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Gold/Mining/Energy : Copper Fox
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To: Metacomet who wrote (9682)10/26/2015 3:25:09 PM
From: louel3 Recommendations

Recommended By
biggerbob68
Hog Head
Theotokos

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Glad to see you understand.
What was wrote down for the most part was Good Will value. Which is only beneficial if a company intends to sell. If a project is intended to be kept. Good Will can actually act as a detriment.

Lowering that segment of projects permanently retained, does not affect or reduce, earnings from any past,current or future operations. Or it`s profitability. What it does do is provide millions in tax credits. And increases ROA ratio. Making the company appear smaller with the same actual earnings when viewed by lenders.

Tax payable on all capital gains from the sale to Franco Nevada of the future silver output from the Antamina mine for $650M. Has been completely eradicated by capitalizing on the write down of projects they have no intention of selling.

What Teck did is simply take advantage of a loop hole provided by Canada Revenue. It was put there so when a Company sold Revenue Canada could tax growth in the Good Will factor when a project was sold. However it is a two way street. And Teck simply took advantage of the other end of the spectrum. It was a way of further cutting costs Taxation to be specific. What is not used this year can be carried forward if my memory serves me right for five years.


It should end up being reflected on the retained earnings line of year end filings.

Another thing which may prompted the size of the move at this time. Is the election of a new Federal Government who is promising some Tax reforms. If they did not take advantage of it now it may not be available in the future.

Don Lindsay is a former CIBC investment Banker. The move I`m sure was thought out in great detail as to the best interests of Teck. Cheers.
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