Quote:
Originally Posted by Treesplease
Assuming a flat tax for royalties is a bit naive - would have taken them minimal effort to read the potash production tax regs and modeled something based on reality. This looks like a pump and dump - the capital pointe of potash mining.
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To assume they haven't read the potash production tax regs is pretty naive. At this point (pre-feasibility) when all the variables (e.g., production, price etc.) that would go into such a model are assumed as the annual average over the life of the project there really is no need to 'model' the royalty rate as it will work out to the same rate over the life of the mine. A quick calculation shows that based on their assumed price of potash the royalty rate equals $0.057/$1.00, about the 'nickle on the dollar' that Mr. Lingefelter keeps talking about.
They will likely provide a more complex analysis/estimate during the feasibility study.