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Surprise for Investors: Powertech Writes Down Colorado Project Value by 83%

Powertech, the technically Canadian but mostly Chinese-controlled company that wants to mine for uranium in the Southern Black Hills, appears to be playing financial tricks on investors. After two years of telling investors that its Colorado Centennial project is worth $14.8 million, Powertech declared in November that Centennial is worth only $2.5 million:

On November 11, Powertech officials released unaudited third quarter financial statements that include a stunning $12.3 million writedown of the dormant Centennial uranium project. The impairment charge occurred a full two years after Powertech essentially stopped spending on the project, calling into question the Canadian company's earlier accounting for the project. The massive writedown of 83% of the project's carrying cost coincides with the sale of 60% of the project to Hong Kong firm Azarga Resources Limited on August 1. Azarga purchased its interest in the project for $1.5 million, thus valuing the entire project at only $2.5 million. Immediately prior to the writedown, the project's balance sheet value was $14.8 million as certified by Powertech CEO Dick Clement [Jim Woodward, "Clement Writes down Centennial Project by $12.3 Million in Questionable Accounting Move," Powertech Exposed, 2014.01.09].

As Woodward reports, Powertech is supposed to comply with International Financial Reporting Standards, which include telling investors about major changes in spending and regulation concerning a project. Woodward cites two major changes in Centennial that investors might have found relevant to their decisions to put money into Powertech. First, the company's spending on Centennial dropped from $17.1 million between 2006 and 2010 to just $300,000 over the last three years. Second, Colorado passed a law in 2008 that, in Woodward's words, "requires operators of in-situ leach uranium mines to restore the ground water to pre-mining water quality or to state water quality standards." Colorado wrote the rules enacting that law in 2010, and Powertech lost a lawsuit to overturn that law in 2010. Yet Powertech never initiated the "impairment testing" that IFRS call for in the face of such a significant regulatory change.

So Powertech made millions of dollars disappear in a stalled project, yet failed to give the investors whom they were soliciting a complete and accurate picture of their financial situation. No wonder Powertech wants to do business in South Dakota: they'd fit right in with Northern Beef Packers and our EB-5 visa investment program.


  1. interested party 2014.01.14

    The New Mexico/South Dakota connections are numerous perhaps even myriad. Good eye, Cory: keep watching for the radioactive waste dump, too.

  2. Porter Lansing 2014.01.14

    Colorado said, "You want to pollute our pristine environment and send the uranium to China to build weapons of mass destruction? C'mon, man..." When SoDak responds appropriately they'll next move to W. Virgina...another bastion of non-regulation.

  3. Loren 2014.01.14

    Geez, I wish I would have taken more business courses in college. With basic math, you can't get this stuff to add up!

  4. Les 2014.01.14

    EB5 and mining in the Black hills? It wouldn't be the first time the Chinese have been taken to the woodshed mining the Black Hills.
    Good catch Cory, the Hills owes you for your attention to Powertec.

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