Member Info for freshwest

If you read the company presentation from August is states:

100-ton bulk sample mined and submitted to potential customer (cement company).
? Bulk sample ground in production clinker mill, to produce a finished ground pozzolan product.
? Tested for compliance with ASTM C618.
? Scale up from lab results confirmed.
? Samples out for testwork at a number of additional cement and concrete companies.

So the samples are already with various cement and concrete companies. 28 days is the standard curing time, then followed by strength and other testing. We should have results of these by now.

What cement and concrete producers love above all else is raw material consistancy - having access to the same cement, aggregates, pozzolans because it makes production so much easier. When raw material sources have to change as they are with fly ash it's a absolute nightmare because mix designs have to change which can upset the specification of the final product. Concrete products have to satisfy very strict British/ European (EN) standards or American Society for Testing and Materials (ATSM) due to building regulations.

SRES are shooting at an open goal here. They have a 27 year life long mine. That's 27 years for the same raw material for companies to source from. It's not a difficult sell - just as easy as selling sand to the Arabs!!

https://www.kallanishenergy.com/2020/10/01/vistra-to-close-coal-fired-power-plants-in-illinois-ohio/

"Texas-based Vistra Corp. has announced plans to close six coal-fired power plants in the Midwest and to develop 1,000 megawatts of renewable energy and storage at a cost of $850 million, Kallanish Energy reports.

In a move designed to reduce its carbon footprint, the company is eliminating more than 6,211 megawatts of electricity from six coal-fired plants operated by subsidiaries in Illinois and Ohio.

It is shuttering its entire coal-fired fleets in the two states. It is one of the largest coal-plant closing announcements ever made. Two of the Illinois plants will close by the end of 2025 and two by 2027. The two Ohio plants will be retired by 2027.

The company said those closings may occur sooner, depending on company finances"

So more closures announced and note 'ONE OF THE LARGEST COAL PLANT CLOSURE ANNOUNCEMENTS EVER MADE'. This will have not been factored in by the likes of Boral and other cement/concrete producers who will undoubtely source fly ash from these coal power plants.

Just came off the phone to one of my customers in the UK. They are one of the largest concrete paving manufacturers in the UK. They use fly ash - around 30% in their product mix as a substitute to cement. Traditionally, they sourced their fly ash from power stations around the UK. However, these sources are hardly available now so they began sourcing from European sources a couple of years now.

However, coal power stations in the Europe are closing down in the same manner they are in the US, so their current source of fly ash will soon no longer be available. They are looking at an alternative source but admitted they may have to bite the bullet with cost and source GGBS instead (another pozzolan alternative to cement). It's more expensive than fly ash but cheaper than cement.

They are in the process of trial work with this new fly ash source. The issue with switching fly ash sources is the colour changes. Some are a very dark grey whilst some can be an off white. It depends how on the process used at the power station. With 30% used in a mix, it will affect the final colour of the product and as you will appreciate, colour specification is criticial. So alot of tinkering around with the mix design, which I'm helping with at the moment.

But as you can see the fly ash shortage is plaquing concrete producers across the globe. What all concrete product manufacturers are after is a sustainable reliable source of raw materials, cement, pozzolans, aggregates etc.

SRES are sat on a 14.5 million tonne natural pozz resource that all concrete producers in the US will want their hands on. There will be no shortage of takers and they can happily gain multi year contracts for the entire life of the mine. All depends on price per tonne they can achieve. Fly ash price increased 10% this year and therefore there will also be a corresponding increase for natural pozzolan.

All the permits have been approved, just awaiting results of samples sent to various cement/ concrete producers. If they go alone with production CAPEX for extraction will be low as it's only surface mining. But very likely someone like Boral, CRH or Lafarge Holcim will try and buy the mine outright.

If they can mine circa 500,000T per year as per presentation and gain a conservative $100 per tonne thats a comfortable $50 million turnover per year. And that's just the pozzolan project alone and not including perlite and other gold and silver projects.

Retail price maybe $400 but SRES will be selling in bulk direct to manufacturers not to retail market.

