Op-Eds

The Moroccan Gold Eldorado, a Myth or a Reality?

Rabat - Recently, a conspiracy theory video about a large gold discovery in Morocco is making rounds online. The video claims that a substantial gold reserve was discovered and is being extracted by a Canadian mining company called Maya Gold and Silver.

We Moroccans are very proud human beings, we love our country and cherish every good news about it (the discovery of 300,000-year old homo sapiens fossils as an example), hence these types of news are not being questioned, on the contrary they are welcomed with open arms and believed as divine scriptures because they are yet another testimony of how rich our land is.

I don’t blame people who got carried away with excitement, after all, Morocco is an important player in the mining sector, we are the third largest producer and first exporter of phosphate, our land produces silver, cement, clays, copper, zinc, … and also gold to an insignificant scale.

According to the United States Geological Survey (USGS) Minerals Resources Program,

Morocco’s gold production is at 1,200 Kg/year, this ranks us number 75 on the global scale.

1,200 Kg of gold is equivalent to $63.7 million, nothing to get excited about. Compare this to China’s $16.2 trillion!

Yet, some section of the population still discard these facts and believe Maya Gold and Silver discovered a massive gold mine, so I dived into its financials and I would like to share the findings here.

Maya Gold and Silver is a public company, their shares trade on the Venture exchange in Toronto and by law, they have to issue audited financial statements since they are a public company. ote: All dollar figures are in Canadian)

On the balance sheet, the company’s major assets are comprised of Cash, inventories and property, plant and equipment.

1.  Cash is reported as $4.2 million, however, the source of that is not from operations rather it’s from the issuance of new shares (diluting existing shareholders) and adding more long-term debt.

2.  Inventories are a mere $828,551 in precious metals. A far cry from the gold reserves that the company has supposedly found!

3.  Property, plant and equipment represent 75% of all assets, yet this number is inflated and should be discounted since the company routinely books impairment charges. (This happens when the value of the asset on the balance sheet is higher than the market value, the difference should be written down)

On the income statement, the company lost $4.5 million last fiscal year, 37% of the loss is attributed to management salaries, consulting fees, bonus payments and some other marketing fees. The rest of the expenses are financing, royalties and taxes. During the fiscal year 2015, the net loss was even worse, almost double. Up to date, the company has had an accumulated deficit of $43.8 million. The company also has no plans of turning any profit anytime soon.

The icing on the cake is the auditor’s report, here is an excerpt “Without modifying our opinion, we draw attention to Note 2 to the consolidated financial statements, which indicate the existence of material uncertainties that may cast significant doubt about the Company’s ability to continue as a going concern” Translation “We do NOT think the company can survive.

Canadian companies dominate the gold mining industry, 5 out of 10 largest companies are Canadians (Maya Gold and Silver is irrelevant), and also the biggest scandal in gold mining history was Canadian- a company called Bre-X Minerals.

This penny stock company reported that they discovered a large gold deposit in Indonesia, sending its stock price to over $280. The company collapsed in 1997 after the gold samples were found to be a fraud.

Maya Gold and Silver is not a fraud in my opinion; however, it’s not as exciting a company as people might think. As for the video circulating online, the financials are a proof that no meaningful wealth is being extracted from Moroccan mountains.

Sid-El Mehdi Lembirik is Founder and Managing Partner at Lembirik Group Investments

Comments

Editorial

Opinions

  • The Moroccan Gold Eldorado
    20

    The Moroccan Gold Eldorado, a Myth or a Reality?

    Rabat - Recently, a conspiracy theory video about a large gold discovery in Morocco is making rounds online. The video claims that a substantial gold reserve was discovered and is being extracted by a Canadian mining company called Maya Gold and Silver. We Moroccans are very proud human beings, we love our country and cherish...

