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Penrice says that demand for its quarry aggregates has softened further than expected.
Penrice says that demand for its quarry aggregates has softened further than expected.

Penrice may sell Angaston, quarry business down

Adelaide’s Penrice Soda Holdings has secured another $4 million from its bankers and is confident an increase in the construction aggregates resource at its marble and limestone mine at Angaston could make the mine more saleable and so reduce its debts.
As part of a strategic review, the company has flagged the sale of its Angaston mine and is working on a resources plan to provide greater long-term certainty on the size and quality of the limestone resource and its asset value.

Penrice has revealed a construction aggregates resource in excess of previous estimates, making it a substantial and well-located resource for metropolitan Adelaide.

However, the company has made it clear that no final decision has been made to sell the asset and stressed it would only be done if a long-term limestone supply agreement could be agreed with the buyer.

In a recent statement, Penrice said that demand for its quarry aggregates has softened further than expected, though it is benefiting from its supply position to the Urban Superway JV. Sales of quarry aggregates under this major road project are expected to continue until project completion in December 2013.

Elsewhere in Penrice’s quarry business, the South Australian construction sector has continued to decline. Demand for construction materials are around 30 per cent below last year, reflecting the national construction sector downturn, but Penrice’s like-for-like sales are around 10 per cent behind last year, reflecting a higher success rate in tenders.

The company is actively pursuing a new round of cost saving initiatives to offset the short-term loss of sales revenue from construction activities.

“The board recognises the importance of the strategic review and in particular the possible sale of its quarry and mineral business and will seek the best outcome to deliver value for shareholders,” said Penrice chairman David Trebeck. “It is anticipated that an announcement regarding a Resources and Reserves statement for the Angaston mine will be made around the end of May 2012.”

Source: The Australian, Penrice Soda Holdings

CDE Global

Tuesday, 20 August, 2019 3:27pm
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