"Feasibility Study" is a commonly used term for a FEL 2 estimate.
FEL - Front End Loading, which is a methodology deployed in Mining and other industries that describes a series of engineering phases with GO/ NO GO stage gates at the end of each. Each stage results in a more and more refined estimate.
A Feasibility Study would have an accuracy of maybe +30/-15%. Specifics can be found on the AACE (American Association of Cost Engineering) website.
A Pre-Feasibility Study is the same thing as an Order of Magnitude estimate, which is referred to in the SAIC report. It has an accuracy of (guessing) +60/ -40%.
My thoughts upon reading the report:
- not professionally written. Problems with capitalization on the front page.
- the English could use some work. Clearly the work of a student, where English may be the second language.
- Table of Contents looks like it is all there. He is going for an ROI.
- he was spoonfed information from JBI. "Information related to machinery, machine´s efficiency, and diesel quality has acquired through email communication with John X, the founder of the company and some other sources of the company."
- you are talking about the number for "Machinery" in Table 31. I see it. His Construction Cost of 54k (Building and other Civil work) looks a little low... and there is no Commissioning cost. I would attribute that to a lack of real-world experience. Then again, it is a third world country, labor is inexpensive. Like wise Project Managemnet, Engineering.
- I like the escalation (Key Assumptions), but I don't think he took into account Time Value of Money (discount rate) when he did the ROI. He has the right idea.
- Not sure why he has multiplied the initial investment by 5. That is not necessary.... it is a one-time thing. oh... he means productions costs.. OK> :)
- not sure where he gets 132 and 6 zeroes from... but he comes up with a good ROI number. Bravo!!
I like it. I would compare the 1.073 Million number to what I am saying about Cost and Profit from machine sales. I think it is similar. What JBI is proposing here is a piece of Equipment. Forgetting about the 8-9 million price tag being thrown around, it fits well with what I am saying JBI can sell as part of the kind of installation discussed in the SAIC Summary document.
In the SAIC document... the 8-9 million price tag wold be the price to the Owner of the overall system. JBI fits in as an Equipment vendor. Numbers as per my previous posts.
If that is the case, then the 1 M figure given here is not unreasonable. All it is is the shipping of a processor similar to what they have ready to go at the fabricator now.
The issue seems to be one of terminology about what exactly a "processor" is.
