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UK’s auditors beef up going concern scrutiny amid pandemic

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Auditors in the UK — under fire for several years over their failure to spot high-profile company meltdowns — have introduced additional checks on companies since the pandemic started, to bolster their ability to assess whether they are fit to continue business, the accounting sector watchdog said in a formal review of their practices.

The seven largest firms — PwC, EY, KPMG, Deloitte, Grant Thornton, BDO and Mazars — have expanded the scope of required consultations and guidance for audit teams, as well as increasing the level of regular communications with these departments.

This has helped increase auditors’ willingness to challenge company management over stress tests and financial statements, the Financial Reporting Council said on 2 July.

The regulator concluded that “the additional policies and procedures introduced were appropriate and reasonably consistent across the firms”.

“The pervasive and uncertain impact of Covid-19 has made assessing whether companies have a material uncertainty to going concern much more difficult for many boards and their auditors.  No-one has a crystal ball, but investors do expect appropriate consideration and disclosure of uncertainties,” said David Rule, the FRC’s executive director of supervision.

The FRC’s review will continue, it said, with a report on the next stage — an assessment of completed audits — due later this year.

The findings will come as a welcome boost for auditors following several years of increased scrutiny of the profession, which has included increased rebukes and fines from the FRC over shortcomings.

The quality of audit has been thrown under the microscope yet again by EY’s role in the collapse of German payment provider Wirecard. Scrutiny has also intensified due to the pandemic, which has made it difficult for auditors to assess going concern reports due to huge disruptions caused by the enforced restrictions and lockdowns. Furthermore, the economic impact of the coronavirus has increased the risk of businesses collapsing.

To contact the author of this story with feedback or news, email Emily Horton

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Gun buyback plan and Sarah Cooper gets Netflix special: In The News for Aug. 13

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In The News is a roundup of stories from The Canadian Press designed to kickstart your day. Here is what’s on the radar of our editors for the morning of Aug. 13.

What we are watching in Canada …

Bloc Quebecois Yves-Francois Blanchet said Wednesday his party will force a confidence vote against the Liberal government this fall unless Prime Minister Justin Trudeau, his finance minister and his chief of staff resign.

But the New Democrats don’t seem ready to back the effort and with 24 MPs, they have enough seats in the House of Commons to be the deciding factor in whether Canada moves toward a fall election in the middle of a pandemic.

Blanchet first made his threat Wednesday morning before a planned sitting of the hybrid House of Commons in Ottawa. He reiterated it later in the Commons, expressing disgust Trudeau hadn’t even bothered to show up.

Trudeau is on a two-week summer vacation with his family. Blanchet said in French that he had also been on vacation but chose to end it in time to be able to attend, and that Trudeau’s absence sealed the deal on pushing for a fall election.

“We have to ask, is this government still worthy of our confidence and they just gave us the answer,” Blanchet said in French, before storming out of the chamber in a dramatic huff. He later returned for the rest of the question period.

Blanchet earlier told reporters the revelations around the WE Charity controversy — as well as new details about a contract for the commercial rent-relief program that went to a company employing the husband of Katie Telford, who is Trudeau’s chief of staff — prove the Liberal government is no longer trustworthy.

Also this …

The federal government is turning to the private sector to design and possibly help run a massive buyback of newly prohibited firearms.

Public Safety Canada has invited 15 consulting firms to come up with a “range of options and approaches” for the planned program to compensate gun owners.

The Liberals outlawed a wide range of firearms in early May, saying the guns were designed for the battlefield, not hunting or sport shooting.

The ban covers some 1,500 models and variants of what the government considers assault-style weapons, meaning they can no longer be legally used, sold or imported.

In announcing the ban, the government proposed a program that would allow current owners to receive compensation for turning in the designated firearms or keep them through an exemption process yet to be worked out.

Sport shooters, firearm rights advocates and some Conservative MPs have questioned the value of the measures in fighting crime.

ICYMI (in case you missed it) …

Sarah Cooper, whose lip-sync parodies of President Donald Trump are an online sensation, is coming to Netflix with a variety special.

“Everything’s Fine,” starring the writer and comedian, will debut this fall, the streaming service said Wednesday.

Cooper is working with heavyweight talent on the special: Maya Rudolph is the executive producer and Nastasha Lyonne (“Russian Doll”) is directing.

The show will include “vignettes dealing with issues of politics, race, gender, class, and other light subjects,” Netflix said, with guest performers taking part in short interviews, sketches and “more shenanigans.”

In her early Trump satiric video, “How to Medical,” an expressive Cooper silently mouthed along to the president’s musings about the possibilities of sunlight and disinfectant as coronavirus antidotes.

Cooper’s comedic how-to books include “100 Tricks to Appear Smart in Meetings” and “How to be Successful Without Hurting Men’s Feelings.”

