Member Info for SAGACITYRULES

Hopefully a BoD reorganisation. Go woke, Go broke!

Superc - I am sure that your comments are correct. The danger of doing business in Moz is the same as any African country. But the way the Labour party is acting in the UK, is there much of a difference? I think not.

The deferment, suspension and cancellation might be a more accurate description, is undoubtedly a contributory factor. It clearly indicates that the management do not know what they are doing, production down and sales down. When will they start to perform and talk the company up. With respect, the investing public do not care that they are now growing more turnips in the community garden! Priorities are wrong.

I would suggest that the market is looking at other considerations in addition to the failure to finalise the agreement with Moz Government. Perhaps performance declining and the fact that the BoD is spending significant effort to depress the value of the company may be contributory factors. They complain that sales at value are hard to come by. They only have 7% of the market which leaves 93% of traders to pitch to. Speaks for itself in my book. Excuses are easy to come by. But they never discuss the reasons as these may represent a critique of the management. If I was a major shareholder, which I am not, I would be spitting nails and challenging the management to improve or move over or on.

Super - But ticking to what?

Super - I had previously taken the credibility up with the FD. I requested sight of the computation. I was told the calculation could not be released or published because it was "confidential". We should now prepare for further impairment charges until the assets are presented as being worthless.

Super - Having spent over 50 years in auditing and accounting, I am fully aware as to the "true and fair view" obligation . However, as the historical accounting convention applies, whereby assets are not revalued on an annual basis, guessing asset values should have no place in the balance sheet without the calculation and its effect being appended as a note or even expressed as an alternative to historical cost. You cannot have both in the same set of accounts. I do not believe that an impairment charge should have any place in a balance sheet prepared on the historical cost convention basis.

Super - If the entry is irrelevant without implication for the financial viability of the company, what is the purpose of the exercise? My problem is that the computation is based upon forecasts for the future trading. Is my understanding correct that if the review is undertaken by a pessimist, a lower value will be arrived at than a computation by an optimist?

A thought has occurred to me that following the impairment provisions whereby the management considered the balance sheet value of the company's assets were overstated, (a load of rowlocks, in my view), there must be doubt as to the financial strength of the company. This is especially so in the light of trading losses recorded in recent accounts and the situation arising from the USA/Iran war. Convincing the Moz Government of the financial stability of the company must be more difficult. The BoD must now regret that they undertook the theoretical and highly speculative review that indicated the requirement for impairment costs immediately following a period of substantial capital expenditure. Such negative PR.

It would have been astonishing if KMR had failed to meet the revised production guidance issued in December. It also has to be borne in mind that the revision in December came on the back of an earlier revision a couple of months earlier. Forecasting is not the forte of this BoD.

Yet again, the management seem hell bent on driving down the value of the company's net assets with an increased notional estimated crystal ball computed impairment charge of $300M. The BoD should concentrate on driving up the value of the company, not trashing it. An impairment charge, which is in addition to the customary depreciation charges at rates established over many years, is a totally notional calculation . The calculation is based upon a number of assumptions and anticipated future events which may or may not arise. If the data upon which the forecast is based is overstated, the requirement of any impairment charge, additional or otherwise, will equally be wrong. It is crystal ball forecasting. Given that the production forecast/guidance for 2025 had to be not once but at least twice, the ability to forecast forward over a period of 5 to 10 years is highly dubious. In essence , it suggests that the value of the recent capital expenditure on the provision of new plant and assets was worthless.

The BoD should be required to fully reveal and explain the statistics upon which the impairment charge was computed. They should also be requested to confirm that their bonuses will be similarly 'impaired'.

Rich - Thank you, I now understand. Does 80m have any connection to KMR?

Greeno - Excellent, but which stock, not KMR?

Greeno - What is up 50%?

Proph - Oh happy day!

Sadly for you, Smoothbrain, it's an even better bargain today. Am I correct, this is the lowest the share price has been in 5 years? If the BoD wanted to return the sp to former levels, all they need to do is resign. Happy Christmas!

Greeno - It was further bad news. Production forecast has been reduced from 930k-1050k to 870k-900k 0n 18 November, and a little over 30 days later to 830k+.

The financial results for 2025 now wholly rely upon the level and value of sales for the year and the level of commissioning costs which are capitalised. There is a technical case for arguing that the commissioning costs should be capitalised and depreciated over the estimated life of the plant, but I bet they will do the opposite!

I do not believe that the BOD have any intention of seeking the renewal of the licence until MC disappears from the stage. Same old talk it down approach - we have completed the upgrade, except for some improvements which we did not think we would be responsible for? Which planet?

Tambo - Are you able to translate "Driving stronger growth by focussing on our right to win"?

If there are tow options for saying anything, one positive the other negative, the latter always seem to prevail! "The upgrade elements of the project will then be substantially complete" as all that was needed. The comment "bar minor process improvements" conveys that there is doubt. I would have thought that KMR are always on the look out for and implementing minor process improvements as a matter of course. The comment introduces negativity into the announcement. The reduced level of production in the guidance was sufficient of a negative. It was unnecessary as was the asset value write off.

On - Unless the future agreement contains a clause to the contrary, I would expect the agreement to contain a clause retaining the right to approve or disapprove the bidders. Once the bidders are approved, the agreement would stay in place. The agreement will lay out the options should the bid be allowed to go ahead without the Moz government approval.

With the sp being so low, it would make inestimable sense for an interested party to launch a speculative low ball bid, hostile or not. It's a perverse situation. The BoD have been acting irrationally, in my view, making pessimistic announcements. The two most recent involving a potential 'bad debt' and writing down the value of the assets on an accounting whim, does not instil me with confidence in their ability.

ThePope - For the Moz Govt, there is little incentive to sign the new agreement. They are collecting royalties with or without the agreement. By not signing an agreement, the Govt cannot be accused of making a mistake.

From the point of view of the KMR BoD, they know that nobody is going to come in with a bid to take over the company until a new agreement is in place. Witness the approach by MC. It is in the interest of the BoD to delay as long as possible. Just making observations!