Member Info for JRC1000

The most important first step going forward has got to be the appointment of Auditors, who may be enticed with the (likely very lucrative) investigation work. Until that's dealt with I can't see the H1 Results being published and it may even be that all 3 previous years' result have to be restated in accordance with a revised model. So I wouldn't be surprised if our next set of audited accounts will be the Full Year 2020 issued early next year. In the meantime we can only hope that we get some statement of the new Board's strategy, positive support statements from UGC and Everest, and regular production updates.

Exactly what do we expect a forensic investigation to achieve which ultimately benefits the Company? Are we expecting it to uncover fraud (with some likelyhood of recovering monies or being awarded damages)? Are we expecting to discover secret, unaccounted for but recoverable, stashes of gold or cash?

Or can we just expect a very expensive review of Board management decisions on acquisitions and financing arrangements which ultimately the Company cannot do anything about other than through even more expense.

Unless there's some real financial benefit through recovery of monies or cessation of dubious payments then what's to be gained. Better to concentrate on strengthening the Board and getting some effective auditors appointed to clarify the accounts and report more transparent H1 results.

First order of business for whoever succeeds needs to be the appointment of auditors and publishing of H1 results.

There are just too many moving parts at present, some of which are very positive such as Gold Price, increased output, reduced energy costs, Exchange Rate, and Bond Conversions (irrespective of their dilutive effect). But these are all suppressed by the uncertainty surrounding the Board disruption and the resurrected spotlight being shone on accountancy opaqueness, and I suppose the best outcome would be for the settling of the former to sort out the other. Whichever way you look at it though, I think the general consensus is that there is a good deal of pressure building behind the SP.

And another thing, L3. Do we know what value is attributed to the gold we use to repay Gazprombank? At base cost, a fixed price, a discount to Market Rate, or full Market Rate? Come to think of it, at what is inventory valued? Under the usual accounting rules, inventory is valued at the lower of cost or NRV (net realisable value) and therefore any profit is only booked when invoiced/sold.

L3Trader - Thanks for the analysis but (and please be gentle with me) why do we need to bank-finance a product which we are producing. I understand that we have costs such as refractory ore, energy, processing overheads etc, but the output is inventory which has a far greater value than the sum of the inputs - i.e. Gross Profit and whether it's sold at market rates or increases the stock held at an agreed rate then it should still be Profit in the P&L. You then seem to be equating Trade Payables to Sales and Stock values, but surely Trade Payables would only equate to Cost of Sales (including finance costs). Like Rusty, I just can't get my head round this because whichever way you look at it, our net return appears minuscule compared with our output and market price of gold.

Workingstiff - UGC statement reads...."UGC has converted bonds of a principal amount of USD 28,400,000. UGC expects that the Company will not exercise the cash alternative election but will allow all shareholders to convert into shares and to be treated equally in accordance with the recent Court Order".

Rusty - Workingstiff. You're right - I knew I was ignorant of the complicated nature of the Bond arrangements (like the accounts generally), but I'm totally intrigued if this results in a 'loan' of $28.4m translating into a redemption cost of $100m when the shares wouldn't even be worth that at today's price.

I think I've mentioned before that I've been used to translating and working with some fairly complicated accounts and debt instruments in my time including petrochemical industries (exploration, processing and distribution), but I've failed miserably to assemble a meaningful summary of POG's financial situation and ultimate liabilities.

Hi Rusty - I was just relating to their announcement where they were encouraging the issue of shares rather than the cash alternative. The Company probably has adequate funds on hand to cover the requirement and could then take their time deciding if they need to replenish it - new loan facility, rights issue - in fact the Bond deal is so onerous that it would seem virtually impossible not to improve on the alternative of issuing so many new shares (not to mention the enhanced voting rights).

It may be interesting if the Company decided to pay in cash by negotiating a much more favorable loan facility compared with the bond terms.

I don't think I've read anything yet which actually defines the combined increase represented by just the 2 parameters mentioned, but the 42% production increase and the 27.5% rise in Gold represents a compound 81% increase in value output. Then there'll be fuel, currency, overhead amortisation etc benefits on top, not to mention the current additional Gold increase going forward.

It will be interesting to see what effect the Wall St. open might have this pm.

I, personally, will be looking for a restatement of accounts for more clarity regarding various payments, provisions, and stock movement/valuation. Not that I expect any improvement in the bottom-line or even cash balances, but far more simplicity/transparency of accounts is required to deal with what must be significant cash generation already this year.

Any investigation into the financial affairs of a company usually has the effect, at the very least, of suppressing SP growth, so I guess we can look forward to very little positive movement until this is quashed or helpful findings revealed. Either way, I find it difficult to understand what material benefits would be expected apart from those already achieved by calling for such an investigation in the first place (suspension of any dilution plans, cheap acquisition of Company etc). Perhaps one positive outcome would be for it to solicit a realistic offer for the Company to avoid this debacle.

Now that the temporary Directors have been confirmed in their position, can we now expect the release of Interim Results which, in themselves, must represent a significant element of the information we require to make informed decisions regarding the upcoming vote.

Clearly the other thing they can't do is issue Interim Results or even correct the date published to provide them!!

A clear, simple explanation of where we're at and the action we need to take for, hopefully, our benefit.

Perhaps the release of H1 performance would be sufficient validation for retaining old BOD.

With all of these shenanigans, do we think it likely that we can still expect an H1 Review later this month?

I've been used to what I always considered quite complicated YE accounts when involved with the Oil Industry (exploration, extraction, refining) and a few major construction projects across several countries. For Holdings Company board meetings I've always managed to summarise P&L and Balance Sheets down to no more than 4 sheets of A4. But I've failed miserably to achieve the same for POG, so I'm somewhat encouraged when even seasoned shareholders on this bulletin board speak of opaqueness. Such unnecessary complication, duplication, and obfuscation must inevitably lead to suspicion of motives.