It seems unfortunate that the board did not clearly flag up the underlying reasons for the net loss reported in the 2016 10k statement.
Comments were made on the Stockhouse board, to the effect that there was a sound growth in GEO’s and therefore progress is being made.
Accordingly, I have prepared the following table, to arrive at an income number, normalised by removing exceptional, non-recurring, or distorting numbers, for all the years 2014/2016.
After adjustment for the numbers extracted from the 10K published statements, the following conclusions could be drawn:-
- The 10K reports show a change from a $44.2m profit in 2015, to a $0.1m loss in 2016.
- However, in stark contrast, the “normalised” statements below shows a 61% increase in “normalised” profits, from $26.3m in 2015 to $42.1m in 2016.
In summary, the board may have complied with statutory disclosure requirements, but could have been more forthcoming with shareholders, with regard to giving an overview of the impact of the exceptional numbers in the consolidated income financial statement.
| Klondex Consolidated Income / (loss) 2014/2016 | | | |
| Source - 2016 10K page 53 | 2016 | 2015 | 2014 |
| US$'000 | US$'000 | US$'000 |
| Net (loss) income per financial statements [10K] | (1,700) | 44,253 | 26,884 |
| Adjustment for Exceptional lines of expenditure, in order to give a true and fair picture of 2016 loss - (negative) = increase loss / positive = decrease loss) | 2016 | 2015 | 2014 |
| Write down of production inventories | 2,869 | 1,201 | 0 |
| Exploration | 12,765 | 9,813 | 3,415 |
| Development & project costs | 8,953 | 0 | 15,467 |
| Asset retirement | 2,653 | 871 | 628 |
| Business acquisition costs | 2,253 | 328 | 2,042 |
| Provision for legal settlement | 3,000 | 0 | 0 |
| Derivatives | 7,646 | (3,367) | (7,088) |
| Foreign currency translation | (651) | (15,059) | (10,874) |
| Taxation | 3,724 | (11,738) | 2,955 |
| Adjustment total for all the above | 43,212 | (17,951) | 6,545 |
| Income "Normalised" by the above adjustments | 41,512 | 26,302 | 33,429 |