NAG had agreement with Alan for leasing coal property from Alan. The land has coal seam on average 91cm only. NAG agreed to pay Bob for mining and loading coal on the truck on a charge of $40/ton. NAG found Charles who was willing to buy the coal at the price of $58/ton, $8-$10 higher than the market price. (just using common names for easy communications)
There is no clear information from this release:
1. What are NAG’s obligations to Alan for this agreement? How much should NAG pay to get the coal lease.
2. What is the relationship between Alan & Bob?
3. will “silly” Charles still buy the coal in Oct or later $8-$10/ton more than market fair price?
4. I think Bob won’t eat the transportation cost, does NAG have to pay the transportation cost to the truck company?
5. Will NAG send or hire site manager and clerks to run the coal mine? what is the overhead cost? How much has NAG already spent for advertising everywhere?
Think of above questions and make your own judgments if NAG has a good deal.