What changed in this filing

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Item 2. Properties

2022-02-28 compared with 2021-03-30 · 118 added, 30 removed, 16 unchanged (90% of the section changed)

Quarry Properties

As of December 31, 2020, we had 45 active and 14 inactive permitted quarry properties available for the extraction of sand and gravel and hard rock, all of which are located in the western United States.

All of our quarries are open-pit and are primarily accessible by road.

We process aggregates into construction materials for internal use and for sale to third parties.

Our plant equipment is powered mostly by electricity provided by local utility companies.

In October 2018, the Securities and Exchange Commission (“SEC”) adopted amendments to modernize the property disclosure requirements for mining registrants.

We are subject to the new rules beginning with our year ended December 31, 2021.

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.

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 - $15 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, 2021, we had open pit quarry properties available for the extraction of sand, gravel and hard rock.

Both of our reportable segments use these quarry properties to extract and process sand, gravel and hard rock into construction material for internal use and for sale to third parties.

As of December 31, 2021, we had all the permits necessary to mine and process sand, gravel and hard rock at our active quarry properties.

As of December 31, 2021, no individual mining operation was considered material to our business or financial condition. Aggregate annual production for all mining properties was 16 million tons, 14.3 million tons, and 12.5 million tons during the years ended December 31, 2021, 2020 and 2019, respectively.

The following map shows the approximate locations of our permitted quarry properties as of December 31, 2021:

As of December 31, 2020, we estimated our permitted proven (1)  and probable (2) aggregate reserves to be approximately 786.1 million tons with an average permitted life of approximately 57.5 years at present operating levels.

Present operating levels are determined based on a three-year annual average aggregate production rate of 13.7 million tons. Reserve estimates were made by our geologists and engineers based primarily on drilling studies.

Reserve estimates are based on various assumptions, and any material inaccuracies in these assumptions could have a material impact on the accuracy of our reserve estimates.

These properties are used by all of our segments.

(1) Proven reserves are determined through the testing of samples obtained from closely spaced subsurface drilling and/or exposed pit faces.

Proven reserves 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.

Actual required spacing is based on geologic judgment about the predictability and continuity of each deposit.

(2) Probable 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 following tables present information about our quarry properties as of December 31, 2020 (tons in millions):

Quarry Properties

Sand & Gravel

Permitted Aggregate Reserves (tons)

Three-Year Annual Average Production Rate (tons)

Average Reserve Life

Owned quarry properties

Leased quarry properties (1)

(1) Our leases have terms which range from month-to-month to 45 years with most including an option to renew and includes royalty related agreements.

Permitted Reserves for Each Product Type (tons)

Percentage of Permitted Reserves Owned and Leased

California is the only state that comprises more than 10% of our total mining operations.

The following tables present information about our quarry properties as of December 31, 2021, separated between California and non-California properties (tons in millions):

Resources and Reserves for Each Product Type (tons)

Percentage of Resources and Reserves Owned and Leased

Number of Properties

1 unchanged sentence

Non-California

(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 42 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, 2021 for all mining properties:

Non-California

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.

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, 2021, our qualified persons estimated our measured, indicated and inferred resources to be approximately 230.7 million tons with an average permitted life of approximately 16 years at present operating levels.

As of December 31, 2021, California was the only individual state 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 resources for hard rock. The following table presents information about our mineral resources at December 31, 2021 (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:

The Wine Group

Sand and Gravel

Aerojet North White Rock

Sand and Gravel

All other California

Sand and Gravel

Total California

Non-California

Sand and Gravel

All other California

Total California

Non-California

(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.

Modifying factors are the factors that a qualified person must apply to indicated and measured mineral resources and then evaluate in order to establish the economic viability of mineral reserves.

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, 2021 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, 2021, our qualified persons estimated our proven and probable reserves to be approximately 765.1 million tons with an average permitted life of approximately 19 years at present operating levels.

Waste factors for proven and probable reserves range up to 45% depending on the deposit type, market characteristics and extraction feasibility.

As of December 31, 2021, California was the only individual state 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 reserves for hard rock. The following table presents information about mineral reserves at December 31, 2021 (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:

Sand and Gravel

All other California

Sand and Gravel

Total California

Non-California

Sand and Gravel

Handley Quarry

All other California

Total California

Non-California

(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;

review of disclosures to ensure compliance with requirements.

Plant Properties

1 unchanged sentence

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:

The following table presents the number of plants we owned as of the respective dates for continuing operations:

Aggregate crushing plants

3 unchanged sentences

Lime slurry plants

Pipe liner product factories

These plants are used by all of our segments.

These plants are used by both of our reportable segments.

Other Properties

The following table provides our estimate of certain information about other properties as of December 31, 2020:

The following table provides our estimate of certain information about other properties for continuing operations as of December 31, 2021:

Land Area (acres)

Building Square Feet

Buildings (square feet)

Office and shop space (owned and leased)

The office and shop space is used by all of our segments.

The office and shop space is used by both of our reportable segments.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 2. Properties