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Re: Richcc71 post# 4651

Monday, 08/03/2015 12:28:22 PM

Monday, August 03, 2015 12:28:22 PM

Post# of 18978
Operating reports since the filing in March 2015

I looked closer at the March, April, May and June operating reports. It looks like large parts of the losses were write downs on the ore that was being processed. In March 2015, there is a $37 million dollar write down on inventory and also a swap expense that all hit the income statement that month. It looks like that whatever value the ore was being carried at was too high.

From an accounting point of view, I can see two reasons this would happen:

1: The ore on the pads was being carried at the cost to produce it and extract the gold/silver from such ore, and the amount from the sales was much less than that, with the difference being booked as a loss. This would explain why the was a big write down in March and then other later in June, until the gold/silver extraction sales were complete, they did not know.

2: They misestimated the amount of ore they had or the amount of gold/silver that was contained in the ore.

As far as the common goes, unless there is some change that allows the unsecured to recover 100% (or something close to that), the common will not be allowed to get anything. The judge can't change the bankruptcy laws where the unsecured has to recover its claims prior to the common getting anything. I expect the best to hope for would be for warrants, priced so that the unsecured is made whole.

Louis J. Desy Jr.

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