OK now I got you.

You are referring to my original scenario of using a base price of $850, but gold price only gone up to $950. This is not the same as the illustration I did for Britnick and Hawkoa in which gold price went to a spectacular level of $1,850. Well here is the calcualtion then:

The base is $ 850 and gold goes to $950 and it costs you $650 an oz to produce the gold... Your WPT per ounce would be $ 100 x 70% = $ 70" OK let's go.....

W/O WFT With WFT Fav./(Unfav.)

Revenue $ 950 $ 950 $ 0

Expense (650) (650) 0

WFT 0 (70) (70)

IBIT $ 300 $ 230 ( 70)

Tax (40%) (120) (92) 28

Net income $ 180 $ 138 $ (42)

Under this scenario the net effect is only a 23.3% hit ($42/$180 = 42%) to the bottom line, which a lot of people might be able to live with. However, the severity of the WFT hit is contingent on the base price of gold as contracted (of course the higher the better), and the future rise in the price of gold (which normally you would want it to be as high as possible as well). For example in the earlier illustration I did of the $700 WFT per oz. the hit is a stunningly high 48.3% ($480/$870 = $48.3%), because the price of gold went up by a staggering $1,000 per oz., not just the $100 per oz illustrated here.

Anyway, I hope there is more to this on how this tax is to be applied. If not, we should be very concerned.