What changed in this filing

/stocks — the workspaceLOADING

Item 2. Properties

2022-10-13 compared with 2021-10-13 · 50 added, 7 removed, 90 unchanged (39% of the section changed)

ITEM 2 – PROPERTIES

Real Property Holdings and Mineral Reserves

Claims Total Estimated

Reserves Estimated

Reserves Total

CLAY RESOURCES AND RESERVES

In 2018, the SEC adopted new rules updating the disclosure requirements for companies with mining operations.

The new mining disclosure rules rescind Industry Guide 7 and codify the SEC’s mining property disclosure requirements in new subpart 1300 of Regulation S-K.

These rules became applicable to our disclosures on August 1, 2021.

Regulation S-K 1300 requires the disclosure of mineral resources for the first time.

However, we have no mineral resource estimates as all mineral accumulations of economic interest and with reasonable prospects for eventual economic extraction are either currently on production or subject to an economically viable future development plan and are classified as mineral reserves.

As used in this Form 10-K, the terms “mineral resource,” “mineral reserve,” “proven mineral reserve” and “probable mineral reserve” are defined and used in accordance with subpart 1300 of Regulation S-K.

Under subpart 1300 of Regulation S-K, mineral resources may not be classified as “mineral reserves” unless the determination has been made by a qualified person (as defined under subpart 1300 of Regulation S-K) that the mineral resources can be the basis of an economically viable project.

The following provides an overview of our mining properties, operations, and reserves.

Our real property holdings and tons produced for each of the three fiscal years ended July 31, are as follows:

Real Property Holdings

Tons Produced

Claims Total 2022 2021 2020

(acres) (thousands of tons)

7 unchanged sentences

8,023 3,432 1,030 12,485 832 781 756

With the exception of our research and development center in Illinois, all properties contain clay reserves or are used in the processing of our clay.

With the exception of our research and development center in Illinois, all properties contain clay mineral reserves or are used in the processing of our clay.

We mine sorbent minerals primarily consisting of calcium bentonite, attapulgite and diatomaceous shale which we refer to in the aggregate as “clay,” “minerals,” or “Fuller’s Earth.” We use certified professional geologists and mineral specialists who prepared the estimated reserves of these minerals in the table above.

See also Item 1 “Business” above for further information about our reserves.

Apart from certain mines in Georgia, all of the properties in Mississippi, Georgia, California and Illinois are currently in active production and collectively produced approximately 781,000 tons of finished product in fiscal year 2021 and 756,000 in fiscal year 2020.

Apart from certain mines in Georgia and Illinois, all mines in Mississippi, Georgia, California and Illinois are currently in active production and collectively produced approximately 832,000 and 781,000 tons of finished product in fiscal years 2022, and 2021, respectively.

Certain of our mines in Georgia are currently in development.

20 unchanged sentences

See Item 1A “Risk Factors” above for a discussion of other risks to our business related to our mining properties.

We operate a number of mines concentrated near our production facilities in California, Georgia, Illinois and Mississippi, although we have proven reserves in other states.

Based upon the quantitative and qualitative factors applicable, we do not consider any of our mines to be individually material to our business or financial condition.

As a result, we are only required to disclose summary information related to our mineral reserves.

Our mineral reserves as of July 31, 2022, have been prepared and certified by Jason Giddens, Corporate Geologist, our Qualified Person (QP) who is employed by us and who is a certified professional geologist.

Our summary of proven and probable reserves as of July 31, 2022 is as follows:

Mineral Reserves

Reserves Estimated

Reserves Total

(thousands of tons)

California 3,458 11,226 14,684

Georgia 33,065 22,675 55,740

Illinois 2,384 1,596 3,980

Mississippi 36,170 134,854 171,024

Nevada 23,316 2,976 26,292

Oregon — 25 25

Tennessee 3,000 3,000 6,000

101,393 176,352 277,745

We estimate that our proven mineral reserves as of July 31, 2022 were approximately 101,393,000 tons in aggregate and our probable reserves were approximately 176,352,000 tons in aggregate, for a total of 277,745,000 tons of mineral reserves.

Based on our rate of consumption during fiscal year 2022, and without regard to any of our reserves in Nevada, Oregon and Tennessee, we consider our proven and probable reserves adequate to supply our needs for over 40 years.

Although we consider these reserves to be extremely valuable to our business, only a small portion of the reserves, those which were acquired in acquisitions, are reflected at cost on our balance sheet.

It is our policy to attempt to maintain a minimum of forty years of proven and probable reserves of each type of clay at each location.

We have an ongoing program of exploration for additional reserves but we cannot assure that additional reserves will continue to become available.

Our use of these reserves, and our ability to explore for additional reserves, are subject to compliance with existing and future federal and state statutes and regulations regarding mining and environmental compliance.

During fiscal year 2022, we utilized these reserves to produce substantially all of the sorbent products that we sold.

Proven reserves means the economically mineable part of a measured resource and can only result from conversion of a measured mineral resource.

Further, proven reserves are those reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes;

grade and/or quality are computed from results of detailed sampling, and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well established.

Probable reserves are computed from information similar to that used for proven reserves, but the sites for inspection, sampling and measurement are farther apart or are otherwise less adequately spaced.

The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation.

We use certified professional geologists and mineral specialists who estimate and evaluate existing and potential reserves in terms of quality, quantity and availability.

We have internal controls for reviewing and documenting the information supporting the mineral reserve estimates and ensuring the validity of the estimates.

Information that is utilized to compile mineral reserves is prepared and certified by our QP and is subject to internal review.

Refer to Item 1A.

“Risk Factors” for discussion of risks associated with our estimates of mineral reserves.

M INING AND M ANUFACTURING M ETHODS

27 unchanged sentences

Once the clay has been dried to the desired level it will be sized and packaged.

Our products have various package sizes and types ranging from bags, boxes and jugs of cat litter to railcars of agricultural products.

Our products have various package sizes and types ranging from bags, boxes, pails, and jugs of cat litter to railcars of agricultural products.

We also package some of our products into bulk (approximately one ton) bags or into bulk trucks.

26 unchanged sentences

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