hey Hairyback I found this, have a read question 2 Re : Van Mag
Many thanks for your email and for taking the time to raise these issues with me.
The Company's reporting of its position is entirely transparent, and over the past month shareholders have received both the audited annual accounts and last week the quarterly report.
The quarterly report clearly set out the earnings for each mine and the group as a whole. Costs were broken down on a unit basis for each mine and in total for each mine and again the group as a whole. Shareholders were able to see the level of profitability of each operation and also see the corporate costs both in South Africa and Australia, and on the latter the reductiosn that the company had achieved over teh past quarter.
Many have questioned the company's ongoing viability for a number of months, however we are not closing our operations or scaling back our exploration or mining activities. We continue to operate profitable mines and are close to bringing a new mine into production which has the potential to increase the groups earnings given its lower cost profile, hedge program in place and has first coal scheduled for later this month. This is in stark contrast to a number of other coal companies across the world both major and junior who have either closed operations or suspended or delayed new mine developments - I note todays announcement by ZYL for example and also IKW's quarterly.
Share price performance is appalling and I would like to believe that we could go against the tide. Unfortunately despite strong operating performance that is not the case and we have fallen to record lows over the past 12 months, at a time when most coal stocks have fallen on average by 70% and for those with a South African exposure by approx 80% (CZA, IKW, ZYL and UNV for example).
In regards to your specific questions:
1. The A$50m loss is broken down in detail in the annual financial report that was signed off by our auditors. Detailed notes to the Statement of Comprehensive Income are provided. In summary despite recording a gross profit of A$13.5m and with other income of A$6.1m (mostly derivative/hedge based) a net loss of A$49.9m was reported. This was after A$20.1m of finance costs (interest on convertible notes and principal repayments to EDF and a royalty expense - please note the royalty expense was previously reported as a contingent liability and is only payable on production and was reclassified this year to reflect a ruling on amongst things FMG's treatment on a finance linked royalty). Impairments to non-core assets of A$19.9m were made at the parent level to assets that were previously impaired in the previous financial year at the subsidiary level and were done so following a review of previous resource reports on the assets. Administrative expenses of A$20.1m were also incurred during the year including A$4.9m of employee and director costs, share based payments of A$4.2m, director termination payments of A$1.7m as well as depreciation of A$3.3m and foreign exchange loss on the shareholder loan of A$1.9m. Many of these costs including consultant costs that were incurred were one off payments associated with a number of new mine developemnst or initiatives undertaken.
2. An update to the VanMag sale was included in the quarterly report and its is anticipated that the settlement of that process will take place this quarter as advised. Yes, I know, heard that many times before, and so have I and yes it is a frustrating exercise that we all would like to conclude. Nothing more to it other than a much delayed settlement process that has involved a number of parties and approvals. Nothing more than that and as said would dearly love to be in a position to confirm that that settlement has been made this quarter.
3. Our quarterly update confirmed that proposals had been received and that the Board and its advisors were reviewing them and would update the market accordingly once it has finalised its process. Clearly the proposal received had been made following a significant due diligence process that they completed using a number of legal, technical and fianncial consultants. A review and analyses of these proposal is not completed overnight and as with many such processes requires management to review in detail the associated terms and conditions. This process, as advised in our quarterly report is ongoign.
4. Not sure where this idea has come from, but no such guarantees have been made, requested or will be enetered into. There is no need to.
5. What would make you think that CCC is close to trading insolvent. We continue to operate our two open cast mining operations and develop our third mine and complete further studies and exploration on our other advanced projects all within the Company's portfolio. We continue to meet our debts as and when due. We have our third mine due to be in first coal later this month and have the support of our financiers such as ABSA. Yes we are looking at ways to enhance our working capital as any company would do when commodity prices and the financial markets have deteriorated so much over the past 12 months. We clearly benefit from having two cash generating assets, a soon to be third cash generating asset and a number of assets of which we can leverage further off.
I trust that this addresses the issues you raise.
As you would have noted from the quarterly report I have relocated to South Africa to assume additional executive duties and to ensure a number of transactions that the company are focused on are advanced towards conclusion. I firmly believe in the company and teh opportunities it has here in South Africa.
Please do not hesitate to contact me if you have any further questions.
Once again many thanks for your email
With kind regards
Jason
CCC Price at posting:
4.6¢ Sentiment: Hold Disclosure: Held
