Uranium One chooses its questioners

[miningmx.com] --

Uranium One

We’ve noticed over the past year that it has been extremely difficult - in fact, impossible - to put questions to CEO Jean Nortier at Uranium One conference calls.

We had assumed it was some technical glitch that had resulted in our calls not being logged when we punched “star one” as requested by the operator to book a place in the question queue.

Silly us. It now turns out media are deliberately excluded from asking questions at these conferences. According to Nortier, question time on these conference calls is earmarked for analysts and fund managers only. Media questions are dealt with directly through one-on-one calls.

Thanks for letting us know about that. Nortier actually does return calls although on this last occasion it took more than 24 hours for that to happen. He is, of course, a very busy executive but for us that was too late. We are in the news business.

Point is, some of these releases from TSX-listed companies are so cautiously phrased as to be downright confusing at times. Without clarification from the company when required there's the clear possibility of misinterpretation.

We have no doubts as to why Uranium One excludes questions from the media on the conference calls. Journos lack the tact, subtlety and insight possessed by fund managers and analysts into the finer points of the business.

We tend to ask blunt questions like “how come you screwed up at the Dominion mine?” which, of course, could be construed as a bad investor relations experience.

Hwange Colliery

The JSE last week put out a SENS notice highlighting the fact that the audit opinion on Hwange Colliery’s financial statements for the year to end-December 2008 contained both an adverse audit opinion and an “emphasis of matter.”

Hwange is the main Zimbabwean coal producer listed on both the JSE and LSE.

The JSE advised shareholders to refer to the financial statements to “ascertain the exact nature of the adverse opinion and emphasis of matter”.

So we did and discovered the problem involves the accounting treatment of Hwange’s results in a hyperinflationary economy.

The statements do not meet International Accounting Standard (IAS) 29 because they were based on historical cost and not restated to take account of the effects of inflation.

Reason for that given by management was there were no inflation indices available at December 31 which would take account of changes in the purchasing power of the Zimbabwe dollar.

That sounds reasonable given a situation where, at December 31, the “United Nations” exchange rate was one US dollar worth 35 quadrillion Zimbabwe dollars while the “official” exchange rate was one US dollar worth five million Zimbabwe dollars.

It all seems kind of academic given the chairman’s observation that the revaluation of the Zimbabwe dollar in 2008 eroded the value of the company’s issued share capital to zero.

The good news is that Hwange’s 2009 financial statements will be reported in foreign currency following Zimbabwe’s decision to scrap the Zim dollar and bring in a multi-currency system.