Teal Valley T.TV

RE:RE:RE:RE:RE:RE:1st quarter report

[Galvanizer]

Good article on the timing and factors to consider when recording an impairment charge. 

IFRS-IAS Impairment review | Grant Thornton Austria

Effectively, management knows now (and before the release of the 2022 Q1 FS) that Perkoa's potential cash flows have been impacted by the flood - estimated costs to dewater and to restart operations, the current reserves, current zinc prices, etc.  Because management knows this, the reported assets / carrying costs on the balance sheet may need to be written down. If management has plans to continue to produce zinc at the Perkoa mine then there should be fairly robust disclosure to suport these plans (new life-of-mine, zinc price assumptions, etc.) - Ricus has already disclose / indicated closure issues of Perkoa. To address the question below, management cannot claim that they do not know the future plans as it is their job to know so (god help us all if they think that is a viable defense / response in not addressing this issue).

Finally, the FS will be released this week and many questions will be answered.  However, I do not beleive the share price will significantly improve for another year as many key issues still need to be addressed including the real actual cashflows, the Perkoa future, the financing, and the real updated RP 2.0 NPV!

ZincDink wrote:
How can you record an impairment charge if you don't know the outcome?