So they've cashed up the timber for 800kAus, roughly 625kCdn ... what happens downunder is people buy and sell 'forestry' in any of its various stages - you can buy a patch freshly planted, buy raw land and plant it yourself, buy a patch ready for harvest, whatever ... it's all worked out according to a reverse amortisation basis [that's not the phrase they use but you know what i mean], and of course supply and demand come into it.
In this case, clearly the timber is some time from being ripe ... which is logical, since they just thinned it last fall [aussie spring], and they wouldn't have done that unless the increased space per tree had time ahead to work its effects ... so the two millions on harvest is still a credible figure imho [under 100/tree, quite possibly conservative], it's just that somebody else will get that now.
They've elected to use the working capital for the WIBN, looks like .... which is fine with me, that's what i got in this thing for ... never got around to asking the details on the timber - time of planting, purchase/lease details on the land, contracts with local forestry consultants, expected harvest time, arrangements with possible purchasers, etc ... timber is a steady business, a bit boring but it pays ... carries its own risks though ... my understanding of the timber biz downunder, last i heard [quite some time ago, and in re NZ not Aus], is that the bloom is off the rose, person needs a sharp pencil now, and has to accept considerable risk of the log market not being strong when you want it. |