What we are watching in the U.S. …

Joe Biden and Kamala Harris delivered an aggressive one-two attack on the character and performance of President Donald Trump on Wednesday, as they made their election case for the first time as running mates.

Biden, a 77-year-old white man, embraced the significance of naming the first Black woman to a major party’s presidential ticket, but he also focused on other attributes Harris brings to the ticket. He hailed the California senator, the 55-year-old former prosecutor who a year ago excoriated Biden on a primary debate stage, as the right woman to help him defeat Trump and then lead a nation facing crises in triplicate: a pandemic, wounded economy and long-simmering reckoning with racism.

Harris, Biden declared at a high school gymnasium in his hometown of Wilmington, Delaware, is “smart, she’s tough, she’s experienced, she’s a proven fighter for the backbone of this country.”

“Kamala knows how to govern. She knows how to make the hard calls. She’s ready to do this job on day one,” he said.

Reflecting the coronavirus pandemic, both candidates came onstage wearing protective masks in a high school gym with relatively few in attendance, not in a hall filled with cheering supporters as would normally be the case. Both spoke without masks but did not physically embrace.

Biden praised her experience vigorously questioning Trump administration officials in the Senate, and highlighted the historic nature of her pick, noting she’s the daughter of immigrants from India and Jamaica.

What we are watching in the rest of the world …

Three people were killed and six others injured Wednesday when a passenger train derailed in northeast Scotland after heavy rain and flooding hit the area.

The train driver was believed to be among the dead, British Transport Police said. The Rail, Maritime and Transport union said that the train conductor was also believed killed. Formal identification has yet to take place. Six people were hospitalized, but their injuries are not considered serious.

Images from the scene show that several cars of the four-carriage train had left the tracks and one had tumbled down an embankment. Smoke was seen billowing from the wreck. Air ambulances and coast guard helicopters came and went as the rescue operation unfolded.

Prime Minister Boris Johnson said a police investigation aims to find out what caused the derailment and ensure “nothing like this happens again.”

“As I understand there was about a month’s worth of rainfall in a very short period which undoubtedly aggravated the problem there,” he added.

Torrential rain had caused flooding and travel disruptions in Scotland, and on Wednesday morning Network Rail Scotland tweeted warnings of a landslip affecting services in the area.

Also this…

Pakistan’s information minister said Wednesday he hoped that five new bills passed in Parliament aimed at curbing terror financing and money laundering will lead to the country’s removal from an international watch list.

Shibli Faraz commented hours after the National Assembly, the powerful lower house of Parliament, passed bills to meet goals set by the Paris-based Financial Action Task Force in February. The goals included targeting individuals linked to money laundering and terror financing.

The Financial Action Task Force is a top anti-terrorism monitoring group.

The task force said in February that Pakistan had fulfilled 14 of 27 steps to get off the watch list, but still needed to do more to track money transfers and investigate and prosecute terrorism-related financiers.

Since then, Pakistan has detained and convicted several militants, including India’s most wanted man, Hafiz Saeed, who is now serving a five-year prison term.

Pakistan wants to get off the task force’s “gray list,” the colour code for countries that are only partially fulfilling international rules for fighting terrorism financing and money laundering. It was placed on the list by the task force n 2012 after concluding that Pakistan was not fully compliant with the standards for effectively combating money-laundering and terror financing. The group removed Pakistan from the gray list in 2015 because of its improvement in complying. However, it was added to the list again in 2018.

This report by The Canadian Press was first published on August 13, 2020.



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Fannie, Freddie Will Impose New Fee on Most Mortgage Refinances

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(Bloomberg) — Fannie Mae and Freddie Mac are planning to charge an additional fee on most mortgage refinance loans that could raise costs for borrowers trying to take advantage of historically low rates in an uncertain economy.

The mortgage giants, which have been under government control since 2008, announced the plan late Wednesday, saying the new 0.5% fee is meant to mitigate their risk in light of the Covid-19 pandemic. It would apply to most refinances involving the companies.

The companies and their regulator, the Federal Housing Finance Agency, have tread carefully during the pandemic, as some parts of the mortgage market temporarily seized up in March before slowly recovering. FHFA Director Mark Calabria, an appointee of President Donald Trump, has been pushing to end U.S. control of the companies, a task that has been impeded by the pandemic and ensuing economic downturn.

Fannie and Freddie don’t make loans. They buy them from lenders, wrap them into securities and guarantee the repayment of principal and interest to investors. The companies said the new fee would apply to loans they purchase beginning next month, which could mean borrowers see the new costs almost immediately. Lenders could absorb some of the costs themselves rather than pass them on to consumers.

An FHFA spokeswoman said Fannie and Freddie requested the changes based on their projected pandemic-related losses.

