VANCOUVER, July 13, 2017 /CNW/ - Polaris Materials Corporation (TSX:PLS) (the "Company", "Polaris" or "we") today reported preliminary sales volumes for the quarter ended June 30, 2017, increased its full year sales expectations, and announced the addition of new quarry and logistics management personnel.
Q2 2017 SALES VOLUMES
Sales volumes in Q2 2017 were 650,000 tons, an increase of 16% over Q1 2017, and consistent with our expectations for the quarter. Year to date, sales volumes are 1.21 million tons, consistent with our expectations for the first half, compared to 1.46 million tons in the first half of 2016. That said, sales volumes grew by nearly 5% YTD (excluding the impact of the conclusion of the Hanson contract).
Construction activity continues to climb in California, as projects that were delayed due to the exceptional rainfall are now catching-up in the summer. While Q2 shipments were lower than last year's Q2, the strong construction demand has drawn down inventories, requiring additional shipments in the second half of the year.
Volumes in our Long Beach terminal were approximately 93,000 tons, up 51% from Q2 2016, albeit below our initial expectations for the quarter. Construction of the Silver Lake Water Treatment Facility commenced in late Q2 versus an original target of early Q1, however our customer is working on an accelerated schedule and we expect the majority of the work requiring Orca sand and gravel to be completed within the calendar year.
We are also pleased to confirm our first sale of Fine Sand in the quarter, with a shipment being delivered to Hawaii in May. In addition, our Richmond terminal has recently broken its previous one-day sales record, with a 6,226 ton day to supply a foundation pour for the Transbay Center, and our superb Orca quarry team recently passed 669 days (22 months) of operations without a lost time incident.
INCREASED FULL YEAR VOLUME EXPECTATIONS
We are pleased to announce that we now expect full year sales volumes to be 3.0 to 3.2 million tons, a 0-5% increase from 2016. The increase is primarily driven by improved market share in San Francisco, following the suspension of activities at a local aggregate production facility, as well as increased domestic barge sales at the quarry. Volumes are increasing in San Francisco as our largest Bay Area customer has recently won several significant new contracts. Improvements in San Francisco and BC are offset by the modest reduction to the original Long Beach Terminal sales expectation for 2017, due to the above-mentioned delay to the Silver Lake project. While our second half is usually stronger than our first half, this effect will be punctuated in 2017, with 13-14 ships committed for delivery in Q3 and a further 10-12 ships scheduled (pending commitment) for Q4.
Current sales expectations for Q3 2017 are in the range of 1.0 to 1.15 million tons, consistent with our increased full year expectations. We continue to focus on managing operating costs while positioning the business to meet significantly increased demand in the latter half of the year. Our quarry management team is finalizing plant improvements to significantly reduce scraper cycle time and help to improve equipment availability and further reduce mobile equipment costs.
NEW QUARRY AND LOGISTICS MANAGEMENT
We are pleased to announce that, effective July 1, 2017 Tyson Mackay has been promoted to the position of Mine Manager of the Orca Quarry. Brian Buckley, who has been the Interim Mine Manager, will continue to assist in a consultative capacity. Born and raised in the north Vancouver Island community, Tyson joined Orca in 2013 and has been a significant and invaluable contributor to the success of the operation from day one. He is also the leader of our superb Mine Rescue team, and recently led our team to a top 5 placing in the provincial competition against teams from significantly larger operations. As well, Tyson's leadership of the Orca safety culture led to the company's 5th Stewart/O'Brien Award in 10 years for zero lost time accidents.
We are also pleased to announce that we recently hired Keven Wasylyshyn to the newly created position of Director, Supply Chain. Keven joined Polaris on January 18, 2017 after having served as Director of Terminals and Logistics for Northern Transportation Company, Limited (NTCL), a First Nations owned tug and barge operator with one of the largest fleets in Canada. Keven will focus on continuing to improve the efficiency of our logistics and working with our customers on delivery schedules and inventory management practices, where has already provided a significant benefit.
Ken Palko, President and CEO, commented: "Q2 was a solid quarter operationally, and we are well positioned for a significantly increased pace of sales activity in the second half of the year. Our Long Beach terminal continues to perform well during its ramp-up and we expect very healthy volumes in the second-half as several projects that were delayed are working hard to make up time. We are proud of the safety milestone achieved at the quarry and the focus our operating teams have placed on safety, consistency and quality. I would also like to congratulate Tyson on his promotion to Mine Manager and to welcome Keven to the team at Polaris. Tyson is an instrumental part of our improved safety and operating performance, while Keven has already had a significant impact on further reducing our shipping and logistics costs. We look forward to many more years of their contributions to the success of our business."
About Polaris Materials Corporation:
Polaris Materials Corporation is engaged in the development and operation of construction aggregate quarries in Canada to supply distribution facilities in the United States through coastal shipping. The Company's active construction aggregate interests consist of its Orca Sand and Gravel Quarry in British Columbia and two associated receiving terminals in Richmond and Long Beach, California. The Company also owns the Black Bear Project located in close proximity to the Orca Quarry, and a controlling interest in the Eagle Rock Quarry Project, located on the south coast of Vancouver Island.
For further information, please contact:
Nicholas Van Dyk
Vice President, Investor Relations and Corporate Development
Polaris Materials Corporation
Tel: (604) 915-5000 Ext. 104
Cautionary Note Regarding Forward Looking Statements
This press release contains "forward-looking statements" and "forward-looking information" within the meaning of applicable securities laws. These statements and information appear in this document and include estimates, forecasts, information and statements as to management's expectations with respect to, among other things, the future financial or operating performance of the Company, including increases in gross margins, increases in sales volumes (including in the Long Beach market), shipments and selling prices, costs of production, capital and operating expenditures, requirements for additional capital, government regulation of quarrying operations, environmental risks, reclamation expenses, and title disputes, the Canadian dollar compared to the US dollar, increases in Californian construction activity and US infrastructure funding, statements regarding potential new customers and the development of Black Bear. Often, but not always, forward-looking statements and information can be identified by the use of words such as "may", "will", "should", "plans", "expects", "intends", "anticipates", "believes", "budget", and "scheduled" or the negative thereof or variations thereon or similar terminology. Forward-looking statements and information are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Readers are cautioned that any such forward-looking statements and information are not guarantees and there can be no assurance that such statements and information will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's continuous disclosure documents which are filed with Canadian regulators on SEDAR (www.sedar.com), including under the heading "Risks and Uncertainties" in the Company's Annual Report and under the heading "Risk Factors" in the Company's Annual Information Form. Such factors include, amongst others, the effects of general economic conditions, changing foreign exchange rates and actions by government authorities, uncertainties associated with legal proceedings and negotiations, industry supply levels, competitive pricing pressures, mineral resource and reserve estimates and the timing and development of the Black Bear project. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements and information whether as a result of new information, future events or otherwise, except as required by applicable law. All written and oral forward-looking statements and information attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements.
SOURCE Polaris Materials Corporation