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BillC are you suggesting that if there is no production then KBL...

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Stevienix1

381 Posts.

20

09/08/16

20:12

Post #: 18480164
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Originally posted by billc3012 ↑

The $71M figure for the creditors is misleading as not all the $71M is currently owing.

Part of the 71M figure is clearly described as deferred revenue. Stevei's post #18470740 links this to the streaming agreement and he is correct.

In current liabilities $3,675,147
In non-current liabilities $26,897,238

These figures total $30,572,385.

These are contingent liabilities which become due when the mine output is sold.

So in conventional terms the liabilities are $40.5 with an additional $30.5M contingent liabilities.

Lumping these together as $71M liabilities is misleading as $30.5M is not yet owing. It is in fact only a best estimate. The final figure depends on metal prices at the time, the quantity of metal produced and whether it is gold, silver, copper, zinc or lead. You will appreciate that this figure is contingent on how the future unfolds.

In fact as C1 costs include streaming costs so you have to be careful you dont double up on your costings.

However as it is a future payable it is a liability, but it is not yet owing. I spoke to Jim about making this clearer in future accounts as it is easily misunderstood. I will find out if they take any notice of this when the yearly accounts are released.

They are contingent liabilities, estimates of what is payable under the metal streaming agreement when the metal is sold.

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BillC are you suggesting that if there is no production then KBL does not need to repay outstanding amounts to Quintanta?

Explain what would happen if the company ceased operations tomorrow, would Quintanta walk away from its debt? I thought I saw a post that said they had security over everything...this leads me to conclude that no matter which way you classify it, the debt is payable.

Once the debt has been repaid there is an ongoing obligation deliver 12.5% of all ongoing production to Quintanta at significant discount to market i.e gold at USD435oz. This component of the transaction may be contingent on production but not the part that is used to repay the money advanced by Quinatanta

KBL Price at posting: 0.5¢ Sentiment: Sell Disclosure: Not Held
2 Upvote

0 Great analysis

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