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Dynasty Metals & Mining ( 1q16 financials (a.k.a anatomy of a gold mining trainwreck)

Dynasty Metals & Mining ( reported its quarter this evening and oh what fun we'd had here at IKN, so here are some charts to help spread the glee and happiness. 

This one shows revenues, costs and gross profit. Bringing in $3.533m in 1q16 sales when it costs $5.972m to do that (including $4.854m in on-site mining and processing costs)....well, it isn't good business.

And when you subtract the other things you need to run a company, G&A and so forth, it gets worse:

We know that production was very low due to the workers going on strike. That's because DMM decided not to pay them (they owe over $1.7m in back pay to workers, and over $5m to their suppliers). The result was just 2,221 oz of gold production in the quarter but somehow DMM managed to sell 2,785 oz of gold, a full 564 oz more. As this chart shows they managed the same trick in 4q15 as well:

 Which is a cool trick, but we know how they did it...

 ...and they're unlikely to be able to repeat the trick in 2q16.

Over at the balance sheet, we can see just why DMM decided not to pay the people who work for the company or bring them supplies:

And if you think the lack of cash is bad, just wait til you see the working capital position:

This company owes $13m net/net in the next 12 months, with over half of that to the people who keep the company running. The people they haven't paid are still on strike, production is going to be even worse this quarter than the last one and there's no inventory left to prop up sales. And these jokers think they can being in contract workers to fill in for the strikers? 

Meanwhile, this stock bizarrely doubled recently when DMM announced they'd got a $0.5m loan from a company that was going to start digging up the mineral at a deposit they'd never developed before. Pray tell, how much damage does half a million dollars of cash do to a $15m current liabilities position? The only people who bought this stock are people who don't even know where to go to find the company financials, let alone open them, let alone understand what's written inside them.

This company is going bankrupt and no amount of pretend fixed asset value on the sheets can hide the cruel reality, get that into your head and if you own any of these shares, make like a shepherd* right now before your paper moves to its true intrinsic value of zero dollars and zero cents.

*get the flock out of here