The Mortgage Bankers Association, a trade group for lenders, said the fee would raise costs for the typical borrower by $1,400. MBA President Bob Broeksmit said in a statement that the announcement “flies in the face of the administration’s recent executive actions urging federal agencies to take all measures within their authorities to support struggling homeowners.”

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SilverCrest Metals Reports Second Quarter Financial Results and Update

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Vancouver, British Columbia–(Newsfile Corp. – August 12, 2020) – SilverCrest Metals Inc. (TSX: SIL) (NYSE American: SILV) (“SilverCrest” or the “Company”) is pleased to report the Company’s unaudited financial results for the second quarter of 2020 and an update on activities. The unaudited condensed interim consolidated financial statements and management’s discussion and analysis for the three and six months ended June 30, 2020 are available under the Company’s SEDAR profile on www.sedar.com or on SilverCrest’s website www.silvercrestmetals.com.

Highlights – June 30, 2020

  • The Company re-started exploration and development activities at its Las Chispas Project (“Las Chispas”), located in Sonora, Mexico, after a temporary suspension from March 30, 2020 to May 23, 2020 in response to COVID-19;

  • During the first half of 2020 (“H1, 2020”), the exploration team completed 97,700 metres of in-fill and expansion drilling. Further results from this work will be announced after compilation;

  • During H1, 2020, the underground development team completed approximately 2.1 kilometres of underground decline and lateral development, and stockpiled an additional estimated 12,000 tonnes of mineralized material for a total stockpile of an estimated 41,000 tonnes at estimated diluted grade of 1,000 gpt silver equivalent (“AgEq” at 75:1, Ag:Au);

  • Las Chispas construction activities continued with the building of the administration and warehouse facilities, the temporary quarantined COVID-19 camp, and the production water pumping stations.

  • The Company continued to work with its consultants to advance the feasibility study for release by the end of 2020, provided that COVID-19 interruptions are minimal;

  • As at July 31, 2020, SilverCrest is well funded with cash and cash equivalents of $211.2 million (US$157.0 million) having recently completed two non-brokered private placements in April 2020 at $7.50 per share for aggregate proceeds of $128 million; and

  • Subsequent to the second quarter, the Company made a payment of $2.1 million (or US$1.6 million) to acquire mining concessions located outside of the Las Chispas area but in Sonora, Mexico.

COVID-19 Update

The Company continues to adjust to the unprecedented COVID-19 conditions. At Las Chispas, the Company installed a fully confined temporary camp with a capacity for 160 essential persons to continue its exploration, underground development, and construction of early works with the objective of limiting potential exposure of personnel and nearby communities to the virus. Camp expansion is planned, over the next several months, to house up to 500 essential persons in order to undertake increased construction activities. Before entering the confined camp, all persons are tested for COVID-19 (rRT-PCR test) and following receipt of negative tests, are transported to site using strict health and safety protocols. Once on site, all appropriate COVID-19 related protocols are enforced. As of June 30, 2020, the Company incurred approximately $328,000 of expenditures related to COVID-19, the majority of which were for the construction and operation of the temporary camp at Las Chispas and for providing assistance with medical needs in the local communities.

Exploration Update

During H1, 2020, the Company completed approximately 97,700 metres of infill and expansion drilling (66% in-fill and 34% expansion). Target budgeted drilling of an estimated 48,000 metres is planned for the second half (“H2”) of 2020, focusing on high-grade resource expansion. As of June 30, 2020, the Company had drilled an estimated cumulative 400,000 metres (1,480 drill holes) since inception of the project. Results since February 2019 (drilling cut-off date for the Preliminary Economic Assessment filed on SEDAR July 5, 2019) are expected to be presented in a sixth technical report, the feasibility study, anticipated in Q4, 2020, subject to further impacts caused by the COVID-19 pandemic.

From January 1, 2020, the Company announced further in-fill and expansion drill results, which included:

  • Expansion of the Babi Sur Vein (news release dated January 20, 2020);

  • Discovery of Area 200 zone and additional drill results from the Babicanora Norte Vein (news release dated February 18, 2020); and

  • Expansion of the Babi Vista Vein (news releases dated March 9, 2020 and May 12, 2020).

The Company has acquired mining concessions in Sonora, Mexico outside of the Las Chispas area. Further details will be announced when appropriate.

Operations Update

During H1, 2020, the Company completed approximately 2.1 km of underground decline and lateral development, including 400 metres of in-vein development, and stockpiled an additional estimated 12,000 tonnes of mineralized material. By the end of July 2020, cumulatively, the Company had completed approximately 5.5 km of underground development, including 1.2 km of in-vein development, and stockpiled approximately 41,000 tonnes of mineralized material with an estimated diluted grade 6.78 Au and 500 gpt Ag, or 1,000 gpt AgEq. The Company has budgeted 500 metres per month of underground development for H2, 2020, which is in line with actual underground development achieved per month during H1, 2020.

