RE: Results30 Jun 2022 00:10
I would not expect much to be said about Teren-Sai, until after the Kazak mining authorities have finished reviewing the documents which have been submitted as part of the application for further exploration works and proposals for production at Area No.2 .
From memory the bondholders do not have security on the mine, and are due to be repaid in December 2022. However the bank loan ( due to be repaid in September 2026) from Bank Center Credit is secured on the assets of the Group (cautious creatures those bankers).
Of the total prepayment of US$14.5m live as at 31-12-2021, at least US$8.4m has now been utilised against mining services provided to May 2022. At that rate the remaining $6.1m could be converted into better mine infrastructure by the end of September. Whether each dollar spent on expanding the mine feeds back into worthwhile increases in production is part of the investment/gamble.
Item 6 to be voted on at the AGM which starts at 11:00 tomorrow is:
" To reappoint BDO LLP as the Company’s auditors to hold office until the conclusion of the next general meeting at which the annual accounts are to be laid before the Company. "
Which either means both BDO and Altyn are happy to continue working together or that a few days later a GM will be held , the AR for year ending 31-12-2021 will be presented and a different auditor could be proposed.
With regard to the subcontractor that received the prepayments, the statement by auditors BDO that
".. two current principals of the sole subcontractor, its owner and director, have been business associates of the Group’s major shareholder ..."
Is being interpreted by some negatively, but for balance it can also be seen as a positive.
Some people who now work for company "A" previously worked with, got to know, trusted and respected, some people who now work for company "S". They trust and expect that the goods or work required will be delivered as per the verbal agreement, as maybe it has indeed been.
Of course BDO are quite correct in saying that deals should be promptly documented to eliminate later confusions, and that strict controls on what staff in subsidiaries are authorised to spend is necessary, what is sufficient for a lemonade stand may not be quite enough for a gold mine.
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