However, it certaintly will not be $5 profit. That was the figure touted if Boral came in and took over production. Profit will be significantly higher.

And bear in mind Fly ash prices have increased by 10% this year. If Boral want the mine and they do, they will have to pay a premium.

Who also have 6 gold and silver projects nearby in Nevada and looking for JV partner.

Sunrise should in talking to Great Western GWMO about these project. They are exploring gold and silver nearby in Nevada also. Their SP on a roll at the moment.

Standard curing time for concrete is 28 days. News will land after that window. Depends when prospective buyers recieved them.

No doubt Boral will be quickest to get the testing done here and acquire all rights before anyone else does.

Sorry meant 2020. Getting ahead of myself already....

Much better second half of the year. Mark my words. Builder merchants are crazy busy at the moment due to surge in demand from domestic/ homeowner market. Can't think of any building material manufacturers in the UK who are quiet.

Have a read through the latest FY Boral results published last month. As you can read Fly Ash is a hot topic and their strategy is to acquire new pozzolan sources to make up the shortfall in fly ash. One way or another Boral will be coming after Sunrise pozzolan mine.

https://www.boral.com/sites/corporate/files/media/field_document/Management%20Discussion%20%26%20Analysis.pdf

“Fly Ash revenue growth of 1% was underpinned by a 10% price gain, which strengthened in 2H. Fly ash volumes declined 100k tons or 2% to 6.8 million tons primarily due to lower available ash supply in 2H as power plants were impacted by COVID-related slowdowns and intermittent shuts. Lost volumes associated with the previously advised closure of the Navajo plant in Arizona were offset by volumes from new contracts and additional volumes associated with storage and logistics optimisation. Lower fly ash site services revenue reflects the completion of two major projects which contributed in FY19. Site services represented 17% of total fly ash revenue (compared to 22% in FY19 and 28% in FY18). Earnings were lower with EBITDA margins of ~19% compared to ~22% in FY19 primarily due to the completion of site services construction projects, site closures and higher costs.

In Fly Ash, the strategy to grow volumes is continuing. We are working to minimise volume loss through current channels, including via network optimisation; harvesting and import opportunities; and, the Kirkland natural pozzolan source, which is due to come on line in June 2021. New contracts secured in FY20 representing 1.3m tons per annum (tpa) will progressively deliver benefits from FY21.

This is partially offset by lower volumes associated with contracts lost in FY20 representing ~230k tpa. We continue to target new sources of fly ash to grow supply and offset expected utility closures over time and potential contract losses.”

A question to the long term share holders? Has Sunrise ever been involved in Lithium exploration?The reason I ask is Telsa have just signalled they are going into the lithium mining business in Nevada with a claim on a 10,000 acre deposit.

https://www.mining.com/tesla-bets-on-mining-business-with-lithium-claim/

"The company also said it is planning to build its own cathode factory in North America, and when Elon Musk announced the company’s claim on 10,000-acre lithium clay deposit in Nevada, it signaled that Tesla is officially getting into the mining business.

According to Tesla’s estimates, using its new extraction and processing technology, lithium in Nevada would be enough to support the electrification of the entire US vehicle fleet".

If Telsa are claiming Nevada has enough Lithium to support electric vehicle production for the whole US, given our strong presence in Nevada, shouldn't we be looking at this too?

I’ve been surprised by the drop but then I was sent these links following Telsa battery day, which claim Silicon will replace graphite in the anode cell in the long term. Thoughts on the below please?

“Goodbye graphite? https://www.mining.com/tesla-bets-on-mining-business-with-lithium-claim/

Graphite has been the go-to anode material since the commercialization of the lithium-ion cell in 1991. Since then, the industry has pushed for greater use of silicon in the anode to improve energy density and charging capabilities.
“Tesla’s announcement is more than twice the total global pipeline capacity”

Wood Mackenzie

Silicon can store nine times more lithium than graphite, and many companies have been developing innovative ways to increase the amount of silicon in the anode. While the share of silicon has increased over time, electrode cracking and degradation are still key barriers to producing a silicon-dominant anode.

