Beating the odds in hostile conditions

Highbank Resources has delivered its first commercial shipment of aggregates to Prince Rupert Port, British Columbia, Canada. To deliver the shipment, Highbank Director Jim Place accompanies the 100-ft. sea-going tug Sea Warrior for the journey along the Portland Canal. And the tug, in turn, guides a barge carrying about 4,000 tons of 1-in. crushed base material from Highbank’s new ocean-side Swamp Point North (SPN) Quarry.

Highbank acquired a 100 percent interest in Portland Canal Aggregates’ SPN operation on Portland Canal, south of Stewart in northwest British Columbia.

SPN lies on the east side of the Portland Canal and north of Donahue Creek. A medial glacial marine terrace, it comprises well-sorted gravel and sands. SPN will entail both an aggregates operation and a deep-water loadout terminal.

Highbank’s corporate objective, as might be expected, is to create a significant new construction aggregates company, with all major mining operations contracted out.

Greg Shafransky, Highbank’s investor-relations consultant and corporate shaman (there is a strong bond with local native group First Nations) looks back at the company’s recent progress. He says over the past two years, the company has:

• Received all necessary approvals.
• Raised funds to build the quarry.
• Purchased and transported to the site all heavy equipment for quarry operations, all of which came in by barge.
• Built the quarry in very inhospitable weather in a challenging and remote location.
• Constructed a marine barge-loading facility named Canada Strong.
• Built and maintained a year-round camp.
• Fully commissioned the quarry by delivering its first barge load to Prince Rupert.
• Raised an additional $900,000 in working capital.

“It is the dogged, diligent work of the board of directors and the company’s consultants that made the dream real,” Shafransky says.

Project financing will be spent on commissioning production equipment, further site and roadway upgrades, changes required to the aggregate wash plant in order to maximize output, and costs incurred in the preparation of the preliminary economic assessment.

In regards to gaining permit approval to operate at SPN, Shafransky says getting permission was “nothing short of a miracle.” Approvals were obtained from the British Columbia provincial government (Ministries of Mines and Forests), Coast Guard authorities (Canada and the U.S.), Canadian Fisheries and two First Nations communities.

“The work was hard, sure, but we got it done,” he says.

The extractive processes

Vic Bryant, Highbank president and CEO, summarized the process whereby extraction can begin at Swamp Point North.

“The site is cleared of trees and undergrowth, which is either sold or burned, followed by removal [overburden], which varies from 1 to 2 meters. The site stripping is well advanced, the camp fully equipped and winterized,” Bryant says.

The gravel is then dug by excavator and fed to the crushing plant where it is crushed, screened and then stockpiled for shipment. Alternatively, the crusher feed material can be crushed, washed and screened to produce concrete aggregate. Washing permits controlled removal of the fines and sand fractions to meet the end-user requirements for concrete. This is the highest-priced product to be produced at the operation, according to the company.

The various products are then stockpiled (for later shipping) or directly loaded to barges for shipment to the end user. The barge loadout facility was completed a year ago, and material is now being prepared for washing and screening once the production plant has completed its setup. It will then be ready for the initial shipment to Prince Rupert.

Transporting the aggregates

It is 72 miles by barge to the Port of Prince Rupert where at present more than $100 billion of construction is proposed, planned or underway by the port authorities. For Shafransky, an easy rule of thumb is that at least 10 percent of these build dollars will be oriented toward construction aggregates. For him, Highbank is the only port-to-port supplier for hundreds of miles around that can also barge to Prince Rupert for one-fifth of the cost of trucking per mile.

“The trip to Prince Rupert takes about 10 hours but is still a significantly cheaper mode of transportation than trucking per mile,” Bryant says. “Currently, we are not shipping offshore, although we can modify our loadout to accommodate offshore vessels.

“During the initial journey from Prince Rupert to Swamp Point North, the tug and barge load manifest comprised two 350 Komatsu excavators and spare parts, a fleeting barge loading system (winch and controls), diesel fuel, additional spare parts for other equipment and general camp supplies to operate the site over the next few months,” he adds.

Highbank has indicated that it will commence a work program focusing on further site development, as well as producing and stockpiling various sizes of construction aggregates in preparation for shipping.

An underdog’s success

The enthusiasm of Bryant and Shafransky, as well as CFO Gary Musil, is highly evident. Musil’s continued determination to arrange financing was highlighted by completing a $4 million convertible debenture in 2014 to fund all necessary equipment and build the barge-loading facility.

For Shafransky, SPN is the story of the underdog succeeding, the little guy winning against all odds. It is the story of a junior miner accomplishing the impossible.

“The odds of a junior miner finding a deposit that is economically viable are 500-to-1, meaning if you have 500 publicly traded junior mining companies, only one will achieve commercial production,” Shafransky says. “Further, for that junior miner to achieve production without joint venturing (selling off control to a much larger company) the odds are well over 1,000-to-1.

“It just does not happen,” he adds. “Highbank broke the bank by accomplishing this milestone.”

Shafransky even strikes a Canadian note about the project.

“Ten years. That’s how long it took us. We stayed the course, eyes always on the goal. Get ‘er done – it’s a Canuck thing.”

Take note

SPN will entail both an aggregates operation and a deep-water loadout terminal.

Michael Schwartz edited UK-based mining magazines before moving to Canada where he is working as a freelance journalist.