  • Qatar's Emir Sheikh Tamim bin Hamad Al-Thani
    20

    Qatar: How the Tables Are Turning in The Gulf

    Rabat - Amidst harsh sanctions and a long list of demands from its neighbors, Qatar’s ability to thrive under pressure may prove to be problematic for Saudi Arabia. As Saudi Arabia and its coalition attempt to wait out Qatar, the recent spat in the Gulf continues to become more and more global, and severely against...

  • FILE - In this Jan. 20, 2015 file photo, a plume of steam billows from the coal-fired Merrimack Station in Bow, N.H. If the nation doesn’t do more, the U.S. probably won’t quite meet the dramatic heat-trapping gas reduction goal it promised in last year’s Paris agreement to battle climate change, according to a new study. (AP Photo/Jim Cole, File)
    20

    Climate Change : If You Can’t Measure It, You Can’t Fix It

    Chefchaouen - Climate change is happening at home and around the world. Chefchaouen is doing its part by embracing clean energy climate solutions and engaging its citizens in climate action. When it comes to fighting climate change, cities and local leaders are best positioned to lead that charge. Local leaders from coastal to landlocked communities are...

  • 20

    India Orders Internal Probe into Mistaken Use of Morocco-Spain Border Picture

    Hyderabad - The Indian Ministry of Interior on Wednesday ordered an internal investigation to find out how a picture of Morocco-Spain border was used in its annual report to show floodlights along the India-Pakistan border. What is most embarrassing is that the annual report of previous years was tabled during the Budget Session of Indian...

  • Amid Growing Tension, Thousands of Moroccans Stage Pro-Rif March in Rabat
    20

    Neglect in Harsh Soil: The Deep Roots of the Rif Crisis

    Rabat - The ongoing protests in northern Morocco started almost eight months ago, but they have their origin in nearly a century of violent repression by the state. The Rif has, in spite of itself, got involved into a peaceful revolt since the death of the fishmonger Mohcine Fikri at the end of October 2016, a...

  • Tamim Bin Hamad al Thani emir of Qatar
    20

    The Qatar Crisis: What Does It Mean?

    Rabat - The recent diplomatic fallout between Qatar and the rest of the Middle East could have serious economic and geopolitical consequences across the globe. Earlier this week, Qatar’s diplomatic crisis took an extreme turn as several Arab states severed diplomatic ties with the Gulf nation.  The original list of countries in the coalition against...

  • Moroccans spend Laylat al-Qadr, the 26th day of Ramadan, at the Hassan II mosque in Casablanca.
    20

    Ramadan: Not just Abstinence from Daily Intakes 

    By Abdellatif Oudra Rabat - The observance of Ramadan, one of the five pillars of Islam, compels Muslims to fast from sunrise to sunset. But it is not just about abstaining from food or drink.  Ramadan, the ninth month of the Islamic calendar, is observed in commemoration of the revelation of Qur’an to the prophet Mohammad,...

  • Morocco Threatens to Terminate Agriculture Agreement with Europe
    20

    Morocco and the EU: Managing the Future

    Rabat - Morocco enjoys proximity to Europe and is at an advantage of being favoured by the European Union as a close partner on political, economic, and cultural levels. Historical archives and political legacies tie Morocco directly with at least three influential European countries: France, Spain, and England. Demography, kinship, and immigration compel other EU...

  • The Educational and Cultural Implications of the Arab Spring
    20

    The Educational and Cultural Implications of the Arab 'Spring'

    Rabat - In the last ten years or so, the Arab world has seen unprecedented collapses in the realms of politics and economy, among others. World NGOs regularly release area-specific rankings, in which Arab nations commonly rank at the bottom of lists in education, human rights, and income for instance while they top those of...

  • Thousands Hold Peaceful Demonstration in Memory of Mouhcine Fikri
    20

    Al Hoceima and the Pedagogical Exercise

    Ottawa - What makes a democracy different from non-democracy? This is the classical and historical question asked by philosophers over the centuries and deeply questioned in the discipline of political science. Democracy cannot prevent inequality as the case in the United States where inequality is the highest globally. Democracy cannot stop corruption like in Brazil...