FAQ – What about the ‘going concern’ statement in the 2017 AR ?


23 March 2018

The clause used by the auditors in the 2017 Annual Report (page 35)  “indicate the existence of a material uncertainty which may cast significant doubt about the Group’s ability to continue as a going concern” was also present in the 2014 Annual Report and 2016 Annual Report. It is a standard form of wording.

As NickD is from an accountancy background he is in the best position to explain:-

The Auditors would not be able to use the income from Vametco to come to their decision, as it is not income from a subsidiary company. The Vametco income and investment will be accounted for under the equity method of accounting as we have already been informed.

As far as the Auditors and the accounting world are concerned, the cash from Vametco is not a secure line of income for BMN because we only have a 26% effective shareholding, therefore they cannot use it for the purposes of their going concern review.

As we know, the reality is very different. YD’s involvement is minimal and so we do actually control what happens to the Vametco cash.

Anyway, how would BVL have paid off their debts so quickly if Vametco wasn’t generating any cash for us.

The going concern argument is just nonsense.

(LSE BB 13th Sept 2017)

The structure of Vametco is shown below, the other 25% of Vametco Holdings is, I believe, fully taken by the BEE partner, Jaxson 640, which has been been financed by Bushveld Minerals by a loan which will be paid back out of Vametco dividends distributed by Vametco.

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