RE:RE:Q3 Financials out on SEDARTR33, that riddle will have to be solved by folks much smarter and higher on the food chain than I.
It is no secret shareholders have questioned the out of the blue $2.3 million dollar Rights Offering in Q4 2018 in which GSFC took complete control of Karnalyte at the same time the unexplained Q4 2018 $2 million dollar increase to a Decommissioning Liability occured in that for 7 years prior remained unchanged at $212,000.
Nothing was reported in 2017 or 2018 regarding the Wynyard project operationally to justify a 10 fold increase in Decommissioning Liabilities and very little besides mandatory regulatory maintenance has been completed on the Wynyard site since 2016, so what is there to decommission
I have been pouring through the past 4 years MD&A’s and Financials in preparation for upcoming events, and found it very interesting that Karnalyte has just reported their intentions of repayment of a decommissioning liability that was previously reported expected to be incurred in 2038
"The undiscounted amount of estimated costs required to settle the obligations at December 31, 2018 is $2,553,000 (2017 - $212,000) which are expected to be incurred in 2038."
Yet once again out of the blue, this unexplained Decommissioning Liability is now a priority to settle, when there is basically just enough cash / cash equivalent remaining in the treasury to cover that reported liability.
2 plus 2 is not adding up to 4!
It was reported by the company “Decommissioning 2016 Test Cavern Site – Karnalyte largely decommissioned the test cavern site in accordance with the operating permit from the Government of Saskatchewan. All rental equipment was returned and most of the Company-owned equipment and material was moved to the permanent storage yard. These activities also prepared the site for the first phase of the Wynyard Project ("Phase I") construction.”
“The increase in the fourth quarter of 2018 and all the quarters in 2019 is due to a significant increase in the decommissioning liability recorded due to a change in the estimate of this liability made during the fourth quarter of 2018.”
“Decommissioning obligations: The Company’s decommissioning obligations are based on the Company’s net ownership in wells and facilities. Management estimates the costs to abandon and reclaim the wells and the facilities and the estimated time period during which these costs will be incurred in the future. These provisions relate only to the wells that can be used in production at a future date. The majority of these costs are expected to be incurred over the next 30 years.”