipment and machinery required.
The principal area of concern as noted in the auditors’ report was the prepayment made to the contractor raised the risk of non-recovery in the event of a default on the prepayment in case of their bankruptcy or other issues. The
Company did mitigate at the time in relation to the recovery of monies by way of guarantees to reduce the exposure to the issue..
In relation to current trading the contractor has already carried out works in the amount of 70% which will be offset against the prepayment amount, and the risk of non-performance or default has subsequently decreased.
Management recommendations as noted by the Auditors and the Audit Committee are being acted on and are being implemented.
In order to prevent a recurrence of the situation from occurring again the company’s management will review, develop and implement the internal control policies with respect to advance payments to suppliers of
goods or services.
By the way reason we have no update on the additional resource is because they will try flogging us that next or diluting it and selling everyone down the river in future years ! To much dodgy back room dealing go on here ! Be warned new investors the DOD infestors will take your money from you and dilute yours shares to F uk All . GLA , May the force be with you .
Probably one or two bit like the trades of today virtually nothing this what happens when you take the market for a fool .
The market is a forward thinking mechanism which these cowboys have totally trashed their reputation . A leopard does not change it spots so those who still believe will end with probably nothing . Say it as it is !or what s on the tin .
Did anyone go to the AGM?....(unfortunately not me)
I would not trust these lot one bit they have a history of lies , Directors of this company are all snakes . Look at share price always down , diluted shares , down , more dilute , Better odds going to the bookies then buying here !
Totally peed of with years on year downtrend in share price ! Worst investment ever !
They may be asked some difficult questions.....hopefully they have some sensible answers.
Seems the auditor haven't received the assurances they need to be 100% happy. Replacing an auditor in the situation could be tricky. Better for the company & investors for financial controls to be tightened going forward....but the controlling family will decide that and they might like the situation as it is.
Thanks for your input StoneFold. Personally, I'm not very concerned, marginally more so than I was before, considering the corp gov risks at any such small mining op in Kaz. Progress has been slow at Altyn but the numbers are improving and I don't see a strong argument for the Assubayevs to screw minority shareholders at this juncture.
I would not expect much to be said about Teren-Sai, until after the Kazak mining authorities have finished reviewing the documents which have been submitted as part of the application for further exploration works and proposals for production at Area No.2 .
From memory the bondholders do not have security on the mine, and are due to be repaid in December 2022. However the bank loan ( due to be repaid in September 2026) from Bank Center Credit is secured on the assets of the Group (cautious creatures those bankers).
Of the total prepayment of US$14.5m live as at 31-12-2021, at least US$8.4m has now been utilised against mining services provided to May 2022. At that rate the remaining $6.1m could be converted into better mine infrastructure by the end of September. Whether each dollar spent on expanding the mine feeds back into worthwhile increases in production is part of the investment/gamble.
Item 6 to be voted on at the AGM which starts at 11:00 tomorrow is:
" To reappoint BDO LLP as the Company’s auditors to hold office until the conclusion of the next general meeting at which the annual accounts are to be laid before the Company. "
Which either means both BDO and Altyn are happy to continue working together or that a few days later a GM will be held , the AR for year ending 31-12-2021 will be presented and a different auditor could be proposed.
With regard to the subcontractor that received the prepayments, the statement by auditors BDO that
".. two current principals of the sole subcontractor, its owner and director, have been business associates of the Group’s major shareholder ..."
Is being interpreted by some negatively, but for balance it can also be seen as a positive.
Some people who now work for company "A" previously worked with, got to know, trusted and respected, some people who now work for company "S". They trust and expect that the goods or work required will be delivered as per the verbal agreement, as maybe it has indeed been.
Of course BDO are quite correct in saying that deals should be promptly documented to eliminate later confusions, and that strict controls on what staff in subsidiaries are authorised to spend is necessary, what is sufficient for a lemonade stand may not be quite enough for a gold mine.
BDO have not resigned over it, their to big to want any issues...... no issue......
"Spike, keep it civil. You seem to be upset about the share price and are throwing big suggestions around about fraud and theft that you can't really back up."
Fair enough, I was responding forcefully to your "negativity parade" which is completely unjustified in the light of the seriousness of the situation.
