Last checked at 27 Sep 2012 07:01
Astar Minerals plc
("Astar" or the "Company")
Operating Agreement with Aggregates West, Inc
Astar Minerals plc ("Astar" or the "Group") (AIM: ASTA), an operator of quarries in British Columbia announces that it has signed heads of terms with Aggregates West, Inc. and Valley View Sand and Gravels, Inc, (collectively "Aggregates West"), to operate a number of quarries based in an area between the US/Canadian border and Seattle.
Aggregates West has a number of sites with high quality reserves of sand and gravel and either owns or has access to over 10 million tons of materials. For the year to 31 December 2011, Aggregates West had turnover of over C$9 million.
Under the agreement, Astar intends to take over the management of the operations of Aggregates West which currently comprises a number of operating sites with substantial reserves in the attractive and fast growing area of the US between Seattle and the Canadian/US border. As part of the agreement, Astar will pay royalties to Aggregates West based on sales volumes. The agreement will run for an initial period of three years with Astar having the option to renew the agreement for a further three years.
Aggregates West's operations are geographically complimentary to Astar's current operations. Astar's existing business and operations will benefit from access to a significantly larger sales operation and the ability to sell a wider range of products to its existing client base. In particular, the enlarged group will be well placed to develop business with the producers of ready mixed concrete and other high margin products. David Grainger, one of the owners of Aggregates West, will be joining the Astar management team bringing his considerable knowledge of the aggregates and construction industries.
As part of the agreement, Astar will purchase additional equipment and inventory, build up working capital and invest in developing further some of Aggregates West's existing sites. The Company has already raised C$350,000 of the required funding through debt finance locally in Canada.
It is expected that the management agreements with Aggregates West, Inc. will be signed shortly.
Further announcements will be made in due course.
Lynda Chase-Gardener, Chairman said:
"The agreement with Aggregates West represents a quantum leap in both the scale of operations, revenues and access to reserves for Astar. The existing Aggregates West business also offers a number of exciting opportunities for growth in the Vancouver and Lower Mainland area of British Columbia and North West Washington State. Furthermore, there are a number of areas of synergy between the businesses which make the combination financially attractive."
For further information please visit the Company's website (www.AstarMinerals.com) or contact:
Astar Minerals plc | |
Lynda Chase-Gardener, Executive Chairman | Tel: +44 (0) 1206 230770 |
Euan McAlpine, Executive Director | Tel: +44 (0) 182 925 0576 |
Zeus Capital Limited (Nomad and Joint Broker) | |
Ross Andrews | Tel: +44 (0) 161 831 1512 |
John Goold | Tel: +44 (0) 207 016 8925 |
Alexander David Securities Limited (Joint Broker) | |
David Scott / Bill Sharp | Tel: +44 (0) 207 448 9800 |
Peterhouse Corporate Finance (Joint Broker) | |
Jon Levinson / Lucy Williams | Tel: +44 (0) 207 562 3357 |
Walbrook PR (Investor Relations) | |
Paul Cornelius / Lianne Cawthorne | Tel: +44 (0) 207 933 8780 |
Notes to Editor:
Astar Minerals opened Quadling Quarry in the spring of 2010. The Quarry is located adjacent to Highway 1, close to the cities of Abbotsford and Chilliwack, in the Fraser Valley Regional District of British Columbia, Canada.
The Quarry produces a wide range of quality crushed rock meeting MMCD specifications. It supplies crushed aggregate materials to local contractors, developers, the agricultural industry and private home owners throughout the Lower Mainland and Greater Vancouver Area.