Focus Minerals forgot to write off around $1.3m worth of old mining assets

Gold miner Focus Minerals is currently preparing its annual accounts for the year ended December 2018.

And in part of that process, the company uncovered an accounting error; it forgot to write off some assets in 2017 that were no longer in use.

Focus (ASX:FML) fessed up to the ASX this morning via an announcement titled “Intention to Restate the 2017 Financial Statements”.

Whoops

The company identified that “the accounting values of a number of tenements, which were surrendered in 2016 and 2017, were not written off in its financial statements in accordance with the relevant accounting standards and policies”.

As a result, the company estimates that assets in 2017 were overstated by around $1.3m.

That sum amounts to around 1.9 per cent of the company’s exploration and evaluation assets, which totalled $66.8m as at 31 December 2017.

The company’s 2017 financials were audited and signed off by PwC.

Focus says its 2018 financial report will show restated figures for the previous year to reflect the error.

While the provisional overstatement has been flagged at $1.3m, the company added that its 2018 accounts “are not yet finalised and potentially subject to change”.

“Focus will keep the ASX updated in respect of any material developments and expects to provide a detailed explanation of these matters in its annual report for the year ended 31 December 2018.”

Still exploring

Since January, Focus has provided the market with more positive news about its drilling finds.

But its operations are still largely exploratory in nature, and that means the company is still burning through a fair bit of cash.

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It booked a net loss of $4.8m in 2017 after losing $3.2m the year before.

In addition, its 4C filing for the December quarter showed net operating cash outflow of $9.8m during the 2018 calendar year.

On the plus side, there’s still plenty of money in the bank — the company had cash and cash equivalents of $42.6m as at December 31.

Focus shares opened this morning at 23c, up from a December 2018 low of 15c. But the company’s stock price has been unable to reverse a downward trend since hitting a recent high of 70c in July 2016.