Essays on Economic Deposits of Minerals Case Study

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The following paper under the title 'Economic Deposits of Minerals' is a wonderful example of a financial and accounting case study. An anchor resource is a mineral company based in Sydney, Australia. It was incorporated in 2006. It operates as a subsidiary of China Shandong Jinshunda Group Co. , Ltd. The company’ s main objective is developing mines holding these minerals. The continuing principal activity of the Group is the exploration of economic deposits of minerals. For the period of this report, the emphasis has been on gold, copper, antimony, uranium and to a lesser extent, tin and tungsten (Anchor Resources Limited, 2011). During the year, Jinshunda acquired 97.6% of total company shares through its subsidiary company, Sunstar Capital Pty Ltd.

The company has a set of exploration projects on the east coast of Australia for possible mines (Anchor Resources Limited, 2011). The company recorded $1,551,844 after-tax expense. This was high, compared to $439,406 loss in 2010. During the year, directors, employees, and consultants were granted 1,400,000 share options The company intends to undertake a diamond drilling program consisting of 8 to 10 deep holes spaced on 60 m.

It also intends to drill test for antimony deposit at Bielsdown so as to increase the size and grade of the current resource. In the search of gold at Tyringham, Anchor has planned to drill two deep diamond oriented core holes to a depth of around 500m (Anchor Resources Limited, 2011). At Birdwood Copper Project, there are plans to further diamond core drilling; to evaluate the extent of so far poorly tested porphyry system (Anchor Resources Limited, 2011). Auditing was conducted in line with Australian Auditing Standards and a comprehensive financial report provided.

From the report, The Company incurred a loss of 1,860,124 before income tax benefit in 2011. This was higher than the 2010 loss of 503,490. Total income for 2011 was 1,343,873, which was higher than the previous year’ s $506,356. No dividends were paid or declared at the start of the year. The basic loss per share was 2.96 cents while that of 2010 was 1.46 cents per share (Anchor Resources Limited, 2011). Total current assets for the company are 1,187,547 while total non-current assets were 4,162,690.

In 2010, the former was 716,526, while the latter was 3,597,923. There was therefore an increase in total assets. Current liabilities maintained at 98,502. There was no non-current liability in the two years. The current assets are twelve times more and can meet current liabilities. In 2011, the company made a loss of $1,343,114, while in 2010 the loss was 682,469 (Anchor Resources Limited, 2011). Due to a change in management and remuneration policy, administration expenses increased to $166,341 in 2011 compared to $50, 337 in 2010. Payment expenses increased by $ 256536.

The loss was also attributed to exploration expenditure written off and finance expenses incurred while changing ownership shares. Accumulated losses increased to 4,241,673 in 2011 from 2,689,829 in 2010. There were no proceeds from shares in 2011, which also contributed to the loss. The cash flow from operating activities in December 2011 was 114,147. From investing activities, cash flow was 848,054 and from financing activities, it was 1,350,000. Income tax was not paid (Anchor Resources Limited, 2011). Currently, the price share index for the company is $0.2, with a share volume of $ 52.54 million.

The range within week 10 and week 11 was $0.15 and $ 0.305. the volume traded within the week was 6,600. In June 2010, there was a change in top management of anchor resources.  

References

Bloomberg business week, Anchor resources ltd (AHR:ASX) 2:16 AM 03/1/12 Retrieved on 30th April 2012 from http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=AHR:AU

Anchor Resources Limited and Controlled Entities, Financial Report For The Financial Year Ended 30 June 2011

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