New investor, doing some DD before buying. Hi all, DNG just came up on my radar and I've been doing some DD on it before I open a position. Everything looks great with this company.
But then, while reading through the MD&A, I came accross 2 paragraphs about some tax claim the Peruvian government has claims against DNG? Here's what the MDA said:
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A Peruvian subsidiary of the Company is currently facing claims from the Peruvian tax authorities for the
fiscal years 2003 up to April 2009. The majority of these claims come from the refusal of the tax deduction
of the cost of purchases of ore from certain suppliers and the credit on sales tax paid on those purchases.
These claims amount to $44.3M (115.2M Nuevo soles) including $10.2M (26.6M Nuevo soles) for income
taxes and sales taxes and $34.1M (88.6M Nuevo soles) in interest and penalties.
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Can anyone shed any light on this issue? Is it a concern? It seems kind of ridiculous with the $34M in interest and penalties?! If DNG had to payup on this $44M claim, it would be quite problematic, so I'm wondering what's everyone's assessment of this situation?
TIA.