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Sparem
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Posted - 2009.03.29 19:10:00 -
[61]
Originally by: PassingThrough I prefer:
Profit = [Sell Price ] - [Cost of Materials] - [Production Fees] - [Taxes].
I don't care about what the minerals are valued at by someone else. I only care about what I spent to get them.
What's so impossible about that? I don't mine all of my minerals so I do have some mineral production costs.
I'm not saying that your accounting practice is wrong. I'm just saying that it's not the accounting practice that I use in a video game where most of the reasons for those real life accounting practices don't apply.
You play the game the way you want to and I'll play it how I want to.
At the end of the day I'll be happy about making lots of profit and you'll be upset that someone has undercut you and you are now loosing isk.
Sounds like I win.
It's ok to do it differently, but it's not ok to do it a way different than yours because you win and they lose, right?
Yes, there is a value/cost for mining, unless your time is completely worthless and you have absolutely nothing that you could possibly be doing at the time.
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Professor Leech
Transmetropolitan
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Posted - 2009.03.29 20:38:00 -
[62]
Originally by: Sparem
Yes, there is a value/cost for mining, unless your time is completely worthless and you have absolutely nothing that you could possibly be doing at the time.
Other things you could be doing in game such as exploration, mission running, trading, etc.
If you have a profitable item to sell why not just buy the minerals and run production lines 24/7. You can buy the minerals in greater volume than what you would ever mine yourself.
If people want to value their time and assets at zero that's fine. You can perceive the game whatever way you want. If someone ends up selling below mineral cost stop complaining -> buy -> reprocess -> sell minerals.
Originally by: Crawe DeRaven this thread is obviously going places
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Sep'Shoni
Gallente Carpe Diem inc.
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Posted - 2009.03.29 20:55:00 -
[63]
I'm a newb so I am still figuring this stuff out, but when calculating costs I value my minerals at the highest sell order I could reasonably get someone to buy within a reasonable amount of time within a distance I am willing to haul.
I probably leave some potential profit on the table because I would get bored doing all of one thing and watching my wallet flash is only one component in the enjoyment of the game, but doing it this way the past month (since I started reading the forums and figured out the costs better), has left me with more in my wallet than some of the much, much more experienced characters in my corp.
I was increasing the amount in my wallet before, but nowhere near as fast as I am now. Sep'Shoni
Newb looking for a home. |
Agor Dirdonen
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Posted - 2009.03.29 21:49:00 -
[64]
Edited by: Agor Dirdonen on 29/03/2009 21:55:40
Originally by: PassingThrough I prefer:
Profit = [Sell Price ] - [Cost of Materials] - [Production Fees] - [Taxes].
I don't care about what the minerals are valued at by someone else. I only care about what I spent to get them.
What's so impossible about that? I don't mine all of my minerals so I do have some mineral production costs.
I'm not saying that your accounting practice is wrong. I'm just saying that it's not the accounting practice that I use in a video game where most of the reasons for those real life accounting practices don't apply.
You play the game the way you want to and I'll play it how I want to.
At the end of the day I'll be happy about making lots of profit and you'll be upset that someone has undercut you and you are now loosing isk.
Sounds like I win.
Now, ok, I can follow you here for a bit. At least when you say that you want to have fun in a game and actually want to produce stuff. The money you make from that production is less important then the good feeling you 'made' something yourself. If that's your thing, then you are right and it doesn't matter how much your mined minerals cost. Heck, it doesn't even matter much if you sell for 50 percent below average market price either most likely.
But if you say that you like to make huge profits, then lets look at your equation again: Profit = [Sell Price ] - [Cost of Materials] - [Production Fees] - [Taxes].
Instead, we won't use the price of a module but the price for the minerals.
As [Production Fees] and [Taxes] become 0 (no production), it reduces too: Profit = [Mineral Sell Price ] - [Cost of Materials]
You set [Cost of Materials] to 0 as you mined the minerals yourself or have them simply lying around, fine, no problem. Equation becomes: Profit = [Mineral Sell Price ]
Now, if this profit is higher then the profit of actually making the product and selling it, why even bother making it?
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Arickson
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Posted - 2009.03.29 22:09:00 -
[65]
Originally by: Imertu Solientai When I mine I do not pay anything for doing it. I can then refine that ore for 0 ISK too. I paid 0 ISK for the minerals. They are therefore free. This lets me manufacture stuff and sell it for a lot below market price, making me quick profits!