“Tesla claims to have overcome this challenge by removing the graphite entirely and using an elastic, ion-conducting polymer coating as a stabiliser. Other methods have utilized complex and costly designs such as graphene and nanotubes, but Tesla’s method is apparently simpler, cheaper and would even provide a 20% boost in range,” Wood Mackenzie noted.
“It almost seems too good to be true. A transition to silicon-based anodes has always been a risk for graphite demand in the battery sector. Although the risk might seem slightly more tangible now, we still expect graphite-based anodes to dominate in the short to medium term.”

Hopefully you can read these links:

https://www.linkedin.com/posts/chris-martin-0493a617_milling-ponded-fly-ashbottom-ash-all-week-activity-6699036609133735936-5iDQ

https://www.linkedin.com/posts/intelligent-concrete_construction-engineering-concrete-activity-6713942459933589504-wCp7

https://www.linkedin.com/posts/whitney-belkowitz-920a00154_structuralengineering-constructionindustry-activity-6668838984300412929-V8NL

https://www.linkedin.com/posts/matt-harvell-95272315_concrete-paving-with-integral-curb-at-buford-activity-6676527259597320192-dWrX

https://www.linkedin.com/posts/hailey-goodale_concrete-cement-civilengineering-activity-6669004642053099520-hRI4

In Nevada where SRES pozzolan mine is located, the last coal fired plant in the State is due to start closure end of 2021. So where are Boral and other cement/ construction companies going to source their fly from then? Nevada is a key state in supplying fly ash and raw materials to California – it’s closer than Utah and Arizona. Anyone who works in the construction industry knows having local sources is key to keep costs down. You don’t source cement, sand, aggregates from the other end of the country – it’s too expensive and the Co2 footprint is massive.
https://www.powermag.com/nv-energy-accelerates-retirement-of-one-of-nevadas-last-coal-units/

And yesterday the worlds largest supplier of coal power plants and equipment announced they were to exit the market and focus on greener alternatives. https://www.bbc.com/news/business-54242055

So over the next year fly ash availablity is going to rapidly decline far greater than Boral or other cement companies will anticipate. With Fly Ash prices increasing (see latest Boral trascript) it will soon become a false economy.

As the Boral Group President and CFO said last month - 'Obviously, with COVID, there's just been significant reduction in energy requirements in North America, so -- plus a lot of the utilities, we had seen a SIGNIFICANT REDUCTION in FLY ASH being produced.'

Wakey wakey MM. You can't fool me. This is going way. BIG FAT RISE IN SP>>>>>>>>>>>>>>>>

Once you have an understanding of the supply chain of the cement/concrete and construction industry and link with energy industry it’s simple case of dot to dot. Sunrise will benefit from COVID-19 massively and accelerate the demand for natural pozzolans. I still maintain Boral Resources will be all over the pozzolan mine like a rash - make no mistake.

Coal power stations are expensive to run and maintain. Many are years old now. Demand for electricity has fallen, many utilities have cut back on coal first, because it is more expensive than gas, wind and solar. In the EU imports of coal for thermal power plants plunged by almost two-thirds in recent months to reach lows not seen in 30 years. A new report by the US Energy Information Administration projected the US would produce more electricity this year from renewables than from coal for the first time. Industry analysts predict coal’s share of US electricity generation could fall to just 10% in five years, down from 50% a decade ago.

https://www.bbc.com/news/science-environment-52968716
https://www.carbonbrief.org/iea-coronavirus-accelerating-closure-of-ageing-fossil-fuelled-power-plants
https://www.theguardian.com/environment/2020/may/17/coal-industry-will-never-recover-after-coronavirus-pandemic-say-experts
https://qz.com/1829534/coronavirus-is-accelerating-the-demise-of-coal-power-in-the-us/

California is reliant on energy from coal power stations from Utah and Arizona. There are no coal power stations in California, so construction companies must source Fly Ash elsewhere but ideally from neighbouring states of Nevada, Arizona and Utah. California, which has mostly quit coal to achieve its green energy targets and other states will follow.
Boral acquired a 4.5 million tonne natural pozzolan source in 2018 in central Utah. Why? Because of coal power station closures in 2018 (brought forward from 2020) and with the largest coal power station in Utah schuled to close 2025.

