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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: DaveAu who wrote (66029)	6/16/2006 1:44:03 PM
From: - with a K	Respond to of 206321

BMD: I talked to BMD management this morning. On June 9 they hosted a tour of about 50 people, including many analysts. No PR was done because it wasn't material. They do these tours regularly but I was told this was by far the largest. Among other firms, Westwind was there (see Yahoo post below) I asked about their reaction to the TD report suggesting less demand for quicklime and got the standard "we don't comment on analyst reports" but later scoffed and the notion. Suncor has been using limestone in it's Flue Gas Desulphurization process to remove SO2. Syncrude is also going to use limestone in its desulphurization process. I'm betting that BMD will be the supplier. We talked about how things still need to be worked out (see recent odiferous problems at Syncrude) and how the technology and approach will evolve over the years. Regarding the Ft. McMurray mayor's comments I was told building out the infrastructure is of course needed and very good news for BMD. Highway 63 is being expanded and "they will need our products." A new valuation is coming out next week, I was told, along with other "good news." This sell-off has been painful but I remain optimistic. Last week I had a lengthly conversation with a private investor in Dallas who spent 3 days touring the area, including attending the annual meeting and a 10 hour day touring the facilities and quarry with quarry manager Peter Heidenreich. The things I heard were very encouraging, especially the new crusher noted below. - K Westwind CC..... by: tom_genna 06/16/06 12:07 pm Msg: 10717 of 10720 I listened in to the 10:15 AM (ET) Westwind CC and have read todays updated comments. The cal was conducted professionally. non-promotional and matter of fact. The figures that WW supports for their $11 price target were laid out in detail including the segmented costs of using railroad transportation as well as the pros and cons of why the undependable RR's are not being used today. They reiterated their rationale for their quicklime estimates citing Syncrude's 2020 needs alone being 100K tons/yr vs td's 25000 T/yr. Maybe td knows Syncrude's business better than Syncrude??? The aggregate crusher currently supplied by the contractor is inadquate. The crusher on order will be state of the art and 4X that size and will be installed over a 3 month period. Ten's of thousands of tons of aggregate is shipping and it is going at market price or slightly higher for the higher grade crush. Susan and Poplar Lake is now producing more sand than stone and is of such low quality as to be inadequate for quality concrete construction. This is well established for some time. It was not at all a hype session. There was serious discussion about the potential for new technology but the analyst (steve) felt that current lime based treatment was most robust dependable and efficient. The "official" COS statement about sulfur treatment was that lime based treatment best served their needs. We all know the trouble and huge costs Syncruded is gong thru now with ammonia. Also new technologies are likely to produce an "active" byproduct instead of inert gypsum. This has disposal cost ramifications and makes the cradle to grave supplu and burial of QL a very attractive treatment. Cement shortages and potential $$$ there was not played up in this discussion though the province experienced shortages affecting some construction projects last year. The move to burn cheaper and coke asphaltine etc instead of natual gas is still seen as an important driver for BMD QL as limitations on stack sulfur emissions will limit upgrading production. Therefore the value of a locally available product is huge. The shelf life of QL is about 3 days. Syncrude will warehouse about 3 days worth but must have reliable steady shipments in order to not lose production. This is an important consideration when choosing a vendor who is around the corner or someone 500 miles away in a Canadian winter. The construction business for aggregate is based on previous projects and is viewed as requiring MORE aggregate than estimates, not less. This is based on previous project numbers, not guesswork. Again the CC was professional and detailed. All questions were addressed. And before the analyst decides to change his previous opinion he intends to wait on the updated PF report........ *************************** Birch Mountain has an enviable position. Our Athabasca landholdings are in the midst of the booming oil sands industry that has created a robust demand for aggregate. The limestone on our property includes high-quality units, suitable for calcining into quicklime, of which oil sands operators will use an estimated 350,000 tonnes per year to treat air and water emissions. This gives us a strong position, as we own, through permits and leases, the rights to metallic and industrial minerals, of which the Quarry is a small part. Competitive sources of aggregate and quicklime are limited. Birch Mountain has the only high-quality limestone identified in the area, and controls virtually all surface-accessible limestone. Currently, quicklime is trucked from Southern Alberta, more than 800 kilometres (500 miles) away. Conversely, our plant will be minutes from many oil sands operations, reducing the cost to buyers and the environment, and increasing delivery reliability, an important factor as quicklime has a limited storage life. Birch Mountain has signed co-development agreements with all of the major oil sands mining companies in the area, including Syncrude, Suncor, Albian Sands and Canadian Natural Resources, and has strong ties to the local community. http://www.birchmountain.com/Hammerstone%20folder/Position/position.html ********************* Berry Morning Notes 6/12: Most important was the visit to Birch’s quarry. I first visited the “quarry” in March 2004. It was nothing more, at that time, than a goat path into the wilderness. However I did explore extensively and actually sat on one of the limestone outcrops, as if to convince myself that there was, indeed, limestone on the site. I include a picture of that outcrop as it looked two short years ago. This visit was my first since the quarry came into operation. You may recall that development of the quarry began in earnest in August of 2005. It was amazing to view the progress. The company is blasting and creating aggregate product. I stood on a mountain of over 1 million tonnes of unit 4 material and looked down on the work in the quarry. In the middle of the growing quarry was a pile of about 50,000 tonnes of beautiful, valuable finished aggregate. I learned later that a large customer had just purchased the entire inventory. This aggregate sells for a price between $7 and $10 per tonne. The stockpile had been created in about two weeks. The company is solidly on its way. It is clearly, in my mind, a legacy investment with significant upside over time. Land has been cleared for the calcining facility (necessary to make quicklime) and I believe demand will be strong for Birch products. There are four product waves that Birch will “catch” over the next few years. This is only the first inning of an extra inning game in the Athabasca oil sands for BMD. The Birch product quality is so good that companies transporting the material are using old tires on their trucks (tires cost $70,000 each and wear out quickly in the Athabasca.) Birch Mountain is now becoming a legacy investment. Expect a release with a new valuation soon.