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May 6, 2016

Bougainville Copper Limited - Annual Report 2015


The issued capital of the company is 401,062,500 ordinary shares of Kina 1.00 each fully paid, and owned 53.83% by Rio Tinto, 19.06 by the Papua New Guinea Government, and 27.11% by pubic shareholders.

The mine assets totalling Kina 1,036,049,000 were fully depreciated or impaired (written off) in previous financial years, leaving total net assets of Kina 138,412,000 at 31 December 2015, comprised of Kina 108,953,000 in shares held in publicly listed investment companies traded on the Australian Stock Exchange, and Kina 29,459,000 in cash and other receivables. The share investments yielded Kina 3,778,000 in dividends while the cash earned Kina 1,029,000 in interest in the last financial year.

Dividing the total net assets of Kina 138,412,000 by the 401,062,500 shares gives a theoretical asset backing of K. 0.345 per share which is 65% of the currently traded share price of AUS$ 0.225 (or Kina 0.52 at the present exchange rate of Kina 1.00 to AUS$ 0.43).

The Annual Report 2015 gives some interesting information on page 1 on the 17 years of operation prior to 1989 and the 'Resource Statement' on page 10 assesses the financial viability of re-opening the Panguna mine.

There is a 'Statistical Summary' at the back of the printed Annual Report with some quite staggering production and earnings figures which are reproduced below for history buffs and those involved with BCL during its early years:

A little difficult to read but let's look at a few of them:

Net earnings in the first 2½ years alone were more than the total cost of the mine, viz. 1972 K.27.7million, 1973 K.158.4million, 1974 K.114.6million.

And the earnings continued to flow: 1975 K.46.2million, 1976 K.41.3million, 1977 K.28.5million, 1978 K.48.0, 1979 K.83.9million, 1980 K.71.5million, 1981 K.22.8million, 1982 K.11.2million, 1983 K.54.6million, 1984 K.11.6million, 1985 K.28.1million, 1986 K.45.3million, 1987 K.90.5million, 1988 K.108.6million - a stream of profits right to the very end.

They don't make mines like that anymore!

Anyway, like my mate says, it's only interesting if you're an accountant. And an accountent, accounttent, accountint --- good with math I am - albeit [re]tired now! ☺