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the big guy

01/06/13 3:14 PM

#209793 RE: Rawnoc #209792

Well, you are correct, but any report like this would have to make some pricing assumption such as NYMEX pricing as of a certain date. I worked in Mining for a time and commodity pricing was a key assumption for any kind of analysis. The basic assumptions deserve mention on the summary page, along with the Capital Cost assumptions etc. Pricing used for revenue estimation should be included in the Summary along with ROI. Not EBITDA.

the big guy

01/06/13 3:20 PM

#209795 RE: Rawnoc #209792

Btw Commodity price changes is about the most common Risk Factor in projects. There is usually some kind of mitigation strategy. The last projexct I worked on, they had Options on a commodity price. It went the wrong way and they did not get an expected payment of 9 figures (hundreds of millions). This was m$oney(sic) slated for the project which suddenly was not available.