Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
https://www.thermofisher.com/blog/mining/from-tailings-to-treasure-a-new-mother-lode/
Mining companies normally incur significant costs at mine sites after the minerals have been
extracted and the mine is closed. Such costs include those to remove plant and other facilities
and to restore the area in a manner required by law or in accordance with a company’s own
accepted practices. In addition, reclamation and other environmental obligations frequently
arise during ongoing operations. The question is how to account for such costs.
The options are to:
• Expense costs as incurred
• Accrue costs by incrementally increasing a provision
over the life of the mine
• Provide for the present value of the total future costs
expected to be incurred in making good past damage
and other related closure costs when the obligation is
incurred. The amount capitalized is then amortised over
the life of the mine
Historically, asset removal and site rehabilitation costs
were charged to expense at the time that they were
incurred. This practice was accepted because the costs
were significantly lower than they are currently and there
were few regulations requiring companies to rehabilitate
sites. The situation today could not be more different.
Governments have introduced stringent environmental
and rehabilitation requirements, the public as a whole
has become more environmentally conscious and
demanding, and mining companies themselves have
introduced their own codes of environmental practice.
The result is that the future cash outlays can indeed be
significant.
In 1999 the International Accounting Standards Board
issued IAS 37 Provisions, Contingent Liabilities and
Contingent Assets. The same standard was issued in
the United Kingdom as FRS 12.
It depends what multiple you apply to earnings and the business plan.. the three year plan suggest earnings over 35m a year.. this is not priced in.. the current year results will help support the assumptions and future projections... The business is growing and therefore SP will move accordingly..
Sorry... what do you mean front end loaded... You can't pick and choose how you depreciate assets.. It's an accounting principle and it is depreciated according to its useful economic life... some machinery three years.. plant could be ten years
I disagree.. both have relevance... for a growing company who are active in acquisitions.. I tend to look at this measure.. the retained losses are largely historic... Also the capital expenditure on hernic is recoverable.. therefore the company have been advising of project earnings and you can correlate the capex spend against the earnings... what are you expecting from JLP?
.. JLP made a cash profit in last financial year.. EBITDA of 3.3m at 23pc EBITDA margin. Given JLP are investing heavily in infrastructure, EBITDA is a better measure and this figure will be higher due to facts in my previous post. The market will be more concerned with cash conversion and operating margins.. this should indicate how transferable our expertise is on new projects
We received the 6 month financial statement on March 7th last year... these could look very healthy for the 6 months to December 18... we broke even y.e 31st June 18.. this will show a great set of numbers including record hernic earnings.. this could land any day next week...