VANCOUVER, British Columbia, March 20, 2014 (GLOBE NEWSWIRE) -- 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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Highbank Resources Ltd. #600 - 625 Howe Street Vancouver, B.C. V6C 2T6 Phone: (604) 683-6648 Fax: (604) 683-1350 E-Mail:
