Guestimate on US Dollar DeclineI'd like to throw out a straight extrapulation of recording revenue in US dollars and then converting to Cdn $ for quarterly recording purposes. If indeed the company has no means to protect itself from exchange rate fluctuations then one might expect to see a negative impact on the Q3s caused by the rapid decompression of the US Dollar vs many currencies including Cdn dollars. Therefore based on the currency percentage decline between 30 June and 30 September and revenue number of around $6.4 Million projected, I could envision a impact of up to $400 to $500 thousand dollars when $US revenue is converted. Thus in Q3 accounting terms this could mean $5.9 to $6.0 million in Cdn $ insted of $6.4M based on, what I would assume to be $6.4 million without taking into account the 3-month US$ decline over the period 30 Jun-30 Sep.
Overall I have assumed that most revenue projections summarized in this forum did not take into account the foreign exchange ramifications. I am also quite willing to admit that I have no experience in the many possible permuatations of the influence of foreign exchange on the Q3s as I have no idea how revenue and related foreign exchange is recorded. I have assumed that the foreign exchange impact is only recorded on the books at the end of the accounting period. However, in another case, it could be a blended exchange rate over the quarter thus resulting in a smaller reduction on the revenue numbers as expressed in Cdn$. I have no idea what Cdn-based GAAP rules apply in the case of foreign exchange accounting entries.
All of the above to say: Beware the influence of foreign exchange on revenue especially wrt these quarterly results. Hope I'm way off.
Example of USD$ & CAD$ Foreign Exchange impact follows:
Gold in Cdn$ closed this week at $783.84, up $74.48 and 10.50% over the last 12 months.
Gold in US$ closed this week at $832.10, up $203.90 and 32.46% over the last 12 months.
As is readily demonstrated by this example, the decline in the $US dollar relative to the Cdn$ is very significant indeed.
So let's hope that Sirit's CFO has taken appropriate action to mitigate the foreign exchange risk.
BTW, anyone interested in following live gold prices may wish to check out www.kitco.com. Best FX site to see how live currencies are doing is www.fxstreet.com.