The dreaded unrealised gains tax:When valuing trading stock...

The dreaded unrealised gains tax:

When valuing trading stock there are three choices that people have as I understand it.:
* cost
* depreciated cost for depreciating assets
* market value

You can also switch from one method to another in different years it seems.

So you can opt for tax deductions in excess of depreciation if the market value drops below the depreciated cost without selling and create a lower value in the balance sheet for tax purposes going forward but can collar gains from there in the future by only lifting the value for tax purposes back to the cost.

Until Airbus Albo and the clowns bring the Surcharge tax on Super balances over $3m in, in June next year, there is no compulsory unrealised gains tax in Australia that I'm aware of.

Share price: In with a chance:

The fearful will always see the worst and miss out on the best opportunities. As long as the worst looks like being better than the present I'm in, particularly, if the best could be brilliant.

Those who have experience developing stuff or investing in development opportunities know that what you know before you start is just the beginning and nothing will ever go completely to plan. Good managers adapt and deliver the best possible result. What HGO have delivered so far is looking very good.

It's pretty clear that the non holders and the market in general aren't buying the upside story. They are concerned it seems about the sudden need to strengthen the balance sheet when the Annual Accounts were being audited and the sudden an unexpected departure of Lachlan that was recently announced.

Worth remembering that the Mine Manager we had when the plant was on care and maintenance wasn't the right guy to manage the UG mine development. Getting a CEO with ROB Fulkers credentials when Lachlan was elevated from mine manager to CEO and took on what was virtually a liquidation of Assets project wasn't even a consideration.

The CR and the change of leadership could of course be red flag negatives. Given the make up and expertise of HGO's board they could also be well informed, value add, decisions that get the plant full quicker, while ensuring cash is available during the ramp up, and ensuring the UG operation is more expertly managed.

The Board: Skin in the game:

The big positive with HGO is the two biggest shareholders are very savvy operators who effectively control the board and would certainly know what colour the flags are.

Freepoint of course is a commodity expert with massive exposure to copper who understands the industry and HGO's forecasts better than anyone. The fact that they contributed to the capital raising to the fullest possible extent gives me a lot of comfort that we are better funded and now better managed to fill the plant in the shortest possible time and run an efficient operation.