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What 30 June 2023 price should be applied to this stock? It last traded on the ASX at 78c on 02/05/2022 and has been suspended since then whilst legal action regarding mining and exploration rights is occuring however it still operates given drilling result announcements are made.
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Hi Glenn
My view is the normal accounting approach is to value suspended shares at their last traded price so at 30 June 2023 the value would be $0.78 for AVZ Minerals.
The auditor could consider raising a Part A qualification depending on the materiality of the investment in AVZ Minerals. The financial statements should also refer to the value being based on the price of the share prior to being suspended in the notes to the financial statements.
Another approach could be to review the latest accounts of AVZ Minerals and see if you can estimate a value for the shares. As an example if the company is making a profit can you value it based on a multiple of profits or if making losses can you value it based on value of net assets. (Per its 31/12/2022 accounts it is making losses)
By reviewing the latest accounts you will also be able to see if the auditor has raised any going concern issues in their audit report which may also help to value the shares.
The 31/12/2022 accounts of AVZ Minerals with audit report can be located at:
https://static1.squarespace.com/static/5934d2ae6b8f5beeb5ba23f3/t/6413f8d44518960f84ddf345/1679030494218/20230316+ASX+Annoucement+Half+Yearly+Report+and+Accounts.pdf
Thanks
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