The Prince Rupert area is targeted for multiple massive
construction projects including the $11 billion LNG facility at the
Port of Prince Rupert. Malaysian petroleum giant Petronas has also
declared a commitment to inject $36 billion into British Columbia
LNG. Overall, the "announced" construction and infrastructure
projects in the region add up to $60 billion.
On March 19, 2014, Highbank Resources (TSX-V:HBK) announced that
it received a Notice of Work Permit approval for the Swamp Point
North Aggregate Project 78 miles by sea north of Prince Rupert.
This milestone is the culmination of six years development and
collaboration with First Nations and government stakeholders, by
management.
Highbank has an at-surface NI 43-101 compliant aggregate
resource of 72 million tonnes, with initial off-take commitments.
Aggregate is an industrial crushed rock that is the primary
ingredient in concrete.
"This permit is a very big milestone for us," confirms Highbank
CEO Victor Bryant in an exclusive interview with Financial Press,
"we have been working on this, getting over the hurdles, for about
six years. There is now a very straightforward path to
production."
Aggregate mining generates dust and noise. Proposed projects
often meet opposition from local residents wishing to preserve
tranquility. The Swamp Point North project is in a completely
isolated area, accessible only by boat and helicopter.
"Our location is one of our key advantages," states Bryant, "We
are close to the epicenter of the Northern B.C. construction boom,
and we are on tidewater. The cost advantages are significant.
Aggregate is a bulk commodity. Transportation is a major cost
factor. Highbank can load directly onto barges and ships
whereas many of our competitors are forced to truck in the
product."
Unlike gold, silver, copper, iron ore, an aggregate mine
requires little in terms of preparation before market.
"Our product is very close to surface," states Bryant, "We only
have about half a metre of material to remove before we are into
the aggregate. The raw material will contain a few large
rocks. But it is basically what we call 'free digging'. The
large rocks will be put aside, and then it will be crushed and
sized. Construction companies order different blends depending
on what type of concrete they are making. Highbank aggregate
is suitable for high-rise construction, although most of our
end-use will be industrial."
The Highbank aggregate begins at the shoreline and flows back at
surface on relatively flat land. The product is so close to the
load-out facility that it can be delivered to the barges on a
conveyor belt system.
Highbank's initial targeted production rate is 235,000 tonnes a
year, but with the anticipated growth demand from the LNG terminals
in 2015, the company may apply for a permit to expand
production.
Unlike gold mines, which seem to start at about $100 million,
the Capex of the Highbank Aggregate Project is only about $4
million because of the minimal amount of processing. The $4.0
million will be raised either through debt financing or a
combination of debt and equity.
"We're looking at starting production in the summer of 2014,"
confirms Bryant, "The timing of our work permits is excellent,
because the first phase of LNG construction is relatively small but
it will ramp up dramatically in 2015. And we will be ready to
deliver aggregate to Northern B.C. construction projects at very
competitive prices. Being on tidal water that is open year round,
gives us a huge competitive advantage."
Aggregate is the world's most mined material next to
oil. 2013 global sales revenues are around $100
billion. Annual Canadian consumption of aggregate is 10 to 15
tons per person. Highbank's First Sales Contract has been
signed with West Fraser Concrete for 100,000 tonnes.
"My guess is that about 80% of Highbank aggregate will be used
in concrete," states Bryant, "but in the BC North there is a lot of
clay, which is not stable to build on. So a lot of times the
construction company will excavate the clay and use aggregate to
back-fill, thereby creating a stable foundation for the
construction and provide good drainage."
On November 2, 2012, Highbank announced the signing of a
Cooperation Agreement with the Metlakatla First Nation with the
stated objective of giving the Metlakatla the opportunity to
participate in the economic benefits of an aggregate project on
their traditional lands. Discussions with the other First Nation in
the area, the Nisga'a have taken place and Highbank will also offer
job training to suitably qualified candidates.
This Cooperation Agreement has been a key to Highbank's
successful permitting process. The Metlakatla have been
supportive of Highbank's application, and Highbank has pledged to
provide Metlakatla the first opportunity to fill jobs and to
securing contracts for goods and services.
"Highbank respects the Metlakatla and Nisga'a traditions and
their longstanding commitment to preserve their way of life in
their traditional territory," stated Bryant.
The Swamp Point Project represents an opportunity to invest in
sustainable, innovative and broadly based renewed economic
development activity for Northwest BC.
Highbank is currently trading at $0.15 with a market cap of $12
million.
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CONTACT: Highbank Resources Ltd.
#600 - 625 Howe Street
Vancouver, B.C. V6C 2T6
Phone: (604) 683-6648
Fax: (604) 683-1350
E-Mail: highbank@telus.net
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