Your logic isn't as correct as you think. Say a thorax only took 100 tritanium and you mined 100 tritanium. That 100 tritanium would be worth 400 isk. Now say you turned that 100 tritanium into a thorax that only sells for 300 isk. You lose money that you could of gained.
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fdgfgfh
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Posted - 2009.03.29 23:24:00 -
[66]
Edited by: fdgfgfh on 29/03/2009 23:24:55 The easiest way to explain it is you are not doing just one thing.
Your view is: Mining û Production = 9.5 million profit, and you are correct. But if you want to maximise your profit you need to break it down and not view it as one big operation but rather lots of little ones. Here is how
I see it: Mining û 8 milling worth of ore Refining û refined ore into 8.5mill worth of materials _______Hauling û moved minerals to trade hub now worth 10million Manufacturing û made a 8 million value item Hauling û Moved module to trade hub worth 9.5million.
This is a simplistic view but shows that instead of making the item I hauled the raw minerals to the trade hub I could have made more money then manufacturing the module. Mining = 8mill profit Refining = .5mill profit Hauling = 1.5mill profit Manufacturing = .5 mill loss
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Sidrat Flush
Caldari Life is Experience
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Posted - 2009.03.30 00:15:00 -
[67]
I hope we have discovered the language barrier that each side had.
The minerals you mine are FREE (except the cost of the mining lasers which do break).
HOWEVER as has been stated before why build ANY item that you plan to put on the market if the minerals could be sold to someone else for MORE Isk than the built item?
I have to get back to the spreadsheet now.
-------------------------- Life is about memories the more the better. Eve Online Batch Calculator |
Pwett
QUANT Corp. QUANT Hegemony
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Posted - 2009.03.30 13:42:00 -
[68]
Oh my, I knew someone would take the bait on this thread.
Listen, if you think your minerals have no value, then fine. I will buy everything you produce, reprocess it, and sell the minerals back on the market. I'm not going to argue as your kind makes me hundreds of millions of isk every month for about 15 minutes worth of work. _______________ <Q> QUANT Hegemony QUANT is rebuilding, EVE-Mail me for recruitment info. Item Database |
Sidrat Flush
Caldari Life is Experience
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Posted - 2009.03.30 14:14:00 -
[69]
I hope this thread can be stickied and locked so that the new industrialists can understand the differences between minimum and maximum profit.
Some would say, real and false profit, but not me.
Question - As minerals have a price (fluctuating of course), has no one realised that buildable items have a current minimum price as well, based on the mineral input?
-------------------------- Life is about memories the more the better. Eve Online Batch Calculator |
Breaker77
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Posted - 2009.03.30 17:21:00 -
[70]
Originally by: Sidrat Flush Question - As minerals have a price (fluctuating of course), has no one realised that buildable items have a current minimum price as well, based on the mineral input?
I noticed it and made quite a nice profit when Megacyte went from ~2100 to ~3300 a unit
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Ms Delerium
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Posted - 2009.03.30 17:50:00 -
[71]
Why would you ever need to know the costs? Who cares?
You producing something. And get a profit (isk and fun). For example PVP is not "isk-profitable" but its too much fun-profitable so...
About how much you need isk to sell your items , minerals or ships... depFnds on regional market
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Agor Dirdonen
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Posted - 2009.03.30 22:16:00 -
[72]
Edited by: Agor Dirdonen on 30/03/2009 22:20:12 edit: ah nvm... I give up... it's like carrying water to the ocean.
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Imertu Solientai
Gallente
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Posted - 2009.03.30 22:25:00 -
[73]
Originally by: Arickson
Originally by: Imertu Solientai When I mine I do not pay anything for doing it. I can then refine that ore for 0 ISK too. I paid 0 ISK for the minerals. They are therefore free. This lets me manufacture stuff and sell it for a lot below market price, making me quick profits!
Your logic isn't as correct as you think. Say a thorax only took 100 tritanium and you mined 100 tritanium. That 100 tritanium would be worth 400 isk. Now say you turned that 100 tritanium into a thorax that only sells for 300 isk. You lose money that you could of gained.
