I am not a Financial statement guru analisist so there might be a good explanation for all of this but on it's face it looks askew. Also this is a look at one of the possible reasons why we have made no progress.
This is for 2009 and probably before the thevin' CBV Gold sales law but what I found interesting is that less than a token 1.5% of the stated output was sold to the CBV(Venezuelan Bank).
The remainder of the gold totaling appx 400,000 ounces was sold to "PRIVATE DOMESTIC BUYERS".
The price paid by the bank is less than 45% of the spot price for the same period.
The price paid in 2009 by the "PRIVATE DOMESTIC BUYERS" for almost 99% of the output is about 20% less $ per ounce than the spot price.
Since Rusoro is a Canadian company mining in Venezuela run by russians, I guess one could argue "domestic" could mean anything allthough my guess would be private Venezuelan "domestic" buyers.
It seems governing the flow of the gold and who controls the wealth seems importiant to someone. So could this be part of our problem also?
Gold sold to
the Central
Bank of
Venezuela
("CBV")
(ounces) - 1,242 1,242 - - -
Gold sold to
domestic
private
buyers
(ounces) 85,057 17,737 102,794 97,122 460 97,582
---------------------------------------------------------
Total gold
sold
(ounces) 85,057 18,979 104,036 97,122 460 97,582
---------------------------------------------------------
---------------------------------------------------------
Average spot gold
price ($) n/a n/a $ 972 n/a n/a $ 872
Average realized
gold price for
gold sold to
the CBV ($)(5) - $ 397 $ 397 n/a - -
Average realized
gold price for
gold sold to
domestic
private buyers
($)(5) $ 698 $ 703 $ 699 $ 720 $ 734 $ 720
Average realized
gold price
($)(5) $ 698 $ 683 $ 696 $ 720 $ 734 $ 720
Also a reported 16 million dollar operating loss even though a 74 million revenue from sales was reported in the disclosure. Looks to me had the gold been sold at close to the spot price and not at a discount there would be no loss. If these people cannot make money before the new gold sales law took effect it is probably not going to happen in 2010 either. Is Chavez using their shareholders investment to extract the gold for free? Will the company operating expeses plus salaries push them into serious negative earnings going forward?
I thought these guys were the "prefered" mining company in Vz.
