I am sending this note to you so that you might have more of a background our latest investment opportunity. Doug Bychyk and I have been looking for a gravel deal for over 5 years. We have put offers on 3 pits. We lost one due to a right of first refusal and the other was taken off of the market.
The pit that we are dealing with in Cochrane was on the market two years ago. I made a full price offer through a Red Deer agent and sent a deposit cheque. If memory serves me the offer was accepted over the phone.
While my cheque was in the mail I was told by the agent for the seller, Jim Bates, that the Alberta Government had trumped my bid and the land had been tied up. Just two months ago I was reviewing my notes and looked at this deal again. I phoned Jim for an update and he told me that the Government had come on the land and drilled the full 320 acres. Fortunately for Doug, me and our investor group, the Government was in a budget deficit and they could not go through with the purchase.
We made a full price offer which was accepted. I have presented the deal to Lisa Ball at JLG gravel and we are in very serious negotiations to lease the land and gravel to them. We also presented to Kiewit Construction. Kiewit passed on the deal for their use on the Stoney Trail as they have gravel capacity for that job. They have advised us that they have been awarded Contracts for Co Gen plants and could use the gravel for that.
John Gazankas has recently retired from Kiewit and presented the deal to Burnco and perhaps Lefarge. Burnco liked the gravel. They thought it was too far from their plant at this time particularly for the price that we were asking. We have not heard from Lefarge.JLG Gravel is of the view that the government does not often purchase gravel from a private land holder. Their thinking is that the gravel would be used for the widening of the Cowboy Trail to Sundre or Olds.
As we discussed on the phone we are relying on our experts to guide us through this process. We are in the process of determining interest in the deal and to date interest is high. We see the deal as being cash flow positive almost immediately.
We will have no debt and anticipate a very good return based on Dr. Morton’s report and the deal that we strike with JLG Gravel. The old growth forest and the land that is left for our golf course and sub division only add to the return.
Trusting the above gives the information you require to determine your interest. I can be reached on my at 780 445 8893.
Standing Stone Developments