Edmonton, Alberta, Canada-based Athabasca Minerals Inc. announced its financial results for the fourth quarter and 13 months ended Dec. 31, 2014. The company announced that revenue, net of royalties at its Susan Lake aggregates plant was $26.33 million for 2014 as compared to $25.36 million in 2013.
EBITDA for 2014 improved significantly as the year progressed due to improved sales volumes and improved production costs. Annual EBITDA of $3.5 million consisted of $5.1 million from June to December 2014 as compared to $1.6 million from December 2013 to May 2014.
The company also developed two new aggregate operations at the Cowper and KM248 pits through agreements with DeneCo Aggregates Ltd., a First Nations company. Management entered into a Joint Venture Agreement with Wood Buffalo Métis Corp. to explore, develop and produce aggregates for 10 years.
The corporation said it is well positioned from a resource and equipment base to increase production tonnage based on the successful award of contracts and overall demand in the target areas. Management said it continues to focus on further developing existing relationships with the major oil sands and SAGD operators, including continued analysis and exploration of new aggregate deposits.
Sales guidance for 2015 at its corporate operations is 500,000 tons. Management continues to strive for production optimization levels and tighter cost controls as it prepares for the heavy demand aggregate season. Strategic inventory was established in 2014 in core areas which will allow management to quickly react to any sudden demand changes as the economy changes.
With the uncertainty in the region due to the drop in oil prices, sales from Susan Lake in 2015 have been forecasted for 6.5 million tons. While recognizing that the potential impact of lower oil prices could be significant, management believes that this projected tonnage is still appropriate and conservative, as it would be comparable to the 2009 annual sales volume recorded at Susan Lake.
Capital spending in 2015 for existing gravel operations is anticipated to be lower than previous years as the existing infrastructure allows management to meet the forecasted product demands.
The company has secured contracts for approximately 50 percent of its production for 2015.