Item 2. Properties
Item 2. PROPERTIES
Quarry Properties
We own or lease quarry properties that contain mineral resources that we extract and process into construction materials.
As defined by the SEC, mineral resources are a concentration or occurrence of material of economic interest in or on the earth’s crust in such form, grade or quality and quantity that there are reasonable prospects for economic extraction. A mineral resource is a reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining dimensions, location or continuity, that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable.
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As defined by the SEC, mineral reserves are an estimate of tonnage and grade or quality of indicated and measured mineral resources that, in the opinion of a qualified person, as defined by the SEC, can be the basis of an economically viable project. More specifically, it is the economically mineable part of a measured or indicated mineral resource, which includes diluting materials and allowances for losses that may occur when the material is mined or extracted.
Our mineral resources and reserves are based on estimates made by qualified persons who are employees of the Company and are based primarily on geological evidence, sampling and testing and appropriate modifying factors. Amounts presented in the tables below are based on various assumptions to determine estimated economically mineable tons including site specific prices for sand and gravel and hard rock between $5 - $40 per ton. The price per ton estimates use a saleable product (i.e., materials that are ready for sale) as a point of reference and are escalated over time by the Producer’s Price Index for Construction Sand, Gravel and Crushed Stone (product 1321). Pricing for aggregates tend to remain similar for long periods of time; therefore, we use current pricing to estimate prices and we reassess at least annually to verify there have not been material changes. Changes to the estimates and assumptions from those currently anticipated could have a material impact on the mineral resource and mineral reserve estimates.
As of December 31, 2023, we had open pit quarry properties available for the extraction of sand, gravel and hard rock. Our Materials segment uses these quarry properties to extract and process sand, gravel and hard rock into construction material for internal use in our construction projects and for sale to third parties. As of December 31, 2023, we had all the permits necessary to mine and process sand, gravel and hard rock at our active quarry properties. As of December 31, 2023, no individual mining operation was considered material to our business or financial condition. Annual production of aggregates for all mining properties was 17.5 million tons, 16.3 million tons, and 16.0 million tons during the years ended December 31, 2023, 2022 and 2021, respectively. The following map shows the approximate locations of our permitted quarry properties as of December 31, 2023:
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California and Utah are the only states/provinces that individually comprise more than 10% of our total mining operations. The following tables present information about our quarry properties as of December 31, 2023 (tons in millions):
Resources and Reserves for Each Product Type (tons) Percentage of Resources and Reserves Owned and Leased
State/Province Number of Properties Sand & Gravel Hard Rock Owned (1) Leased (2) Acreage
California 31 475.3 285.0 58 % 42 % 10,498
Utah 10 117.3 37.4 64 % 36 % 1,497
All other states/provinces 57 187.4 187.3 53 % 47 % 14,712
Total 98 780.0 509.7 61 % 39 % 26,707
(1) Owned properties are properties we own or in which we have, or it is probable that we will have, a direct or indirect economic interest.
(2) Leases are defined as properties where we operate, or it is probable we will operate, under a lease or other legal agreement that grants us ownership or similar rights that authorize us, as principal, to sell or otherwise dispose of the mineral and includes properties that we sublease and from which we receive royalties, which are both considered immaterial. Our leases have terms which range from month-to-month to 50 years with most including an option to renew.
The life cycle of mining sand, gravel and hard rock begins with exploration and continues through development and production. After a sand, gravel and hard rock deposit has been identified through exploration, the mine is developed before production begins. The following table presents the number of properties in each respective stage as of December 31, 2023 for all mining properties:
State/Province Exploration Development Production
California 8 3 20
Utah 1 2 7
All other states/provinces 11 7 39
Total 20 12 66
Mineral Resources
The table below presents information on measured, indicated and inferred mineral resources. Estimates of measured mineral resources are based on conclusive geological evidence, sampling and testing and may be converted to a proven mineral reserve or to a probable mineral reserve. Estimates of indicated mineral resources are based on adequate geological evidence, sampling and testing and may only be converted to a probable mineral reserve when sufficient evidence is identified including consideration of modifying factors such as mining, processing, economic and environmental factors. Modifying factors are the factors that a qualified person must apply to indicated and measured mineral resources and then evaluate to establish the economic viability of mineral reserves. Estimates of inferred mineral resources have significant geological uncertainty based on limited geological evidence, sampling and testing and therefore may not be converted to a mineral reserve.
As of December 31, 2023, our qualified persons estimated our measured, indicated and inferred resources to be approximately 277.0 million tons. As of December 31, 2023, California and Utah were the only individual states/provinces that comprised more than 10% of our total mining operations. The Wine Group and Aerojet North White Rock were the only mines that comprised 10% or more of our combined measured and indicated mineral resources for sand and gravel and the Euer Ranch was the only mine that comprised 10% or more of our combined measured and indicated mineral
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resources for hard rock. The following table presents information about our mineral resources at December 31, 2023 (tons in millions):
Measured Mineral Resources Indicated Mineral Resources Measured + Indicated Mineral Resources Inferred Mineral Resources
Amount (tons) Grades / qualities (1) Amount (tons) Grades / qualities (1) Amount (tons) Grades / qualities (1) Amount (tons) Grades / qualities (1)
Sand and Gravel:
California
The Wine Group — — 51.4 Sand and Gravel 51.4 Sand and Gravel — —
Aerojet North White Rock 32.0 Sand and Gravel — — 32.0 Sand and Gravel — —
All other California 15.4 Sand and Gravel 19.5 Sand and Gravel 34.9 Sand and Gravel — —
Total California 47.4 — 70.9 — 118.3 — — —
Utah 3.9 Sand and Gravel — — 3.9 Sand and Gravel — —
All other states/provinces 9.0 Sand and Gravel 3.0 Sand and Gravel 12.0 Sand and Gravel 8.4 Sand and Gravel
Total 60.3 — 73.9 — 134.2 — 8.4 —
Hard Rock:
California
Euer Ranch 71.7 Hard Rock — — 71.7 Hard Rock — —
All other California 9.9 Hard Rock — — 9.9 Hard Rock — —
Total California 81.6 — — — 81.6 — — —
Utah 9.6 Hard Rock — — 9.6 Hard Rock — —
All other states/provinces 10.2 Hard Rock — — 10.2 Hard Rock 33.0 Hard Rock
Total 101.4 — — — 101.4 — 33.0 —
Grand Total 161.7 — 73.9 — 235.6 — 41.4 —
(1) The grade of product produced is contingent on market needs. Sites typically sell base products that range from low to high grades including fill materials, base aggregates, hot mix aggregates and concrete aggregates.