https://informedinfrastructure.com/41725/boral-resources-acquires-natural-pozzolan-source-for-fly-ash-blending/
https://kutv.com/news/local/utah39s-oldest-coal-fired-power-plant-shut-down
https://www.spglobal.com/marketintelligence/en/news-insights/trending/w2taftmxcpiudwnogpalyw2

Then last year the Navajo Power station in Arizona closed and later this year the Cholla Power station in Arizona will also close. So with fly ash sources dwindling there Boral went into partnership with Kirkland Mining to begin production at their natural pozzolan mine in Arizona.

https://eu.azcentral.com/story/money/business/energy/2019/11/18/navajo-generating-station-coal-plant-arizona-closes/2567154001/
https://eu.azcentral.com/story/money/business/energy/2020/01/07/pacificorp-close-generator-cholla-power-plant-northern-arizona/2829342001/
https://eu.azcentral.com/story/money/business/energy/2020/01/07/pacificorp-close-generator-cholla-power-plant-northern-arizona/2829342001/

Not looking good at the moment. Only hope if the new restrictions are lifted before Xmas.

This is heading sub 10p.

This is another big development announced today and another nail in the coffin for coal power plants and the availablity of fly ash. Another one on the chalk board for SRES and natural pozzolan. https://www.bbc.com/news/business-54242055

In a dramatic reversal, one of the world's biggest makers of coal-fired power plants is to exit the market and focus on greener alternatives.

US industrial giant General Electric said it would shut or sell sites as it prioritised its renewable energy and power generation businesses.

It comes ahead of a US Presidential election in which the candidates hold starkly different views on coal.

NGO the Natural Resources Defense Council said the move was "about time".

GE has said in the past it would focus less on fossil fuels, reflecting the growing acceptance of cleaner energy sources in US power grids.

But just five years ago, it struck its biggest ever deal - paying almost £10bn for a business that produced coal-fuelled turbines.
'Attractive economics'

In a statement, the firm suggested the decision had been motivated by economics.

Russell Stokes, GE's senior vice president, said: "With the continued transformation of GE, we are focused on power generation businesses that have attractive economics and a growth trajectory.

"As we pursue this exit from the new build coal power market, we will continue to support our customers, helping them to keep their existing plants running in a cost-effective and efficient way with best-in-class technology and service expertise."

US President Donald Trump has championed "beautiful, clean coal" at a time when other developed countries are turning away from polluting fossil fuels.

In a bid to revive the struggling US industry, Mr Trump has rolled back Obama-era standards on coal emissions. But it has not stopped the decline as cheaper alternatives such as natural gas, solar and wind gain market share.

GE said it would continue to service existing coal power plants, but warned jobs could be lost as a result of its decision.

The firm is already cutting up to 13,000 job cuts at GE Aviation, which makes jet engines, due to the pandemic.

In a tweet, the Natural Resources Defense Council said: "Communities and organizers have been calling on GE to get out of coal for years. This is an important and long overdue step in the right direction to protect communities' health and the environment."

Continued.....

Operator [70]
The next question comes from Kevin (sic) [Keith] Chau from MST Marquee.
Keith Chau, MST Marquee - Building Materials & Packaging Analyst [71]
A few questions from my end and given we are expecting the strategy there. What I might focus on is just your visibility out to the next quarter. Firstly, fly ash volumes, Zlatko or Ros, are down 10% in July. Wasn't quite clear to me at the release, whether that was a function of supply being constrained or demand falling off. I'm just wondering if you can provide some context there as far as your pipeline goes out over the next month -- I'm sorry, next quarter?
Rosaline Ng, Boral Limited - Group President Ventures & CFO
So for fly ash, in terms of volumes, I mean, we did see a decline in the second half and really was due to lower availability of fly ash. Obviously, with COVID, there's just been significant reduction in energy requirements in North America, so -- plus a lot of the utilities, we had seen a SIGNIFICANT REDUCTION in FLY ASH being produced. So it really relates to the availability of ash.
Keith Chau, MST Marquee - Building Materials & Packaging Analyst [73
Right. Okay. And then the go-forward position for the balance of the year, Ros, is the expectation for that to remain constrained for the rest of the year? Or out of your incremental supply sources, is there any way you can offset that in the near term
Rosaline Ng, Boral Limited - Group President Ventures & CFO [74]
Well, I think the fly ash management team definitely continue to pursue the -- all the supply initiatives that we've spoken about. We've got a slide in the pack that talks about the contracts that we've won and also the contracts that we've lost. So we're trying to keep a bit of a tally of the pluses and the minuses. Some of it will take a bit of time to flow through as we talk about Kirkland, in particular, the pozzolan ash. But we expect that depending on just -- like I said, it's very -- it's a lot of uncertainty around having the impact on the utilities, but we continue to at least progress initiatives that we've outlined on fly ash, on our supply.

