I can assure you the saddening report has zot to do with tax accounting ... they're dripping with tax losses. In fact I think you'll find at note 5 they have not recognised a future tax benefit attributable to tax losses because they are unlikely to use them. Regardless, I have no doubt given such late stage of mine life all costs and provisions that can be deducted have been deducted because as you correctly point out PK is an accountant.
but what is eye catching is the foreshadowed "rapid cash build". If I'm to conclude that what is published is true and fair disclosure, the fair value of that rapid cash build is about A$130m, presumably net of cash flows associated with rehabilitation. This is markedly less than the $850m that is occasionally mentioned on this forum. Which is more correct I wonder?
Refer note 19 : "...The Group assessed the recoverable amount of the Koolan Island CGU as at 30 June 2024 using the Fair Value Less Costs of Disposal (FVLCD) approach. The recoverable amount of the Koolan Island CGU at 30 June 2024 is $130,200,000 (2023: $375,015,000). The FVLCD is assessed as the present value of the future cash flows expected to be derived from the operation less disposal costs..." Ignoring odd balance sheet disclosures, the note tells me that PK expects that cash to be extracted from the remaining life has a present value of about A$130m. Is this note telling me that forward operating cash flows, net of rehabilitation, will be about A$50m per annum only? Is that the correct inference? Is that why MGX is trading below cash backing simply because forward cash generation is way way way way below historical cash generation? Is deeper minging way way more expensive? If so, does the business case for investment in digging deeper make economic sense as Fe prices tank?
No
@Goodheart, just like the way they skewed shipments between March and June qtr seemingly managing headlines, this report style only points to a concerning information quality deterioration / style.
Have a great day
(20min delay)