TSX:LSG.DB - Post by User
Comment by
Allthewaydownon May 07, 2014 3:02pm
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Post# 22534948
RE:RE:RE:Please help explain!
RE:RE:RE:Please help explain!I'm not an accountant myself (more on the technical side of the industry), so I avoid talking about too many details of tax law, especially as it relates to the valuation of reserves. The bottom line, though, is that we are using up our assets (orebody and facilities) and converting them into cash. We tell the government, "We generated 22.2 in cash, but used up 17.5 in stuff to do so, meaning that you should only tax us on the remaining 4.7".
Meanwhile we actually have the whole 22.2 in the bank and can do anything we want with it. The reality is that we are going to have to replace at least part of the stuff we have used, but in effect we can use about half of it to pay down debt, initiate new capital projects, or whatever else.