Abu, I think the auditors will continue to treat Vanmag the way...

Abu, I think the auditors will continue to treat Vanmag the way they have done the past 2 years.

As I’ve outlined before they keep re-classifying it as a Current Asset in the Consolidated Statement of Financial Position, possibly because they believed it was going to sell. However, the real effect of this is they increase the Current Assets by $10m which means they probably avoid going concern qualifications from the auditors.

The company tells the auditors it will be sold each year, but each year they introduce a new buyer because the previous deal fell through. First it was Demendix (or Demindex), then the following year it was a Chinese based company. Next year it will probably be someone else.

They just make it a conditional sale like subject to a new mining order, subject to finance, subject to bank guarantees being sorted but ultimately the deal falls through.

The only thing I believe is that if the company can sell vanmag, they will sell it for $10m – no less. They stated that in the Notes of one of the financial reports a while ago. However, I suspect vanmag isn’t worth close to $10m, so it will continue to sit there until some bunny comes along.

(Remember vanmag also came with a $2.4m nominal facilitation fee based on its $10m purchase price).

Think about it, at one stage Conti had a market cap of $270m and vanmag was to be sold for $10m. Today Conti has a MC of $40m and were told vanmag is still worth $10m.

That means vanmag is now a significant and material asset if its book value is true.

I don't believe they have changed auditors but I'd like our new Independent Chairman and CFO to change auditors and conduct a full and thorough review.