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Presented by: Richard Edmunds, ARA, AAC 82 nd Annual Meeting of ASFMRA Phoenix, Arizona 1.

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Presentation on theme: "Presented by: Richard Edmunds, ARA, AAC 82 nd Annual Meeting of ASFMRA Phoenix, Arizona 1."— Presentation transcript:

1 Presented by: Richard Edmunds, ARA, AAC 82 nd Annual Meeting of ASFMRA Phoenix, Arizona 1

2 This presentation is designed to acquaint the valuation professional with the quarry industry. The quarries discussed will include gravel, limestone, bluestone and slate as found in the northeastern portion of the US. 2 Overview of Quarries and their Evaluation

3 A review of quarry characteristics, deposit types, processing and marketing will be covered. The discussion of those items of information needed for the valuation process will be included along with a review of the application of the Sales Comparison Approach and Income Approach (DCF). 3 Overview of Quarries and their Evaluation

4 Gravel – is composed of unconsolidated rock fragments that have a general particle size range and include size classes from granule to boulder sized fragments. One cubic yard of gravel typically weighs about 3000 pounds. 4 Types of Deposits

5 5

6 6

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8 Gravel Limestone – is a sedimentary rock composed primarily of calcium carbonate in the form of mineral calcite. Some varieties of limestone perform well in construction use because they are strong dense rock with few pore spaces. These properties stand up well to abrasion and freeze/thaw. One cubic yard = 4,000+ lbs. 8 Types of Deposits

9 Limestone 9

10 10 Limestone

11 11

12 Gravel Limestone Bluestone – Pennsylvania Bluestone is unique sand stone found only in Northeastern Pa. It derives its name from its typically blue color. It is marketed in two types: Dimensional which is used for stair steps, window and door fixtures, countertops and Flagstone, which is used for walkways and patios. 12 Types of Deposits

13 Bluestone 13

14 Bluestone 14

15 Bluestone 15

16 Bluestone 16

17 Bluestone 17

18 Bluestone 18

19 Bluestone 19

20 Gravel Limestone Bluestone Slate – is a fine grained, foliated, homogenous metamorphic rock derived from an original shale-type sedimentary rock composed of clay and volcanic ash through low grade regional metamorphism. The result is a foliated rock in which the foliation may not correspond to the original sedimentary layering. When expertly cut by striking with a specialized tool in the quarry, many slates will form smooth flat sheets of stone which have long been used for roofing and floor tiles. 20 Types of Deposits

21 Slate 21

22 Slate

23 23

24 24 Slate

25 25 Slate

26 26

27 Slate 27

28 28 Slate

29 29 Slate

30 30 Slate

31 Open Quarries Overburden….. Permitted by State DEC, DEP, Etc. Subject to Safety Regulations 31 Common Characteristics

32 Deposit Characteristic Potential Uses Quality of Deposits Yield and/or production factors 32 Quarry Considerations

33 Conversion Factors Tons vs. Yards Life of Quarry Factors Processing and Marketing Issues 33 Quarry Considerations Continued

34 Engineers Reports Deposit Quantity and Quality Local, State and Federal Environmental Issues Reclamation requirements Cash Flow Statements Marketing Issues Interviews Other 34 Items of information to begin the valuation process

35 Sales Comparison Approach Usually limited number of sales Sales may include multiple types of assets Income Approach Discounted Cash Flow 35 Valuation Process

36 Breakdown of Income Deposit Quantity Categories of Expenses Increase or Decrease of Income and Expenses by % or $ Number of Years for DCF Reversion Considerations Discount Rate Excess Deposits, 36 DCF Considerations

37 Gravel Limestone Bluestone Slate – is a fine grained, foliated, homogenous metamorphic rock derived from an original shale-type sedimentary rock composed of clay and volcanic ash through low grade regional metamorphism. The result is a foliated rock in which the foliation may not correspond to the original sedimentary layering. When expertly cut by striking with a specialized tool in the quarry, many slates will form smooth flat sheets of stone which have long been used for roofing and floor tiles. 37 Types of Deposits

38 Thats all Folks! 38


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