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Having yesterday reported that there is strong evidence of funds “amounting to several million US dollars” being transferred to entities in China without full value being received and that “analysis reveals that there is a pressing need for cash”, ASA Resource Group (ASA) states it now “provides further information on the group's cash position”.
This includes that “the board is satisfied that it has established that the total amount of Asa Resource funds that are unaccounted for is $4.3m” - and that some “has been traced to two group companies administered from Hong Kong but the board has yet to confirm whether any part of this sum remains within the two companies”.
It adds that “there are a number of outstanding creditors, mainly relating to legacy litigation and unpaid directors fees and salaries. These amounts are expected to be paid in due course from management fees payable by Bindura Nickel Corporation and Freda Rebecca Gold Mine (the two principal mining operations) to the company”. Their continuing cash flows are noted to “expected to be adequate for the normal working capital requirements of these mines”. Meanwhile, “shareholders should be assured that the board is taking every measure possible to recover these sums and to restore confidence in its operations and across the group”.
Hmmm. So this “further information on the group's cash position” is unable to include an actual current cash or working capital number then – and the creditor situation and these “expected to be paid in due course” and “expected to be adequate for the normal working capital requirements” don’t exactly inspire confidence given that this is a company which just a couple of weeks ago considered financial management allegations “completely mischievous”.
That has now been followed by Chairman David Murangari yesterday admitting it was “thankful that the anonymous allegations led to an inquiry as a consequence of which we have identified a lot of what has gone wrong”! It will take me a good while to have any confidence here.
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