Mineral Reserves
Mineral reserves are divided into proven and probable mineral reserves. Proven mineral reserves are the economically mineable part of a measured mineral resource and can only result from the conversion of a measured mineral resource. Proven mineral resources are determined by a qualified person through the testing of samples obtained from closely spaced subsurface drilling and/or exposed pit faces, and are sufficiently understood so that quantity, quality and engineering conditions are known with sufficient accuracy to be mined without the need for any further subsurface work. Probable mineral reserves are the economically mineable part of an indicated, and in some cases, a measured mineral resource. Probable mineral reserves are determined through the testing of samples obtained from subsurface drilling, but the sample points are too widely spaced to allow detailed prediction of quantity, quality and engineering conditions. Additional subsurface work may be needed prior to mining the reserve.
The modifying factors applied in the conversion of measured and indicated mineral resources to proven and probable mineral reserves during the year ended December 31, 2023 included various relevant technical and economic factors, including site infrastructure, mine design and planning, processing plant and environmental compliance and permitting. The basis of determining the modifying factors was a combination of historical experience mining aggregates and observation.
As of December 31, 2023, our qualified persons estimated our proven and probable reserves to be approximately 1.0 billion tons. Waste factors for proven and probable reserves range up to 44% depending on the deposit type, market characteristics and extraction feasibility. As of December 31, 2023, California and Utah were the only individual states/provinces that comprised more than 10% of our total mining operations, Coalinga was the only mine that comprised 10% or more of our mineral reserves for sand and gravel and Handley Quarry was the only mine that comprised 10% or more of our mineral
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reserves for hard rock. The following table presents information about mineral reserves at December 31, 2023 (tons in millions):
Proven Mineral Reserves Probable Mineral Reserves Total Mineral Reserves
Amount (tons) Grades / qualities (1) Amount (tons) Grades / qualities (1) Amount (tons) Grades / qualities (1)
Sand and Gravel:
California
Coalinga 116.8 Sand and Gravel — — 116.8 Sand and Gravel
All other California 232.6 Sand and Gravel 7.6 Sand and Gravel 240.2 Sand and Gravel
Total California 349.4 — 7.6 — 357.0 —
Utah 113.3 Sand and Gravel 0.1 Sand and Gravel 113.4 Sand and Gravel
All other states/provinces 151.8 Sand and Gravel 15.2 Sand and Gravel 167.0 Sand and Gravel
Total 614.5 — 22.9 — 637.4 —
Hard Rock:
California
Handley Quarry 144.3 Hard Rock — — 144.3 Hard Rock
All other California 59.1 Hard Rock — — 59.1 Hard Rock
Total California 203.4 — — — 203.4 —
Utah 27.8 Hard Rock — — 27.8 Hard Rock
All other states/provinces 78.5 Hard Rock 65.6 Hard Rock 144.1 Hard Rock
Total 309.7 — 65.6 — 375.3 —
Grand Total 924.2 — 88.5 — 1,012.7 —
(1) The grade of product produced is contingent on market needs. Sites typically sell base products that range from low to high grades including fill materials, base aggregates, hot mix aggregates and concrete aggregates.
Internal controls
Mining operations include risk in estimation of mineral reserves and mineral resources that could be impacted by unforeseen geologic circumstances, changes in regulation or changes in sales and customers. The risk that these estimates would be unreasonable based on the known information is mitigated by the following internal controls that we use in our exploration and mineral resource and mineral reserve estimation efforts:
• quality control and quality assurance programs including management identifying the qualified person(s) with the appropriate background and qualifications to prepare the information used for disclosure purposes;
• verification of analytical procedures including management reviewing the mineral resource and reserve report information for completeness, accuracy and appropriateness, such as categorization, inclusion of technical, economic and operational factors, discounted cash flow analysis inputs, assumptions and calculations, and mining, metallurgical, legal, environmental, social and governmental modifying factors as well as comparison of estimates to historic production and prior period estimates; and
• review of disclosures to ensure compliance with requirements.
Plant Properties
We operate plants at our quarry sites to process aggregates into construction materials. Some of our sites may have more than one crushing, concrete or asphalt processing plant. The following table presents the number of plants we owned as of the respective dates:
December 31, 2023 2022
Aggregate crushing plants 35 28
Asphalt concrete plants 59 48
Cement concrete batch plants 6 5
Asphalt rubber plants 4 5
Lime slurry plants 6 6
These plants are used by both of our reportable segments.
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Other Properties
The following table provides our estimate of certain information about other properties as of December 31, 2023:
Land Area (acres) Buildings (square feet)
Office and shop space (owned and leased) 1,217 1,617,556
The office and shop space is used by both of our reportable segments.