PLV 0.00% 1.2¢ pluton resources limited

"Buddy - I never said it wasn't an expense - I said WEG as a...

  1. 24,386 Posts.
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    "Buddy - I never said it wasn't an expense - I said WEG as a separate company get 3% of gross turnover ( not profit ) regardless of what price the ore is sold for."

    AKA,

    I don't want to enter into an argument here but, this is what you wrote in your previous posts, and you put me in a spot that I had to clarify and support my arguments.


    "Hypothetically lets say for every $1m of turn over the split would be something like this

    Weg get 3% marketing fee - $30 k

    profit say $400k - Weg get $200 k ( 50% )

    PLV get $200k ( 50 % )

    WEG own 20% of PLV so they get $40k of PLV,s $200k

    So $30k + $200 + $40k = $270k for WEG

    $160k for the rest of PLV shareholders."



    To the above, I replied that you weren't correct as the commission payable to WEG was an expense.



    And this:

    ""The 3% to WEG is off the gross sales and goes directly to them - The $5 per ton marketing fee is a cost that is split 50 / 50 so PLV only get $2.50 from WEG per ton."

    To that I replied once again that the commission is an expense and that it has to be borne by both parties before ascertaining the 50/50 amount.


    And this:

    "Buddy - I dont think your math is correct -

    The 3% to WEG is off the gross sales and goes directly to them - The $5 per ton marketing fee is a cost that is split 50 / 50 so PLV only get $2.50 from WEG per ton.


    In this scenario WEG still gets 3% of the gross sales - The $5 per ton marketing fee is an expense so it reduces the profit effectively taking $2.50 per ton profit out of WEGS 50%.

    The remaining profit is split 50/50."


    To that I also replied that that wasn't the case and that I was going to ask someone.


    Now AKA, you can see as to why you forced me to support my replies to your comments.



    And now to clarify one more thing that still seem to be confusing, you wrote: "In theory they could be receiving 3% on mined ore that is being sold at a loss as is the case in some QLD coal mines at present."

    That could be so, but, on the other hand, we would still be receiving $5 per tonne Management fees regardless of what we will sell the iron ore for.

    So, in the end if we were to sell iron ore at say $51 per tonne (which is what has been stated as being total costs of production), WEG would get $1.53 per tonne as commission, while we would still receive $5 per tonne. With that in mind, we would be miles better off than what WEG would be.

    On the other hand, if we were to sell the iron ore at say $200 per tonne, than WEG would get $1 per tonne more than us. Again that $6 will have to come out from the gross sales amounts before determining what the net profits will be for the 50/50 purposes.

    I think that, for now, we should leave it too that.

    Cheers
    Buddy


 
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