VGH 0.00% 12.0¢ vision group holdings limited

boomeronrations,I do not think your mine analogy is at all...

  1. 29 Posts.
    boomeronrations,

    I do not think your mine analogy is at all accurate. The earnng capacity of the expensive doctors are on going. At the end of the limited life of your mine, there is little earning capacity.

    A more accurate mining analogy is if a company takes out a lease on a mine that has long term capacity. The company takes out the lease on the assumption that they will bring efficiancies, managment and inceased investment to increase the output over and above the actual owners performance. The lease fee (generally up front) needs to be well above the previous rate, otherwise the owners could carry on as they were.

    The pressure is on the leasees as if they can not make their money before the end of the lease, they are left with nothing, and the owners cleaned up on the lease, and get their mine back - unless hte company wants to take out another expensive lease. This is a problem if they have not even paid off the initial lease yet!!



 
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