Read this below. It confirms exactly what I've been posting. Boral are desperate for Fly Ash.
https://tinyurl.com/yybjfmy3

Why you think fly ash price growth has been so successful during COVID-19 and just in recent years?
--------------------------------------------------------------------------------
So clearly, you've got a dynamic there where fresh indigenous fly ash supply in the U.S. has been on decline, and that decline accelerated through COVID with less power demand. So -- and then you think about the specification of certain concretes, particularly transportation applications, where you need to have fly ash, that kind of gives you a sense of what the pricing support for fly ash price increases comes from. So it's really going to come back to that trade-off between indigenous fresh fly ash supply versus the ultimate demand, particularly going into infrastructure. But Ros, do you want to talk about that second half versus first half?

Rosaline Ng, Boral Limited - Group President Ventures & CFO [67]

Yes, we did see a little positive up in the second half. And as you know, fly ash, there is an opportunity the fly ash management team look at it at -- twice a year, we look at opportunities where we can get the pricing outcome be more strategic. So it's just the evolution of the reassessment of opportunities across the different regions, James. But it's still very pleasing, and we're still seeing that sort of strong pricing outcomes and particularly, in the second half, and into the first half.

James Brennan-Chong, UBS Investment Bank, Research Division - Associate Director and Mining Associate Analyst [68]

Got it. Okay. So if I can just summarize that. So I guess a curtailment of supply probably drove up an additional 200 basis points to the price in the half, but you probably don't think that 12% is going to be a sustainable run rate right now given probably volumes are normalizing. Is that a fair characterization?

Rosaline Ng, Boral Limited - Group President Ventures & CFO

Well, we haven't provided any sort of future guidance on pricing, but I think it's needed to say that pricing over the last few years in fly ash have been very -- has been achieved very well between sort of 8% to 10% INCREASES that we've had in the last couple of years. We don't see anything in the marketplace that remain that it will track from that sort of levels that we've been able to achieve, James.

COVID fears and impacts will play to Sunrise advantage. COVID is accerating the closure of coal power stations globally. According to the International Energy Agency (IEA), we have seen the largest worldwide decline in coal consumption since World War Two.

Coal power stations are expensive to run and maintain. Many are years old now. Demand for electricity has fallen, many utilities have cut back on coal first, because it is more expensive than gas, wind and solar. In the EU imports of coal for thermal power plants plunged by almost two-thirds in recent months to reach lows not seen in 30 years. A new report by the US Energy Information Administration projected the US would produce more electricity this year from renewables than from coal for the first time. Industry analysts predict coal’s share of US electricity generation could fall to just 10% in five years, down from 50% a decade ago.

https://www.bbc.com/news/science-environment-52968716
https://www.carbonbrief.org/iea-coronavirus-accelerating-closure-of-ageing-fossil-fuelled-power-plants
https://www.theguardian.com/environment/2020/may/17/coal-industry-will-never-recover-after-coronavirus-pandemic-say-experts
https://qz.com/1829534/coronavirus-is-accelerating-the-demise-of-coal-power-in-the-us/

With the rapid decline of coal consumption this year, fly ash availablity will be even harder to source. So construction companies like Boral will be panicking.

This is where natural pozzolan will come into it's own and become crucial over the coming months and years.