Title : Amerigo Resources (ARG.to): Read the footnotes
link : Amerigo Resources (ARG.to): Read the footnotes
Amerigo Resources (ARG.to): Read the footnotes
Amerigo Resources (ARG.to) and its balance sheet will be one of the subjects covered in the Kai&Mark podcast tomorrow. Here today we will merely offer you some of the words found in the 1q20 financials, filed this morning:
The price of copper remains at levels where it is insufficient to cover the Company’s production costs, royalty obligations to DET (Note 4), financial commitments and ongoing working capital requirements. These adverse conditions give rise to material uncertainties that may cast significant doubt as to the ability of the Company’s ability to meet its obligations as they come due and accordingly, the appropriateness of using accounting principles applicable to a going concern.
In response to these circumstances, the Company has reduced operating costs, suspended most capital expenditures, and structured deferred payment programs with key suppliers. The Company is also engaged in discussion with the MVC lenders to explore options to maintain the existing loan in good standing, and MVC has approached Codelco requesting the parties revise the royalty terms in a way that operations at MVC can continue for the mutual benefit of both parties. There can be no assurance that these initiatives will be successful.
The Company’s ability to continue as a going concern is dependent upon copper prices stabilizing and/or MVC’s ability to reduce operating costs and royalties, in order to generate positive cash flows from operations. These financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and statement of financial position classifications that may be necessary were the going concern assumption to be inappropriate. Such adjustments could be material.
And if you need an Ottotrans of that to make it understandable, stop investing in juniors now.
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