RE: RE: Hardy18 Dec 2017 19:09
Going by his logic if it's a billion in the ground it would be worth 700k, so if it's got 2 billion in the ground it would be 1.4 million, 4 billion, 2.4, 8 billion 4.8million, and so on. Pittance for the resource, but let me go on to something he has completely missed. Let's say to excavate this whole site, costs half a billion, and the previous in ground estimate was half billion, then you wouldn't bother, and probably pay peanuts for the site. But now, the in ground resource is 1.5 billion, extraction cost is the same, but you have 1 billion profit...instead of none. All costs and figures above are hypothetical, but shows it turns a valueless cheap bit of land into a viable asset and the sale price would reflect that. It's no different to having a business that's doing 1 million turnover but costs of 999 thousand and worth 2 quid, and then doubling the turnover to 2 million, and still 999 thousand running costs. That doesn't make the company only worth 4 quid though does it...