4 things VMG / other mining services need to take note when the...

4 things VMG / other mining services need to take note when the company is awarded a contract today (let's say $4m).

1) only around 10-15% of the $4m is the company profit (not the entire $4m).
2) the contract is mostly MOU (memorandum of understanding), means it is non-binding agreement with so many subject to...... (Mainly finance of the other party).
3) the contract may not happen straight away, it may commence at end of the year/next year for 2 yrs duration with progressive payment. STRONG cash flow is crucial here to survive !!!
4) the amount of contract must be backed by company bonding facilities (bigger bond facility = bigger contract handling capabilities).

I know this quite well as I used to engage in the industry itself. Good luck.