Erdene is targeting 100 million tonnes of high quality construction aggregate
In February 2010, Aggregates USA Sparta LLC ("AUSA"), the lease holder for the Granite Hill property, advised Erdene that it is planning to make the Granite Hill Aggregate Project one of its top priority new developments. AUSA is designing a quarry and processing plant with an initial design capacity of three million tons per annum ("tpa") and projected production capacity in the first full year of operation of one million tpa for the Granite Hill quarry. The Granite Hill site preparation was recently expanded from an area of approximately 19 acres for the pit to approximately 43 acres, including the plant, compound, and rail access areas. Site development is underway and Erdene has been advised that projections are for mine development to begin by mid 2010 with production commencing late in 2011.
In addition, Erdene continues to evaluate several opportunities in the construction aggregate sector in eastern Canada and the southeastern U.S. Growth in this area recently has been flat due to the current economic slowdown, most severely impacting the U.S. housing industry. However, the long term growth projections are positive given the U.S. economic stimulus package that is anchored in "rock and steel". This has the potential to rapidly accelerate demand for crushed stone. As a result, Erdene continues to position itself with projects in the south-eastern U.S. and in Atlantic Canada where tidewater prospects continue to have competitive advantages particularly in light of the rapidly declining costs of seaborne freight.
Erdene owns the Granite Hill property in central Georgia, which is a former producing granite aggregate quarry. The 342-acre property hosts a resource in excess of 120 million-tons of in-situ granite and is situated on an existing rail line. Erdene leased the property to Aggregates USA Sparta LLC ("AUSA") and granted it an exclusive right to mine, process, and sell aggregate from the Granite Hill property. The sale of all aggregate from the property is subject to an industry-competitive royalty payable to the Company. The property is fully permitted. Based on current production projections, the Granite Hill quarry will have a lifespan well in excess of 30 years.
