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You did it again
You spoke to yourself using the wrong multiple user account you own.
I am convinced that the CASA loan is included in the cash equivalent and that is why it is quoted in dollars whereas it is normally pounds.
I am not sure what the legal standing of an investor call is as anyone can err in a fairly informal discussion. The deeper drilling was known about prior to the IC and the acquisition is being funded by the issue of shares.
The tweet on the 10th March
https://mobile.twitter.com/ArcMinerals/status/1369551092762243076
Followed by the placing 2 weeks later could be explained by the fact that the loan note was originally due to mature on the 19th March.
Spot on Seis Nav, fully funded for 2 season of drilling on some of the best copper targets in Africa.
Only a mug would be selling now.
What I have learnt, by having accounts prepared, is that accountants are always interested in 'the situation at the time'.
Seis - It may have been true when it was said.
Slurms - It goes in cash equivalents because that is the situation at the time (if maturing within 90 days which it was - at the time).
Dartron - Hence why it was 5M on 29th June, then they revised the deal and lowered their cash equivalents. Very clever.
Night all.
Barking up the wrong tree with regards Casa loan not I am afraid. Loan note only becomes appilicable upon closing of deal. As per below deal I'd not closed. No way Arc could include Casa loan note in cash and cash equivalents.
5th May RNS
"the Transaction, which is subject to customary conditions to closing, including approval by the TSX Venture Exchange and completion by Rackla of a minimum financing of C$5,000,000. Shareholders should note that, until the conditions to closing are satisfied, there is no certainty that the Transaction will be completed or that Arc will receive any consideration from the Transaction."
https://youtu.be/GsEPEVv8RCQ
Just after 24 minutes in. Remy specifically answers this question, he says that we have enough cash to run to the end of 2022 not including Casa payments. Clearly this was before the placement to cover the deeper drilling program / acquisition but that doesn’t change the fact that they were not including potential Casa payments in the cash balance.
My reading is suggesting a loan note is nothing more than a formal IOU. It's not a cash equivalent, I can't find any definition of cash equivalents that would include a loan note.
This is not a hill I'm willing to die on but for me there is no evidence the Casa note has been accounted for.
It reads to me that the casa deal was revised (RNS 5th may) so the old 5M loan note which would have been cash equivalent on the date of the statement (RNS 29th June) is now revised to 3.5M Loan note + 0.75 + 0.75.
Assuming the deal has not closed yet, then cash equivalents should now be 1.5M less than stated on 29th June. (Pretty clever trick IMO) However on close of the deal 1.5M arrives by 90 days from close. (0.75 at close, 0.75 90 days later).
But hypothetically where else can you put a loan note that matures within 3 months other than cash equivalent.
The casa notes are not included in the cash equivalents. So, hopefully soon we'll have the $5.3m currently in the bank plus the casa payment, and maybe news to boot.
Agree Seiz. Going down a rabbit hole IMO but one that isn't even a hole, . Anyway I'm done for today.
That's just my opinion.
GN atb
Ahh, you guys have made me open my book a week early.
If anyone is wondering the book looks like a good starting point. The idea of the book is to explain the financial statements, and what that then means to investors. Appears to have some well known companies as examples.
I think Ella's post was correct:
Cash and cash equivalents is a line item on the balance sheet, stating the amount of all cash or other assets that are readily convertible into cash. Any items falling within this definition are classified within the current assets category in the balance sheet. The two primary criteria for classification as a cash equivalent are that an asset be readily convertible into a known amount of cash, and that it be so near its maturity date that there is an insignificant risk of changes in value due to changes in interest rates by the time the maturity date arrives. '
The book says "cash and cash equivalents include money on deposit, with a maturity of 3 months or less, companies can hold cash in several currencies".
I might look at the final year results for a company like CAPD, who probably have convertible loan notes, and see where they put them. Ill let you know.
In the last investor call it was clearly stated that we are fully funded to the end of 2022 (budgeting for the deeper drilling program included) and there would also be extra cash to come from Casa payments which suggests to me that one is not dependent on the other.
Not an accountant Ella, although from time to time I work with the industry.
Any knowledge (or lack of) regarding commercial paper is down to me reading up on something called Tether in the crypto world (could blow Madoff out of the water).
im looking, give 20 mins. boys bed time.
Don't suppose you could flick to the index and see what constitutes cash equivalents for us before you go on holiday lol
Interesting thread guys. I just bought 'Understanding company financial statements' RH Parker penguin business books. Easily pick up a copy on Ebay for under £10. I am waiting to go on holiday to read it. Im sad as fk Lol.
Slurms,
I believe the reason why cash and cash equivalent is quoted in dollars is due to the fact that a future exchange rate for the dayte of maturity is unknown but it is possible to convert our cash balance to dollars using the exchange rate valid at the end ofay.
Yes I suppose there's no requirement for them to divulge further into what constitutes the cash equivalents. Would be nice to have some clarity on the casa situation, the optimist in me wants to believe it will happen, but the realist in me pours doubt over it.
Emails to random individuals means nothing on aim. Wtf.
Id hardly call emailing NvS a random individual. As for means nothing, it would mean more than anyone else can guess at here. Including you.
The point being made Ella is that you won't determine anything here. Lol you need to ask them what it means. Otherwise it's guesswork
TrickyTree,
I asked for the issue of the loss of the Kalaba mining licence to be clarified via an RNS. I did get an email response but it didn't address the issue (even within the email). Emails to random individuals mean zero on AIM. There are numerous issues that need clarification via RNS. The company has told us their cash and cash equivalent and I cannot say it is incorrect or misleading therefore the company does not need to issue clarification. I am just trying to determine what it means.
Well the casa loan note could well fall into that definition...
I suppose there could be a potential for the casa loan note to be classed as commercial paper and thus be included in the cash position but.....and it's a big but....this is all pure speculation on Ella's part until it is clarified with the company. I cannot understand why you haven't communicated with them all of your concerns ( some of which are actually justified) and see if they answer. I'm sure the majority on here would be as eager as yourself to find out their response, I certainly would be. ATB
Slurms,
I think your comment is valid. However I still think the CASA loan note has been included as a cash equivalent. Are you an accountant? You appear to know more about cash equivalent that I do anyway.
'Cash and cash equivalents is a line item on the balance sheet, stating the amount of all cash or other assets that are readily convertible into cash. Any items falling within this definition are classified within the current assets category in the balance sheet. The two primary criteria for classification as a cash equivalent are that an asset be readily convertible into a known amount of cash, and that it be so near its maturity date that there is an insignificant risk of changes in value due to changes in interest rates by the time the maturity date arrives. '
I thought they had to be tradeable to be classed as commercial paper.