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VAT is being accrued at $.6m a month therefore VAT $20m outstanding on the balance sheet is up to 33 months old.
They have moved it from current assets to non current assets. As someone has opted to put VAT receivables into non current assets then I expect that the $.6m a month VAT due will be treated the same way, a $7.2m loss to start off the new year.
After being so upbeat about receiving VAT in the Videotapes why on earth did they move it, as it shows they didn’t have the funds to buy Acacia Kenya and that’s why they were forced to extend the loans and pay Barrick the balance in in shares. (16% of the company).
Financing for Singida is expected to be secured in the coming year. ..... from where? I thought it would be from the PROFIT
Incorrect. The aim is to fund Singida by floating a portion on the local stock exchange.
The Baron seems to see things totally different to those on here, all positive. Is he looking at things through rose coloured specs?
https://twitter.com/barondaytrading?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor
That was my expectations until they fudged the 2019 results. They should have made a profit and kept the VAT on current assets and cooled on the depreciation and pushed the hedging forwards. It would all have came good in the end.
Barondaytrading has bought into Shanta so is unlikely to view it negatively. He actually carries some weight so will want to present a positive picture. That said, I tend to agree with him on the whole. The key thing to look at here (and, to be honest, any miner) is cash. Everything else is irrelevant. Miners are capitally intensive so depreciation will be an ongoing significant factor. The fact it that debt/cash position has improved markedly and is likely to continue to do so.
Moving the VAT to non-current was always likely given the length of time it has been going on for and the fact that the company is run by accountants! It doesn't mean that they have given up on it. Far from it. I am actually more interested in the nature of the tax charges that "reflects brought forward tax losses on key mining licenses no longer being available".
They really have used these accounts to recognise every write down that they can.
Regarding the hedge, I don't know how many times I have written this over the years. It was a requirement of the debt funding that they hedge. In addition, they were coming up to a period of debt maturity and the last thing that they wanted was to be in a position when a downturn in the gold price prevented them from being able to make payments. That would have necessitated a call on the market at a time when the share price was suppressed. The one thing they did that didn't make much sense at the time was significantly increase the size of the hedge. That was unnecessary to achieve their debt repayment aims and amounted to a bet on the gold price. One that has backfired somewhat.
Thanks for the reply Daisan. I'm only in small here, SRB and POG now. Had been selling my larger holdings as needed the money for property renovations/repair and got out of my last big holding FXPO on Monday morning. Haven't dared have a peek at my pension pot mind. Fortunately (or unfortunately) retirement is probably a few years away for me so hopefully time to recover.
Repression,
Fortunate timing! I suspect that your gold mining investments will pay off over time but don't be surprised if they take a hit in the short term. Whilst it is too early to say that this market correction is turning into a bear market (20%+) it is indeed possible and everything will go down with it until the market stabilises and investors can view things more sensibly. If this is the 'big one' (and the markets are stretched enough for that to be the case, particularly the US which I consider the most overvalued market I have seen in a long time) then I would expect a similar story to 2007/8 to unfold with the gold miners rising the strongest from the ashes.
Thanks Daisan informative postings. Ím not sure if anyone covered off the VAT accrual length, but the 0.6 monthly accrual figure that is current is far far less than that that used to be accrued on a monthly basis and it will continue to be this lower figure going forward.