Accumulated Net Cash Flow Expected to be $283 Million over a 12-Year Period with Company's Percentage Being 41%
DALLAS, Dec. 9 /PRNewswire-FirstCall/ -- Arabian American Development Co. (Nasdaq: ARSD) today announced an update on the calculation of ore reserves for the Company's Al Masane Al Kobra (AMAK) mine joint venture in Saudi Arabia. Accumulated net cash flow is expected to be $282.9 million over a 12 year period, from 2010 - 2022, with the Company's percentage being 41% of this amount.
Nick Carter, President and Chief Executive Officer, commented, "We are pleased with the results of the analysis and are confident that the mine will deliver the quantities of ore that will make this a long and productive mining operation and start to reflect the significant long term value of the project. We look forward to conducting ore processing test runs soon after the first of the year and to seeing the efforts of our joint venture's hard work and to begin delivering tangible results to our shareholders."
This net cash flow estimate includes the expected total of $166 million required for the mine to become productive. The Company anticipates that AMAK will begin test runs on the ore processing mill in the first quarter of 2010 and will be fully operational by the third quarter of 2010. The Company also expects bank debt, which will be acquired by AMAK, to fund ongoing development. The Saudi Industrial Development Fund is predicted to approve the remaining financing in the first quarter of 2010. Under an agreement reached in August with its Saudi partners, ARSD was released from any future financial obligation and has no further liability to AMAK or the mine property. Further information may be found in the Company's report on Form 8-K filed on August 25, 2009, with the Securities and Exchange Commission which can be reviewed at www.sec.gov.
The updated cash flow analysis incorporates a full review and update of present-day costs and drilling techniques based on modern geological estimation methods that were not available in 1996 when the feasibility study was originally done. The new feasibility study was conducted by Watts, Griffis & McOuat (WGM), Toronto, geological and mining consultants, who have been providing best-of-class professional services to the global mineral resource industry since 1962.
To view the updated cash flow model, please visit ARSD's website at http://arabianamericandev.com/index.php/investors.
About Arabian American Development Company (ARSD)
ARSD owns and operates a petrochemical facility located in southeast Texas just north of Beaumont which specializes in high purity petrochemical solvents and other solvent type manufacturing. The Company is also the original developer and an equity investor in a Saudi Arabian joint stock company involving a mining project in the Al-Masane area of Saudi Arabia which is currently under construction. The mine is scheduled to be in production in late 2010 and will produce economic quantities of zinc, copper, gold, and silver.
Safe Harbor
Statements in this release that are not historical facts are forward looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward looking statements are based upon management's belief as well as assumptions made by and information currently available to management. Because such statements are based upon expectations as to future economic performance and are not statements of fact, actual results may differ from those projected. These risks, as well as others, are discussed in greater detail in Arabian American's filings with the Securities and Exchange Commission, including Arabian American's Annual Report on Form 10-K for the year ended December 31, 2008 and the Company's subsequent Quarterly Reports on Form 10-Q.
Company Contact: Nick Carter, President and Chief Executive Officer
(409) 385-8300
ncarter@southhamptonr.com
Investor Contact: Cameron Donahue
Hayden IR
(651) 653-1854
Cameron@haydenir.com
SOURCE Arabian American Development Co.