But I didn't pay anything for the minerals so I actually made money. The minerals I mined had no value because I didn't pay anything for them.
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Ashen Angel
Minmatar Ashen's Wings
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Posted - 2009.03.30 23:00:00 -
[74]
Originally by: Imertu Solientai
Originally by: Arickson
Originally by: Imertu Solientai When I mine I do not pay anything for doing it. I can then refine that ore for 0 ISK too. I paid 0 ISK for the minerals. They are therefore free. This lets me manufacture stuff and sell it for a lot below market price, making me quick profits!
Your logic isn't as correct as you think. Say a thorax only took 100 tritanium and you mined 100 tritanium. That 100 tritanium would be worth 400 isk. Now say you turned that 100 tritanium into a thorax that only sells for 300 isk. You lose money that you could of gained.
But I didn't pay anything for the minerals so I actually made money. The minerals I mined had no value because I didn't pay anything for them.
So can I have them if your time is worthless, and the ore/minerals have no value?
Oh, wait you wouldn't just give them away... so they do have value. That value is what you could sell them for since they cost you time.
It's why when looking at ore yields and which ores to mine the common measure is: isk per hour based on an average price for the ore/minerals.
So time = cost
So how do you value your time?
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Susung
Alt Anti-defamation League
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Posted - 2009.03.30 23:41:00 -
[75]
AAARRRGGGG Time is not your only investment when you mine, if you sell a ship with 6 mil worth of mins in it for 5 mil you would have been better off just selling the mins. You lost the cost of the manufacturing job as well as a mil worth of minerals.
There are websites (EVEINFO.com <- register, use it and love it) and spreadsheets out there that make the math easy. when you put something on the market for less than its min value you make baby jesus cry!!!! Not to mention that it sells fast because somebody else who has done their homework sees your price buys your stuff and resells it. Please don't be stupid.
I generally use the average price in the region i am in.
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Ms Delerium
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Posted - 2009.03.31 00:16:00 -
[76]
this is the classic minerals-I-mine-are-free discussion lol
Im one of those who thinks that they are not free --> they cost your time. But once again, how to measure this? Some people can play for 2 hours a week, others play 15 hours a day lol. Obviously time is more valuable for the former...
And always, always, would be another more profitable thing to do. If you are mining, u can go 0.0 for more profit. Or you could be trading on Jita instead. Or if you are trading in jita, u could still be doing it better bla bla.........
About manufacturing costs. Its not that easy... what if I enjoy making ships? Ships that are going to be used by my gang mates? I will be proud of bringing them for the cause What if these modules im manufacturing are hard to get in this region? or im in deep lowsec and want to open some market? Im not gonna operate in Jita, who cares about jita in this case?
and so on.
Just manufacture and enjoy
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Professor Leech
Transmetropolitan
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Posted - 2009.03.31 01:40:00 -
[77]
What if you qualify or quantify the points that you are trying to make? What if you stop trolling?
Note that trying to discuss having fun in a game is an outrage to most of the posters in this thread. Keep enjoying what you're doing.
Originally by: Crawe DeRaven this thread is obviously going places
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Herschel Yamamoto
Bloodmoney Incorporated
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Posted - 2009.03.31 01:43:00 -
[78]
I value minerals on hand at whatever it'd cost me to go buy them, i.e., the lowest sufficient-quantity sell order. I don't tend to do my internal accounting in anywhere near that much detail, but in principle, each step of the operation should be profitable or I'd outsource it. If I mine minerals, I value them at expected sell and calculate my profit with that number, if I buy on market I calculate my trade profit as the buy/sell discrepancy, and if I manufacture I do it expecting to turn a profit on manufacturing even if I buy everything at sell-order prices. If one step isn't worthwhile, I use the market to skip it - it's not worth trading for a hundred thousand total, say, so I buy from a sell and just manufacture straight, instead of trying to trade as well. Same with supplying components, or blueprints, or whatever. Figure out internal cost structures, at least in rough form, and plug them into your spreadsheet. ----- Bloodmoney Incorporated is recruiting! |
Sidrat Flush
Caldari Life is Experience
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Posted - 2009.03.31 11:32:00 -
[79]
I don't believe it's possible to change the logic of people who believe minerals they mine are free because of course it's true.
They haven't spent any isk on obtaining the minerals.
