Spitfire Oil's auditors question mineral-resource carrying value

20th Dec 2016 11:21

(ShareCast News) - Spitfire Oil Ltd's auditors say they are unable to obtain enough evidence to support the directors' assessment that the recoverable amount of the mineral resources asset is at least equal to its carrying value.At 11:11 GMT, the AIM-quoted company's shares are down 12% to 2.75p. It also issued its preliminary results."As with any valuation an assessment of the carrying value/recoverable amount of a mineral deposit yet to be mined it is highly subjective issue," Spitfire said.However, the directors, on the basis of independent advice, still held the opinion that the recoverable amount of the Salmon Gums tenements was at least equal to the carrying value in the financial statements.That carrying value was same as that reported in the financial statements to June 30, 2015, upon which the auditor's opinion was not qualified, and "in light of increase in the oil price in 2016 of some $10 per barrel."Spitfire and subsidiary Spitfire Oil Pty Ltd together booked a pre-tax loss of A$623,614 for the year to end-June, from A$596,094 previously.The group benefited from interest receivable of A$125,328, from A$144,291. Operating costs of A$473,748 (2015 A$452,168) were incurred.