CANEXUS CORP 6.5 PCT DEBS T.CUS.DB.D

cost overun

[rollon]

The additional costs will be capitalised therefore long term debt vs. short term. Additional depreciation schedule for cash flow. Not good but not the end of the world. The question becomes how much cash will be generated by the operations when they start. Hopefully they didn't sign their agreements using the pre-cost overrun figures to calculate the contract . Now that would really be dumb.

[TimeBuilder]

rollon.....Very good points......Time will tell just how smart this current management IS or WAS...doesnot look very favourable under these current conditions.GLTA    @ 6.40

[itsalie]

agreements are signed based on the market, not what it cost you to build a plant..

[rollon]

So you would calculate your internal rate of return based on market price and not worry about the capital cost???

[itsalie]

the market price is the market price.. it's not going to pay you more to rail oil because you had cost overruns.. same with a oil companies.. oil is 100 bucks a barrel, how much it costs you get a barrel is your business.

[TimeBuilder]

itsalie....Thanks for that...your statement is correct IF the plant is in operation and contracting out customers BUT a testing of the market and maybe locking in a few contracts before a plant is built could make prefect sense in this case ....also.......build it and they will come theory may not float...Only management can answer all our questions...When is next quarter due and will they have a

[itsalie]

perhaps the worst question you have to ask yourself is htf do you run costs over 40%.. really speaks to managment compentency.. probably a good buy at these levels but management has really screwed up as of late.. I think if keystone gets nixed it will give the stock a nice shot in the arm but otherwise there is no great news coming.. I'd bet the next quarter will not be stellar.

[00STS]

Yes, that is what should be asked - first off, how did they get it so wrong and secondly, were the contracts not awarded based on competitive bids with fixed pricing. Ok, there can be some unforseen circumstances but there was no indication that was the case here. So, how do we go from 225 million to 315 million with no signs along the way that things are going off the rails and no opportunity to

[dask]

A cost overrun by 40% on a $225 Mil, is just mind blowing, were  was the CFO and the CEO and the Board ? This  puts whole Magt team into question. Banks watch the progress and use of short term cerdit facilities and will not be pleased with this overrun, lets hope they approve the capitilization of the short term loans to long term cerdits. 40% this just unbelievable!!!

[itsalie]

I agree and kind of changes your investment strategy.. this stock has gone from an investment to speculative in a few short months.

[rollon]

The market price is the market price. I agree. However when I get a news release simply stating that there has been a cost overrun of 40% I need more facts to make an intelligent decision as a shareholder. What does this imply in terms of IRR, NPV and cash flow. Insiders know but we as shareholders are left in the dark. Several years ago I came up with a ratio to give shareholders some guidance

[ferret_ca]

not a nice way to start the day here. 40%is a lot. cost overruns are a pretty normal occurance, but not this much. reading the nr I am thinking possibly the next staged expansion is possibly bigger than originally planned and may be part of the increased cost. I may be out to lunch on this thought. one positive going forward is the low cdn $, all the chemicals are sold in us $ and I recall each

[bobo2000]

Actually, this is a 65% increase in CAPEX as the original estimate was 190 million. This announcement was the second in 6 months according to CIBC. CIBC also stated a downgrade this morning to sector perform from sector outperform and reduced the 18 month SP to $7.50 from $9.00.

[itsalie]

the impact of the cnd dollar will be massive actually and is a very good point.. its expected the dollar will hover around low 90's to high 80's for a few years at least.. I have been trying to figure out what stocks would benefit the most from the dramtic change in currency and how to benefit.. I kind of backed into with the US stocks I own.. I'm up 15% just on the exchange.. and I

[factsfinder]

" ... I have been trying to figure out what stocks would benefit the most ..." AVO.to SVC..to