Ann: Full Year Results 2015, page-8

Most of the 75 producers that I track have reported impairments over the last couple of years due to the drop in PM prices and also due to the changes to resource/reserve accounting in the revised JORC12.

In order to get fair 'apples to apples' comparisons I discount the non-cash impairments shown in the Profit & Loss statement.

Of course, companies re-calculate whether impairments are necessary every reporting period and if the market prices for the PM's improve then their past impairments may be reversed.

I think the main impact of the MML impairment will be to dramatically reduce the D&A component of Cost of Sales. The carried value of prior expenditure has been reduced from US$402.691m to US$143.096m after the impairment. This is a drop of c. 65% and would therefore appear to lead to a corresponding drop in Depletion & Amortisation (D&A) booked within the CoS figure of the Profit & Loss.

Given that the (non-cash) D&A booked for FY15 was US$31.7m I estimate that the likely figure for FY16 will be c. US$11m - with a correspondingly higher input to NPAT of c. US$20m (around US$14m extra to the bottom line after tax), all other things being equal.
CPDLC