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Aurelia Metals: Now We Know

John Robertson

PortfolioDirect

A month ago, the wire at this link (VIEW LINK) questioned whether the absence of fresh guidance from Aurelia Metals (formerly YTC Resources) about its financial performance was “a sign directors are confident about meeting those expectations or simply trying to avoid a direct statement”. This question was prompted by the company’s strange references to what had been included in the feasibility study for the Hera project rather than anything based on actual experience after production had commenced. On 15 June, reflecting this tension, the company was removed from the PortfolioDirect model portfolio after the recommended position had earlier been reduced in March. Today, the share price fell 70% after the company confirmed that its operational and financial results had fallen so far below what had been expected that equipment changes and a capital restructuring were necessary. This is hardly an advertisement for how continuous disclosure should work but it is a worthwhile lesson for investors in the important role of scepticism in security analysis.


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John Robertson
John Robertson
PortfolioDirect

John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...

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