RE: moreThe MD&A paints a little different picture of their balance sheet. Apparently the exact sum of money owed to the "customer" (Trafigura) was still under negotiation, but they booked the loss as if they will have to pay the full amount. I guess what happened was that Trafigura paid for concentrate during the year and then repriced it (the contract stated that Trafigura had a full 4 months after delivery to settle on the amount, so after the metals prices crashed, I guess Trafigura said, hey we paid you such and such but now that metal prices are so much cheaper, we'd like you to give us back whatever the difference in price is now from what it was when we paid.)
"The results for the fourth quarter of 2008 reflect significant adjustments which were booked at
year end related to price-adjusted sales which were under negotiation at year end, and the write
down of the Rosario project. These results are not typical and are not indicative of future results.
Liquidity: At December 31, 2008 the Company had a working capital position of $2,368,170
(December 31, 2007 - $12,151,412) which consisted of $1,734,484 held in cash and short term
deposits, account receivables of $49,774 (trade) and $3,125,362 (other) prepaid expenses of
$192,209 and due from joint venture partner of $984,708. These amounts are offset by accounts
payable of $2,597,885 and the current portion of the Company’s notes payable of $2,500,489 in
relation to equipment purchases at the La Negra mine and the final acquisition payment due to
IMMSA in relation to the Company’s Rosario project. The Company’s long term debt relates to the
convertible debenture with Silver Standard in relation to the Company’s Shafter Project
($9,215,740) and unearned revenues in relation to the silver purchase agreement with Silver
Wheaton ($29,363,955)."
Can anyone explain what exactly this snippet from above means (underlined below)?:
"the Company had a working capital position of $2,368,170 (December 31, 2007 - $12,151,412) which consisted of $1,734,484 held in cash and short term deposits, account receivables of $49,774 (trade) and $3,125,362 (other) prepaid expenses of $192,209 and due from joint venture partner of $984,708.