RE: Q3 done.1 Oct 2018 23:12
Accounts in the mining sector, particularly at the end of the ramp up phase and beginning of the commercial production phase, are very complex. What we all need to appreciate is that at the end of 2017, which was the construction phase of the project, HUM's cash position was very healthy around $40m as they drew down the remainder of the loan facility and they were still paying for various elements but not the full capex invoices would have been issued to HUM.
The trade payables at $33m is more than likely capex from the construction phase not yet cleared at the end of 2017. They were projected to be around $10 - $12m if i recall but they never got that low in their cash reserves as was reported at the end of 2017, Obviously cash then started to be generated whilst still paying for invoices. I recall one of the presentations out at Yanfolila where one of the analysts was asking about cash position and capex outstanding and the above was the general / loose explanation (obviously they couldn't go in to great depth on the matter), also the TSF (Tailings Storage Facility) was still under construction in March of this year, so a lot of capex to be cleared from that and boy is that some facility......simply astounding the size of the man made lake and dam that they managed to build within the $88.5m!
HUM knew full well they had built and commissioned the mine and plant on time and on budget as Shaun Bunn colourfully outlined to the analysts he also reiterated that they had not finished paying for it all. Hence the reason for the high "trade and other receivables" as shown on the interims as $33m, this should be considerably lower on the year end results and we will see a more clearer financially robust set of results!
Sign In
Follow the stocks