Other ongoing site work during H1, 2020 included feasibility site assessment work, infrastructure construction activities as outlined in above Highlights, an extensive metallurgical test program (see news release dated March 5, 2020), completion of a vent raise associated with the Santa Rosa decline and underground workings, and permitting for various additional work. The feasibility study is progressing in parallel with the exploration and development efforts. As of May 2020, the Company completed its basic engineering study and subsequently initiated detailed engineering, which will carry on to the first quarter of 2021. Procurement of long lead equipment items are expected to start in Q4, 2020.

Las Chispas Expenditures

During H1, 2020, the Company incurred $30.1 million of expenditures at Las Chispas, for a cumulative total of $106.8 million since inception. To June 30, 2020, the Company had also capitalized acquisition costs of $5.5 million for the Las Chispas Property for cumulative property expenditures of $112.3 million.

Financial Results

At June 30, 2020, the Company held $219.4 million (December 31, 2019 – $110.4 million) as cash and cash equivalents. The primary factors that contributed to the increase in cash and cash equivalents from December 31, 2019 to June 30, 2020 include $141.2 million generated by financing activities, including the completion of the private placement (see new release dated April 17, 2020), the two private placements with SSR Mining Inc. (See news releases dated January 10, 2020 and April 24, 2020) and the exercise of options. These cash inflows were offset by $30.1 million incurred on the exploration program at Las Chispas.

During the three and six months ended June 30, 2020, comprehensive losses were $17.1 million and $33.7 million, respectively, compared to $14.1 million and $23.5 million for the three and six months ended June 30, 2019.

The Qualified Person under National Instrument 43-101 Standards of Disclosure for Mineral Projects for this news release is N. Eric Fier, CPG, P.Eng, and CEO for SilverCrest, who has reviewed and approved its contents.

ABOUT SILVERCREST METALS INC.

SilverCrest is a Canadian precious metals exploration company headquartered in Vancouver, BC, that is focused on new discoveries, value-added acquisitions and targeting production in Mexico’s historic precious metal districts. The Company’s current focus is on the high-grade, historic Las Chispas mining district in Sonora, Mexico. The Las Chispas Project consists of 28 mineral concessions, of which the Company has 100% ownership and where all the known mineral resources of the Company are located. SilverCrest is the first company to successfully drill-test the historic Las Chispas Property resulting in numerous high-grade precious metal discoveries. The Company is led by a proven management team in all aspects of the precious metal mining sector, including taking projects through discovery, finance, on time and on budget construction, and production.

FORWARD-LOOKING STATEMENTS

This news release contains “forward-looking statements” and “forward-looking information” (collectively, “forward-looking statements”) within the meaning of Canadian and United States securities legislation. These include, without limitation, statements with respect to: the strategic plans, timing and expectations for the Company’s exploration and drilling programs of the Las Chispas Property, including preparing a feasibility study; information with respect to high grade areas and size of veins projected from underground sampling results and drilling results; and the possibility of future mining at the Las Chispas Property. Such forward-looking statements or information are based on a number of assumptions, which may prove to be incorrect. Assumptions have been made regarding, among other things: impact of the COVID-19 pandemic on operations and future operating costs; the reliability of mineralization and metallurgical test estimates, the conditions in general economic and financial markets; availability of skilled labour; timing and amount of expenditures related to underground development and drilling programs; and effects of regulation by governmental agencies. The actual results could differ materially from those anticipated in these forward-looking statements as a result of risk factors including: uncertainty as to the impact and duration of the COVID-19 pandemic; the timing and content of work programs; results of exploration activities; the interpretation of drilling results and other geological data; receipt, maintenance and security of permits and mineral property titles; environmental and other regulatory risks; project cost overruns or unanticipated costs and expenses; and general market and industry conditions. Forward-looking statements are based on the expectations and opinions of the Company’s management on the date the statements are made. The assumptions used in the preparation of such statements, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statements were made. The Company undertakes no obligation to update or revise any forward-looking statements included in this news release if these beliefs, estimates and opinions or other circumstances should change, except as otherwise required by applicable law.

N. Eric Fier, CPG, P.Eng
Chief Executive Officer
SilverCrest Metals Inc.

For Further Information:

SilverCrest Metals Inc.
Contact: Jacy Zerb, Investor Relations
Telephone: +1 (604) 694-1730
Fax: +1 (604) 357-1313
Toll Free: 1-866-691-1730 (Canada & USA)
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.
Website: www.silvercrestmetals.com
570 Granville Street, Suite 501
Vancouver, British Columbia V6C 3P1

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