unfortunately its how accountants do things.the costs of...

unfortunately its how accountants do things.

the costs of production will not be on the cashflow statement until revenue is received. that there is no revenue and no costs means they've received nothing for the product they have supposedly sold. the income they report must be from interest.

the production costs will currently being sitting in the balance sheet as "current assets". once revenue has been received "current assets" will be drawn down by the estimated production costs and it will appear on the cashflow statement.

its really dodgy, and while it works in a factory it doesn't work well on a mine inventory. the assumption is that the "product" has value until either revenue is received or it is written-off from current assets.

its often said that atlas iron are making lots of money. in fact they have massive low grade stockpiles that sit as assets on the balance sheet, allowing their production costs to be lower. once they write off the value of the low grade stockpiles they will have to report a significant loss because they are actually stacking out mineralised waste.

with windimurra i guess they've got their "iron ore" (calcined iron with high levels of toxic, mobile vanadium) on the balance sheet as assets and also some vanadium production, along with waste movement.

its how companies in trouble manage to hide they are in trouble, and also explains that when companies go bust they suddenly report massive losses - they have to write off assets that never had any value in the first place.

clever bean counters, hiding the truth until everything goes pear-shaped.

what i found interesting about the 1/4ly is they only had $600,000 free cash once debt provisions were taken into account. and servicing debt at 22.5% can't be easy with no income.

no hope for this crew. look