Antinuclear

Australian news, and some related international items

Uranium miner ERA forced to slash its assets value

burial.uranium-industryEnergy Resources of Australia slashes asset values, The Age, Brian Robins 30 Aug 16  Uranium miner Energy Resources of Australia has been forced to slash the value of its assets by $161 million, almost equal to the company’s remaining sharemarket value.

With its controversial Ranger mine, which is surrounded by the Kakadu National Park, scheduled to close within five years, the Australian Securities and Investments Commission (ASIC) had questioned the way ERA valued its assets in its December 31, 2015 financial report.

The miner had now conceded that the value at which it carried the Ranger mine assets in its books “exceeded fair value”, ASIC said in a statement on Tuesday.

ERA pointed to weakness in the uranium oxide price at a time when the mine had only a five-year life left, without an extension of its authority to mine, as reasons for booking the impairment.

The write-down compares with ERA’s sharemarket worth of just $173 million, which signals deep-seated investor pessimism over its prospects in light of the traditional land owners’ opposition to extending the operation of the mine.

In the June half, ERA lost $35.2 million, which blew out to $196.5 million following the write-down. Revenue slipped to $170.5 million from $185.8 million due to the weak uranium price……..

ASIC had queried the company’s use of a single discount rate when valuing its assets. ERA has agreed to use different valuation techniques for the mining and rehabilitation of the site, for example.

ERA’s biggest single asset is its accumulated losses, which now total $822.8 million and tower over the value of its dwindling equity of $273.4 million.

August 31, 2016 - Posted by | business, Northern Territory, uranium

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