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  #31  
Old 08-09-2012, 05:04 PM
komorgan komorgan is offline
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Originally Posted by irana View Post
It is 5 years later.
Typo. My bad.
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  #32  
Old 08-09-2012, 05:07 PM
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I still need help with calculating the inflation!

I assume Energy cost & delievery cost have also changed, since even the first Q (with no inflation) non-labour cost is not matching with the expected value. Any thoughts?
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  #33  
Old 08-09-2012, 05:23 PM
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I still need help with calculating the inflation!

I assume Energy cost & delievery cost have also changed, since even the first Q (with no inflation) non-labour cost is not matching with the expected value. Any thoughts?
Even though we don't know the exact values for the 3 different non-labor costs in the first quarter, why don't we just assume that these 3 costs will rise with inflation, as they do in the current model. With this assumption, we should get a pretty good estimate of the inflation rate in a given quarter by dividing the total non-labor cost in that quarter by that observed in the previous quarter (i.e. Quarter X Non-Labor Cost divided by Quarter X - 1 Non-Labor Cost).

But when you do this, be careful when estimating the inflation rate for Quarter 19 (the next-to-last quarter). The sharp drop in non-labor cost between Quarter 18 and 19 is attributed (mostly) to the change from a 2-shift quarter to a 1-shift quarter, not inflation.
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  #34  
Old 08-09-2012, 05:28 PM
IIRC IIRC is offline
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Kind of shooting from the hip here (don't quite remember), but if you recall from the sensativity testing, Energy seemed to be a critical assumption. So in light of Other Costs = (Energy, Delivery, Equipment) and these are tied to inflation...so instead of messing with inflation, how about an Energy factor? Then do A/E. That's was/is my approach for my second attempt. I feel pretty good about it. Response?
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  #35  
Old 08-09-2012, 05:36 PM
komorgan komorgan is offline
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Originally Posted by IIRC View Post
Kind of shooting from the hip here (don't quite remember), but if you recall from the sensativity testing, Energy seemed to be a critical assumption. So in light of Other Costs = (Energy, Delivery, Equipment) and these are tied to inflation...so instead of messing with inflation, how about an Energy factor? Then do A/E. That's was/is my approach for my second attempt. I feel pretty good about it. Response?
But how would you compute the A/E? We know the actual total non-labor costs each quarter, but we don't know how much of this is made up of energy cost.
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  #36  
Old 08-09-2012, 05:41 PM
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Um, I did do an A/E, trying to recall. I think what I did was

A = Total Other Costs /

E = (Energy*a factor + Equipment as is + Delivery as is).

In short, moving forward I recommended dropping Energy by a smidge (.98) IIRC.
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  #37  
Old 08-09-2012, 05:48 PM
ebeebs ebeebs is offline
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How did you change the inflation? There are way too many variables in the Total cost!!
I edited my post. I meant exchange rate, not inflation.

A few posts down from my original you'll see I corrected myself.

I argued to keep inflation the same. I bumped exchange to the new rate, and labor cost a (whatever one was linked to gold). I think I kept the constant part the same. I did not change "other" labor costs.
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  #38  
Old 08-09-2012, 06:00 PM
komorgan komorgan is offline
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Originally Posted by IIRC View Post
Kind of shooting from the hip here (don't quite remember), but if you recall from the sensativity testing, Energy seemed to be a critical assumption. So in light of Other Costs = (Energy, Delivery, Equipment) and these are tied to inflation...so instead of messing with inflation, how about an Energy factor? Then do A/E. That's was/is my approach for my second attempt. I feel pretty good about it. Response?
Why did you think energy cost was a "critical" assumption. In my opinion, I don't think it's all that critical for the following reason:

Currently, the model just uses a starting value for energy cost in the first quarter and then rises with inflation in subsequent quarters. I'm assuming that this starting value is based on Can-Do's recent energy costs in similar mining ventures. I don't think these costs would change all that much in just one quarter.

Any thoughts?
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  #39  
Old 08-09-2012, 06:06 PM
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Um, right, that was kind of subjective on my part. When I sensativity test we (I) had to establish how much to stress in the adverse direction...

Well, instead of just X% all the way across, I did %'s that (subjectively/objectively) attempted to capture volatility, i.e. Exchange has some historical volatility, so move it 10% aversely...Equipment likely has no surprises (volatility) so I only moved it 3% adversly.

Energy IMO is somewhat volatile, so I gave it a little more stress and the effect on ending cash was significantly more than say Equipment or Delivery.
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  #40  
Old 08-09-2012, 06:09 PM
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What do you mean by " I don't think these costs would change all that much in just one quarter." I was looking at 18 quarters (2 shifts) of the actual. And I also limited my Actual to 18 quarters... hope this makes sense. I'm shooting from memory. Starting over right now.
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