Look at the announcement on 20 February 2013 just before the half year results. Atlas paid for tenements by way of issuing shares (when their share price was higher). They therefore had an accounting valuation on those tenements sitting as an asset on their balance sheet.
They are required to test for impairment at least every year and they determined that they could not sell the asset for the valuation on the balance sheet nor justify it on a discounted cash flow basis (these assets probably aren't likely to generate cash flow for some time). Therefore they have to write off some or all of the value.
The write down of the assets is not really the issue as it was flagged back in Feb. The underlying earnings for the period Jan - June 2013 is mostly why no-one is smiling.
Having said that the September 2013 quarter is looking good...iron ore price holding up and AUD down. If it keeps this up for another 10 months it will be a very different story. Big IF...
AGO Price at posting:
83.5¢ Sentiment: LT Buy Disclosure: Held
