Altyngold Share Discussion Threads

[mininglamp] 29/6/2022 15:12

Fall is materially overdone IMO, one wonders if the broker will comment in due course, they usually have extensive coverage.

Shares are a LONG WAY from their circa £4 target price !

[nevgroom] 29/6/2022 15:10

Agreed GS, this has been stirred-up out of all proportion. They have been quite open about the prepayment, I don't think BDO could find the receipt!! I suspect this will be cleared-up very soon

[goldenshread] 29/6/2022 15:08

Whilst is correct to point out the prepayment surely this is a storm in a teacup, there is evidence that prepayments (albeit smaller ones) have been made in the past and this has not created any issues with the works carried out in accordance with the terms of the contract.

This commentary reassures.

"These have resulted in a drop in the cash balance at the year end, the balance is expected to increase as the prepayment is unwound and as a result of higher revenues from the increase in gold prices."

[mold breaker] 29/6/2022 14:49

It’s a big jump in prepayment $3.6m December 2020 to $14.5m December 2021. Let’s hope it’s legit and the ‘sole’ subcontractor fulfils his obligations in a timely manner and to budget.

At the very least a detailed breakdown of the expenditure should be made available.

[vish65] 29/6/2022 14:21

Two distinct issues here for me. First ,the specifics of the prepayment and associated risks that go with it. Which may be large or small but none the less give concern . Second the ethics and 'good' management practice of the people running the company. Which of the two as a shareholder/investor gives you more concern ?. The first is short term and fixable , The second is long term and begs many more questions of what else may arise given the owners colourful past .

[goldenshread] 29/6/2022 14:16

So from £1.15p bid 2 days ago to 80p today, quite crazy, the AGM is tomorrow so maybe some realism will return.

I noticed ahead of the results there were one or two bashers working the company on LSE site, is it in anyone's interest to get a low share price one wonders, the old chestnut about taking the company private returns but if so that would have to be at a fair premium.

So far the big losers are the family who hold 70% of the shares.

[sleveen] 29/6/2022 14:11

It's not as if the prepayment was being hidden; 27/6/22 RNS:

"In relation to cash at the year end this was US$3.6m (2020: US$7.2m). Cash generation as indicated by EBITDA was much higher in the current year. The utilisation of funds by the Company was a result of a net repayment of loans and capital expenditure in the year and a substantial prepayment in relation to production facilitation for the forthcoming period. These have resulted in a drop in the cash balance at the year end, the balance is expected to increase as the prepayment is unwound and as a result of higher revenues from the increase in gold prices."

[golden prospect] 29/6/2022 14:05

R123, it's now been relegated to the league for gamblers as serious investors will not ignore the auditor comments in the accounts, it's a red flag warning (which is a huge shame)

[excellance] 29/6/2022 14:04

This company is great at operational development on a very low budget and avoiding dilution, not so great at PR, but so far corporate governance has been acceptable and auditors have signed off the accounts even if they do point out the limitations of their audits.

Great buying opportunity?

[researchcentre123] 29/6/2022 14:01

So how bad is this? Certainly doesn't look good but then the family do own a big chunk of this company. The companies assets seem to be increasing. They seem to be running it more like a private company though, although they're making money

[researchcentre123] 29/6/2022 13:43

Well I've noticed when building stuff there are 2 prices - a cheap one from Mick the builder who doesn't have cashflow and needs cash up front to help and an expensive one from Harrods builders who are highly solvent, bill after the event and charge three times as much. It could be something similar. The prices they're paying don't seem bad anyway

[sleveen] 29/6/2022 13:43

Nod and a wink prepayment.

Q1 results say it all.

[golden prospect] 29/6/2022 13:42

PP, the dividend route (as discussed) would have been a great way for all stakeholders to extract value from the 2021 profits. Today's revelation from the published accounts, but not without note on Monday does not sit comfortably. A red flag and no incentive for small stakeholders to pony up. In this scenario, the family may be thinking of a rights issue to improve their holding plus do a KEM.

[redtrend] 29/6/2022 13:38

The pre-payment in 2020 to the same Subcontractor should partly ease some concerns, it was settled without issue:

"a prepayment as at 31 December 2020 for equipment was repaid to the Company in 2021 shortly after one of the prepayments to the principal sub-contractor
for very similar sums"

Pre-payments are quite common even before a Contract is awarded if the tender process has been long and drawn out. But prior to Contract Award, you would normally have a Letter of Award (legal protecting both Parties) or Letter of Intent (not really legal, more a promise and doesn't protect either party). A small outfit like ALTN in Kazakhstan though may not bother with such.

But overall yes the Independent Audit Report is concerning and ALTN management need to address shareholders and auditors concerns at AGM. Rather than Related Party concerns, it could be a liquidity / solvency issue with their main subcontractor.

[researchcentre123] 29/6/2022 13:37

So this says that they've paid in advance to companies that could be related or might not be according to the auditors and BDO think it doesn't add up?

[pensionplanner] 29/6/2022 13:28

They would be foolish to not take note and make changes, given their previous.

How much better if they had paid some of that as a dividend. They are rather short sighted as they could make millions more than conducting business that raises red flags

[golden prospect] 29/6/2022 13:01

Thinking back to AGM notice it does help to explain why item 1 is "To approve the Directors’remuneration report" and not Accounts.

[golden prospect] 29/6/2022 12:55

Sloppyg, i always try to block the Kemin Resources (KEM) saga but your reminder brings it to the fore.

[sloppyg] 29/6/2022 12:47

Good spot GP re. page 37 had not seen that.

ok so is becoming a far more significant risk and will explain drop in share price as has only been publicly available today in the full glossy AR.

Remember Kenmin Resources (previous Assuabayev company) had a compulsory delist due to failure to disclose Related Party loans.

Is history repeating itself as auditors do not appear comfortable re. RP's.

BDO huge audit firm so will be interesting to see if they are happy to carry on as normal.

[golden prospect] 29/6/2022 12:46

KS, i'm not pleased to see a difference in reporting on Monday 27th June without a note against this matter, and then finding it in the AR2021. Hope for better days!

[golden prospect] 29/6/2022 12:43

Sloppyg, On Page 37 the auditor makes this comment

"
two current principals of the sole subcontractor, its owner and director, have been business associates of the Group’s major shareholder but the existence (or
otherwise) of a related party relationship or transaction could not be established.
"

Clearly a headache for getting accounts out.

[king suarez] 29/6/2022 12:42

GP - many thanks for highlighting this issue - that is very worrying to me.. need to think on this, it doesn't read well at all.

[sloppyg] 29/6/2022 12:37

This will undoubtedly be why auditors delayed approving the accounts.

They had already prepaid a large amount prior to December 2021 for mining services even though the tender and terms were only completed in April 2022 as a post balance sheet event. At least auditors have not resigned !

16m is a huge amount to be prepaying for mining services.