NKWE Platinum Ltd (fka NKWEF)

[ALERTS100%to10000%GAIN]

NKWEF~~1. Carrying value of prospects, rights and exploration assets

The carrying value of prospects, rights and exploration
assets at 31 December 2016 comprises the Group’s
Garatouw Project. This is considered to be a key audit
matter as the recoverability of the carrying value of
prospects, rights and exploration assets is subjective,
being based on the Group’s ability, and intention, to
continue to explore the asset and maintain tenure. The
carrying value may also be impacted by the results of
exploration work indicating that the mineral reserves may
not be commercially viable for extraction.
The Group engaged an independent valuation expert to
determine the recoverable amount of the Garatouw
Project at 31 December 2016. Based on the independent
expert’s valuation report, the recoverable amount was
determined to be the same as the carrying value and
accordingly the Group did not recognise any impairment
charge or impairment reversals for the year ended 31
December 2016 as detailed in Note 8 to the financial
report.
(ii) The Group holds a mining right over the Garatouw Project
for a 29 year period expiring 21 January 2044. On 11
October 2016, the South African Department of Mineral
Resources (“DMR”) issued the Group with a notice
indicating its intention to cancel the mining right due to
failure by the Group to comply certain provisions of the
Mineral and Petroleum Resources Development Act and
the terms of the mining right. The notice required the
Group to make a presentation to the DMR as to why the
mining right should not be cancelled. This presentation
was made to the DMR on 24 November 2016 with the
submission of the required documentation under the
notice being made on 30 November 2016. This matter is
disclosed in Note 8 to the financial report.
(i) We involved our valuation specialists to assess the
valuation report provided by the Group’s
independent valuation expert including assessing:
? The independence, objectivity and capability
of the expert used by the Group
? The methodology and valuation method
adopted
? The assumptions applied by the Group’s
independent valuer providing the report as
detailed in Note 8.
We also considered the adequacy of the Group’s
disclosures with respect to the degree of
estimation involved in the determination of the
recoverable amount.
(ii) We assessed the documentation submitted to the
DMR addressing the concerns raised by the DMR in
their notice. As a formal decision is yet to be made
by the DMR on the withdrawal of the notice, an
Emphasis of Matter paragraph has been included
in our auditor’s report to highlight the significant
uncertainty over the withdrawal of the notice and
its impact on the Group’s ownership of the
Garatouw Project.
We have assessed the disclosures made in the
financial report in relation to this matter.
http://www.nkweplatinum.com/ReportPDF/2016%20Annual%20Report%20to%20Shareholders%20(pdf).pdf