In terms of my suggestions about fraud, let me be clear that in my view IF the company has not disclosed a related party relationship in its financial statements, especially one of this size, then that non-disclosure would be misleading and could be considered a fraudulent level of misleading - related party relations are required to be disclosed, regardless of the proper (or not) use of those funds in the background. The fact that this information was then omitted from the annual results released to the market is in my view appalling.
Looks like the contractor is keeping their costs down to me. If they are related, all the better!!
Spike, keep it civil. You seem to be upset about the share price and are throwing big suggestions around about fraud and theft that you can't really back up. As I said before, it doesn't make a lot of sense that the Assaubayev family would blow up this LSE listing and reputation over such small fry, especially after so many years of not doing so. The financial situation of the family is unknown but they were in the past worth hunreds of millions if not billions of dollars and as far as I know still have interests in the mining sector outside of AltynGold. It's absolutely likely that these prepayments involve a related party, I agree on that point, but at this stage it can't be assumed that the money is stolen - more likely, in my view, that the contracts will be fulfilled for mining services or whatever was intended. I'm just looking at all this and saying it doesn't make much sense to jump to the worst conclusion.
I came across this interview: https://bne.eu/interview-kazakh-gold-miner-altyngold-on-a-roll-228415/?source=russia
Why woud he bother if about to defraud the company?
If you don't like the smell of all this, by all means sell your stock. But making big unsubstatiated claims in a public forum isn't kosher.
The prepayments were disclosed in the original RNS and in pre ious years. "In relation to cash at the year end this was US$3.6m (2020: US$7.2m). Cash generation as indicated by EBITDA was much higher in the current year. The utilisation of funds by the Company was a result of a net repayment of loans and capital expenditure in the year and a substantial prepayment in relation to production facilitation for the forthcoming period. These have resulted in a drop in the cash balance at the year end, the balance is expected to increase as the prepayment is unwound and as a result of higher revenues from the increase in gold prices.
Negativity parade - have a day off. This has dropped over 20% today and trades at a PE of well less than 2 - why do you think that is Einstein?
If you can't see the issue with driving a coach and horses through any basic level of corporate governance by providing massive prepayments to associates, then I can't really help you. To then hide that from investors in the release of the annual report is just a massive redflag on top.
Sure it could be that they are utterly brainless in absolutely smashing any hope of getting market credibility and then were just a bit embarrassed about it - even that best case does not exactly provide a glowing business case.
Alternatively they could not give two hoots about external shareholders and instead it is just a vehicle for moving family wealth around, in which case at some point the listing is just an inconvenience that can be jettisoned when it becomes expedient to do so. Its not like there haven't been other frauds of london listed kazakh mining companies.
Regardless of what is happening, I'm here to make money and if the company does things that means no one will touch the shares with a bargepole, how am I meant to do that?
Look at the facts, defrauding the company to gain a few percent they dont already own just doesn't seem a likely outcome at this stage. You've offered no strong story for it either. Sorry to rain on your negativity parade.
Actually if anything the big fraud was several years ago when a huge payment and dilution happened acquiring Teren Sai. But today? Not likely at all.
"If the intention is to steal the very small part of the asset they dont already own from shareholders, they've had years and years to do this already and haven't. Why now? "
We can speculate on all sorts of things - the fact is they have gone so far beyond what is acceptable from a corporate governance perspective that who knows what comes next. Who owns the bonds that has security on the mine?
If the intention is to steal the very small part of the asset they dont already own from shareholders, they've had years and years to do this already and haven't. Why now? And why waste money on such a tidy annual report? And why waste money on Renaissance Capital research coverage if that was the intention? Indeed why waste money on a decent audit firm in London and listing on the main market? And why would people with such quantum of wealth bother with such a half baked and limited value fraud? Wouldn't they first accelerate the company, funded with plenty of foreign credit/equity, then steal it when there's something valuable they dont own to steal? They already own almost the entire company - they're stealing from themselves. Nah, I don't agree this is fraud at all and your assertion is far fetched - it is not obvious at all that theft is what this is.
But I do appreciate your reading of the annual report and highlighting what you found - and I do agree it does smack of **** governance and controls. But it's Kazakhstan.