Hi Everyone,
Long time lurker and I thought I'd finally sign up and throw in my 2 cents of DD. Found this online today, though it looks a little old and probably irrelevent.
October 11, 2006
“Phoenix now has the opportunity to pursue a contract with the U.S. Core of Engineers to sell up to 3.5 million tons of overburden and has just received a proposal from a third party to remove 2.5 million tons of overburden. The overburden would be removed from a specified area where a new mine site is being developed and is not “strip mining.” It is estimated that the overburden could be sold for $3.00 per ton. The cost to excavate and load the trucks will approximate $2.45 per ton, thereby leaving a Gross Profit of $.55 per ton. Phoenix must then pay payroll, insurance, electricity and other miscellaneous costs, estimated to be $.30 per ton. This leaves a profit to Phoenix of $.25 per ton. Phoenix has authorized me to offer a payment of $.10 per ton to Mitchell.” Thomas E. Schafer III
The judge had earlier ruled that Phoenix is not required to pay royalties on the overburden per the terms of the original lease, but Phoenix has to have Mitchell’s approval on a contract to contract basis. Looks like Phoenix is trying to play nice by offering the royalty anyway. Sadly, Mitchell failed to respond in a timely manner and so the contract for the overburden was lost. Thankfully, the sell of overburden is really just “icing” on the pit business. It’s more of a nuisance to mining than a money maker and any time you can sell it it's a win-win.
Also, came across this on line as well as I remember a few months back when the board was arguing on the value of the 2.5 million contract for “material” with the Army COE.
“1.5 million cubic yards translates to 66,000 tandem dump truck loads of dirt. The calculation goes as follows: 1 cubic yard equals 2,200 pounds, so 1.5 million cubic yards equates to 3,300,000,000 pounds, or 1,650,000 tons. As one tandem truck holds approx. 25 tons, 1.5 million cubic yards equals 66,000 tandem truck loads.”
So then 2.5 million cubic yards, that would be 110,000 tandem dump truck loads. Any guess on what those loads would sell for on average considering they might include a combo of sand, gravel, overburden etc.?
Thankfully it would seem that the Gravel biz is much less of an importance these days than other parts of the business. Boy would I love an update on the Oil/Gas side of things, but PR's seem to always hurt the pps which right now seems to want to resist slipping back into the old low set in November of .006.
Also, NV real estate market is not that bad. In fact, like Florida, most of the indicators show a soft bottom and REAL investors are buying now. California is the only scary market still. If PBLS picks up some RE in NV it is a good play in my opinion as long as the holding costs don't overly effect monthly cash flows. I've always been of the opinion that cash is good for a buy-happy company.
My list to Santa...
PLEASE let us get back to at least bouncing off the 50dma weekly like we did before July! Is that too much for a humble PBLSer to ask?
Ren
IMO DYODD
"Experience: that most brutal of teachers. But you learn, my God do you learn." C.S. Lewis
www.younglife.org
