Rock Products

NOV 2014

Rock Products is the aggregates industry's leading source for market analysis and technology solutions, delivering critical content focusing on aggregates-processing equipment; operational efficiencies; management best practices; comprehensive market

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ROCK products • NOVEMBER 2014 9 ESRD to maximize resource recovery in the Susan Lake pit. Aggregate management fees from Susan Lake during Q3 2014 were $3,344,688, a decrease of 7.6 percent from Q3 2013 Susan Lake aggregate management fees of $3,620,506. Ag‐ gregate operating expenses during Q3 2014 were $4,905,626, an increase of 53.8 percent over Q3 2013 aggregate operating expenses of $3,190,078. Of the $1,715,548 increase in aggregate operating expenses over the compara‐ tive quarter, $876,349 of that amount is due specifically to increased hauling costs for the 175.8 percent greater ton‐ nage volume sold from corporate pits. The next largest expense increase re‐ sulted from higher cost of sales associ‐ ated with the higher volume of aggregates removed from inventory for sales made during Q3 2014. Third quarter 2014 was the strongest from a gross revenue perspective rela‐ tive to any other on record. This was a result of a large gravel sales order at the Kearl pit, which was completed during Q4 2014. In addition, the corporation opened the Km248 aggregate opera‐ tion, which produced at a record daily average rate with improved cost per ton compared to earlier production at corporate‐owned pits. Sales from the Km248 pit commenced in Q3 2014 and continue into Q4 2014. Beginning in Q2 2014 and continuing into the third quarter management un‐ dertook a review of operating parame‐ ters and operational performance which included benchmarking key per‐ formance indicators and implementing cost control measures. These initiatives have resulted in a reduction in input costs and a reduction in cost per ton for inventory being produced and subse‐ quently sold. Management is actively pursuing and bidding on gravel contracts that may commence during Q4 2014 and con‐ tinue into fiscal 2015. Contract fulfill‐ ment would come from both existing gravel inventories and from new inven‐ tory production. Currently processed and stockpiled inventory of 493,000 tons of gravel and 457,000 tons of sand is located across five corporate pits and stockpile sites. Management is focused on opportuni‐ ties to sell its existing aggregate in‐ ventory, and is actively negotiating with various customers who have ex‐ pressed interest for the purchase of aggregates from its corporate‐owned aggregate operations and stockpile sites. The corporation is well‐posi‐ tioned to supply regional customers through its current inventory mix at multiple locations. President and CEO Dom Kriangkum stated, "We are pleased to see the de‐ mand for aggregates in the Fort Mc‐ Murray region increase during Q3 2014, and anticipate continuing strength during Q4 2014, when de‐ mand for aggregates is traditionally highest during the second half of the year. We have realized some significant recent success from implementing a number of cost reduction opportunities in extraction and processing that we targeted in the first half of 2014." FAST FACT Corporate-owned aggregate operations generated a 206.1 percent increase over Q3 2013 revenue. The piling work for the load‐out con‐ veyor and mooring dolphins at High‐ bank Resources Ltd.'s new South Point North (SPN) aggregate operation in Vancouver, B.C., Canada, have been completed and the conveyor sections and receiving hopper are now in place, according to the company. Preparatory work for installation of the crushing, screening and washing equipment for treating an estimated 72 million tons of aggregate is progressing. The barge‐ loading facility is also expected to be fully operational soon. In the mine site area, stripping of the sand/silt layer immediately above the gravel deposit is continuing and crush‐ ing, washing and screening equipment is being prepared. The first barge to leave the new facility was loaded with 1‐in. crush destined for Prince Rupert, B.C., Canada. Highbank President and CEO Victor Bryant announced projected revenues of $27 million for fiscal 2015. First year pre‐tax profits are projected at $11 mil‐ lion. Those estimates are based on pending orders and quotes submitted over the past few months. "It is of some import to note that the SPN project's total CapEx is under $8 million to access a $2.4 billion (NI 43‐101 com‐ pliant) resource," stated Bryant. "Al‐ though first production is slated for the end of October, we can disclose that we have already quoted on delivery in excess of 2 million tons of material." To‐date the company has submitted quotes for 1 million tons of material re‐ lated to pipeline construction, 600,000 tons related to harbor expansion and 600,000 tons for first phase LNG infra‐ structure. With a scarcity of aggregate resources in Alberta, additional quotes have been submitted for rail shipments back to that province for infrastructure builds. Highbank Banks on New Canadian Aggregates Plant FAST FACT President and CEO Vic- tor Bryant announced projected revenues of $27 million for fiscal 2015.

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