GREY:MLKKF - Post by User
Post by
ElJon Nov 29, 2010 4:19pm
519 Views
Post# 17772585
"Relative Stability" in Share Price
"Relative Stability" in Share PriceA number of posters here(and certainly not all) seem to be confused by what they consider the "relative stability" of Mercator's share price in the context of the recognized accounting error and the associated re-statement....... the impact of $7.1 million over-statement in revenues for Q3, 2010 does clearly perculate through the system but can go unnoticed by people who trade primarily based on momentum and broad market trends. However there was a flag on that problem posted here as early as Oct. 28, 2010 in response to the Oct. 27, 2010 News Release. The revised unrealized loss from derivative instruments of ($81.261 million) in Q3, 2010 is a volatile entity on commodity prices, related to a "score card monitor" on hedging. For investors operating under a type of forward looking "value based" emphasis the accounting error is important only in the context of clear evidance of a degree of weakness in management system controls(not trivial).
By nature in Mercator at this particular stage of development, it is cash flow and future cash flow(as outlined by Longonzinc), based on throughput, grades, recoveries, concentrate contained % and Molybdenum price(and to a lesser degree Copper price because of the hedges) that determine shareholder value. Lots of variables, but the market has reacted predictably IMHO to Mercator's accounting error,
Peace,
Good Decision-making by All,
ElJ