They don't earn any isk until they turn the minerals into something and sell it on the market.
Is a battle cruiser built in 0.0 worth less because of the availability of minerals than the same one built in empire anywhere, where you possibly had to purchase stocks of zydrine and or megacyte?
This is the important bit
The spreadsheet that I'm currently working on will demonstrate that the minerals mined have a value. The value will be dependant on the mineral price that you will have to enter in yourself. Just because you obtained them for free they can still be sold to someone else for an isk amount. If the isk amount for the minerals is higher than the price of the item you intend to build with the same amount of minerals then you only build that item out of a desire to please and because you enjoy the building mechanic.
You could sell the minerals to someone else and use the Isk gained from the sale to purchase the same module for less isk than it would have cost you in minerals to make it.
End of important bit, so just read it again until your head hurts or something.
On second thoughs please continue putting up under-priced modules so that the eagle eye traders can maintain a profit without ever undocking.
-------------------------- Life is about memories the more the better. Eve Online Batch Calculator |
Frosty Nuggetz
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Posted - 2009.03.31 11:44:00 -
[80]
I look for the highest combined price my "basket" of minerals will sell for and that's where I go -- which means, obviously, not always one of the major trade hubs.
Takes a bit more math to determine a sales point, but it works for me.
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Mortimer Duke
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Posted - 2009.03.31 13:16:00 -
[81]
Look Ma!
The accountants and the financial analysts are fighting each other again!
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Dzil
Caldari TankSox Industries
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Posted - 2009.03.31 15:08:00 -
[82]
I'd say base the value on the way you would plan to sell your manufactured product. If you have decent trade skills, and would set the product up as a sell order, then count your minerals the same way. If you need the instant turnaround to maintain your production line, count your minerals at highest buy. That way you aren't kidding yourself in your calculations for whether a particular manufacture job will be profitable.
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Sidrat Flush
Caldari Life is Experience
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Posted - 2009.04.01 01:16:00 -
[83]
Edited by: Sidrat Flush on 01/04/2009 01:16:31 See this excel sheet so it can be demonstrated that the ore you mine and then refine to turn into items DO have a value.
Just enter the mineral prices that you could sell the minerals for, then enter the number of units of Ore you have mined.
Based on perfect refining and zero tax waste you'll get a figure, it will also tell you how many units of minerals you'll get as well.
http://www.eveonline.com/ingameboard.asp?a=topic&threadID=1038755
-------------------------- Life is about memories the more the better. Eve Online Batch Calculator |
Sir Substance
Minmatar MagiTech Alliance Inc. MagiTech Corp
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Posted - 2009.04.01 04:25:00 -
[84]
when valuing minerals, i follow this guide:
trit: 2.3 pyerite: 3.2 mex: 23 isogen: 66 nox: 112 zydrine: 2400 mega: 4200
thats close enough for jazz, and i havent changed it much in two years.
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Jagga Spikes
Minmatar Sebiestor tribe
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Posted - 2009.04.01 11:02:00 -
[85]
trit at 2.3? you got some to sell? :)
on the other hand, minerals (and/or just about anything else) are worth whatever people are willing to pay for them. if selling low powers your motors, good for you. i'm certain it makes other people happy, too.
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Kryss Stevenson
Caldari GMS Corporation
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Posted - 2009.04.01 13:16:00 -
[86]
I think that it is hard to convince someone that the ore they mine is not free, just as it is hard to convince the person, which gets frustrated with that attitude, that this is just a game.
I can understand the mind set of the person who looks at the mined minerals as free. They are probably doing something else while mining their ores. Also you can look at it in this way; I donÆt have to pay for the minerals to build this since I mined for most of it. It makes a 100 mil isk battleship more affordable when you only have to pay for 15 mil worth of minerals to cover the ores you could not mine. That is an 85 mil isk ôsavingsö of sort.
I honestly would rather see people selling for below the mineral cost (if it makes them happy. It is how they want to play the game) then have them pump the prices up so high that most casual player canÆt afford them. Or they could decide that Tritanium is so valuable that they sell it for 20 isk per unit. No, I rather see them view it as ôfreeö then the other way. I have heard too many friends complain about other systems where certain ores are priced through the roof, not because they are ultra rare, but because the item that it is mainly used for everyone wants.
It is really no use complaining one way or the other, just find a different market for your items and donÆt sell in Jita. I manufacture items and make a good enough profit on them and that is using bought minerals to make them.
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Lord Fitz
Project Amargosa
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Posted - 2009.04.01 15:02:00 -
[87]
Originally by: Dreamwalker So question I have for Fitz or someone who makes large pieces that go into making something else.
How do you value the item when it takes weeks to make the parts?
Easy, same as with minerals, you value the minerals, you value the parts, you work out how much you are making building the parts. If this is negative, just buy the parts instead of minerals. If not, that's profit you made building parts. Then you value finished item, compare it to the value of the parts, if the parts sell for more than the finished item, sell the parts. If not, that's the profit to build the finished item.
For maximum profit you may just want to build the most profitable item per slot hour it takes to build. You also though have to take into account limited numbers of BPOs and the time taken to sell different items (sometimes intermediates are harder to sell, occasionally easier)
Quote: Do you value the parts?
Do you value the minerals in the parts and not the parts as a whole?
Do you value the finished product?
Value everything, then you know where you are adding value, and where you may be either reducing the value, or not adding enough for the process to be worth your time.
Quote: I currently have my way but my way has me sitting on inventory for some time as mineral prices adjust to where its profitable again. And no after a weeks time I'm not refining the parts down into minerals so I can sell the minerals.
Turnaround or patience is really the key, preferably turnaround, things like jump freighters I highly prefer the PE1 BPCs as you can go from buying the materials to selling the finished product in a reasonable amount of time, which means that you are unlikely to be selling at a loss, assuming prices were high enough to make the whole procedure worthwhile to begin with. Sometimes it is worth holding onto something if the cost to build it has risen since you built it, and that hasn't yet kicked through to the finished product.
Generally, if you're making an item that becomes worth less than you paid for the minerals, you're building the wrong thing, or should give up building in preference to trading the item instead.
Quote: Why don't you call up Wal-Mart's home office and tell them how much money they are loosing every day. Tell them that they should move their items to the local mom and pop store because they could sell it for a lot more there.
If they could, they would and should. In Eve you can. Bonus.
Quote: Profit = [Sell Price ] - [Cost of Materials] - [Production Fees] - [Taxes].
I don't care about what the minerals are valued at by someone else. I only care about what I spent to get them.
Right, Awesome.
You make a profit. Welcome to the basics. However if you could have made MORE profit, by doing less, have you not lost potential money by actually doing something?
It's like someone giving you a car. You could sell it for $20,000 but instead you take to it with a hammer and only get $5,000 for it. The car cost you nothing, therefor you deduce that you should hit every car with a hammer because it makes you $5,000 profit. And you get all that profit for just spending an afternoon causing reckless damage.
The brilliance of Eve is that someone can buy the car from you and with a click of a button, undo the damage and make back the $15,000 you just lost ;)
Quote: At the end of the day I'll be happy about making lots of profit and you'll be upset that someone has undercut you and you are now loosing isk.
Sounds like I win
It might sound like it to you, but they'll be buying your items, marking them up, and making the profit you missed out on, because your supply of the items is finite you can only make as many as you can mine minerals for. This works great for items that have poor demand and consequently no margins, but for larger in-demand items, others will be making many times what you make spending hours mining, with just a few clicks.
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Lord Fitz
Project Amargosa
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Posted - 2009.04.01 15:05:00 -
[88]
Edited by: Lord Fitz on 01/04/2009 15:05:51
Originally by: Sir Substance when valuing minerals, i follow this guide:
trit: 2.3 pyerite: 3.2 mex: 23 isogen: 66 nox: 112 zydrine: 2400 mega: 4200
thats close enough for jazz, and i havent changed it much in two years.
I will buy multiple billions of isk worth of trit/pyerite/mex at those prices if you have it. ;)
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Irish Blend
Caldari 10045th Logistics Battalion
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Posted - 2009.04.01 21:51:00 -
[89]
The minerals I refine are free - its the ore that costs me time and money. Err, except on things you don't have perfect refine on - then you should tip people but not to the point it eats into your net
If its a corp project, then thats community service and I just do it to get it done for the common good.
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TII Noob
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Posted - 2009.04.01 22:34:00 -
[90]
Originally by: Estel Arador Aren't the minerals you mine free?
Die in a fire :P
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