Athabasca Minerals Inc. (AMI) announced its financial results for the first quarter ended March 31. Aggregate sales revenue totaled $489,000.
Robert Beekhuizen, chief executive officer, stated, “In 2020, we continue to advance our corporate strategies with steady progress in transforming, diversifying, and creating value across the corporation’s businesses. Our base division, AMI Aggregates, has been strengthened with the Coffey Lake Pit opening ahead of schedule and from early revenue generation in the first quarter of 2020. It has also expanded geographically with its 50% joint-venture interest in the Buckhorn Quarry Project located 90 minutes from the Greater Toronto Area, where regulatory and permitting processes are underway. AMI RockChain continues to experience ongoing and growing demand based on a large number of project bids in the first quarter of 2020 where the RockChain platform and associated algorithm are being used extensively to optimize supply and delivery of aggregates. We also continue to make good progress with AMI Silica’s Duvernay Silica Sand Project. We continue to collaborate with our pending partner to update front-end engineering and development (FEED) in relation to project requirements, synergies and joint interest.
“In the midst of the COVID-19 pandemic and resulting economic downturn, AMI has responded with ‘safety-first’ mindset and protocols,” he continued. “We have also proactively adapted to and adjusted for fluctuations in business rhythm in the construction and energy markets with a series of measures proactively taken to reduce and optimize payroll by approximately 30% at all levels of the company, including the board of directors. We are focused on preserving our cash position throughout 2020 to sustain progress in advancing our strategic initiatives and corporate objectives.”
In the first quarter:
- The corporation was awarded a 15-year contract with a 10-year renewal option to operate and manage the Coffey Lake Public Pit located approximately 90 km north of Fort McMurray. Effective Jan. 13, the Province of Alberta issued the corporation a disposition for the Coffey Lake Pit and a Surface Mineral Lease that allows for the extraction of sand and gravel. This authorization enabled the corporation, as the pit management contractor on behalf of the Province of Alberta, to commence activities to commence aggregate operations at Coffey Lake to the public.
- On Jan. 28, the corporation entered into a loan arrangement with Canadian Western Bank (CWB) whereby $1.5 million was advanced to the corporation by CWB for the development of the Coffey Lake Pit.
- On March 18, Alberta Environment & Parks granted the corporation a disposition for a commercial lease for stockpiling and crushing aggregates on 74 acres (30 hectares) of land strategically located 7 km from the Coffey Lake Public Pit in the vicinity of oilsands operations. The True North Staging Hub adds further value with supplementary services for aggregate crushing, processing and inventory management.
- On March 21, the Coffey Lake Pit began generating sales and revenue for the base division (AMI Aggregates) ahead of schedule. In the first three weeks of operations, loading activity at Coffey Lake was robust with its first order being executed for approximately $560,000. This order had been committed to prior to the onset of COVID-19.
- On Feb. 3, AMI Silica Inc and Shell Canada ratified a Master Purchase Contract to purchase Premium Domestic sandfrom AMI’s Duvernay Basin Silica Project effective July 1, 2021. Under terms of the contract, there is a minimum sales volume at predetermined prices, with an optional maximum annual volume that books a significant portion of the Duvernay Project production capacity. The contract has a five-year term from the effective delivery date, and gives Shell the right to extend for an additional two 12-month terms thereafter, with the option to procure sand from AMI’s future Montney In-Basin Silica Project as well.
- A strategic joint-venture (JV) was established with MGT Management Inc. to develop the Buckhorn limestone quarry on 300 acres (121 hectares) of land in Ontario, approximately 90 minutes from the Greater Toronto Area. The JV expands the corporation’s business interests to access one of the largest aggregate consumption markets in the country.
- The corporation’s subsidiary Aggregates Marketing Inc. rebranded to AMI RockChain Inc. in February 2020. This rebranding included a new website with improved functionality: www.amirockchain.com.
- AMI RockChain surpassed a $1 million order-size milestone on a rail transload project for a large industrial customer with operations in central Alberta. The project was executed over five months and was completed in March. Over 15,000 tonnes of specialized rail ballast product were delivered with AMI’s participating network of suppliers, and transportation companies who were integral to the optimized RockChain solution.
- AMI Silica forwent exercising the buy-out options at pre-determined valuations of $8 million each for the remaining 50.8% and 50.4% of the Montney and the Duvernay premium domestic in-basin sand projects, respectively, due to market conditions and competitive pricing considerations.
- In spite of COVID-19, AMI RockChain is engaged in a large number of bids, which are regularly tracked and accumulated on www.amirockchain.com. In the first quarter of 2020, the subsidiary surpassed 100 bids representing a combined potential supply of up to 1.1 million tonnes serving 50 companies. The RockChain digital platform with its Operational Excellence program, its ‘Asset-Lite’ business model, and Health & Safety protocols have proven uniquely well-suited for today’s business environment. Customer orders for aggregates are easily placed remotely for jobs across Western Canada and executed with quality assurance while minimizing Health & Safety risk exposure.
- The corporation implemented new health and safety policies and protocols in response to the COVID-19 pandemic. The corporation’s business continuity plan incorporates government recommended practices with consideration of the health and safety of its employees, field operations, and customers. The corporation and its subsidiaries have been able to safely continue operations.