StockGuru Breaking News:

Infrastructure Materials Corp. Optimistic about Cement Market Conditions for Blue Nose Project

 

Today’s Release: 

Infrastructure Materials Corp. (TSXV: IFM) (OTCPINK: IFAM) (the “Company”) is optimistic about recent trends in the United States cement market that position the Company’s Blue Nose Project to become a significant supplier of cement grade limestone to the western United States. Since the 2008 subprime mortgage crisis, U.S. cement market metrics have been substantially depressed due in large part to diminished demand resulting from the fall in residential housing starts. With less than a month left until the New Year, 2014 is shaping up to be the second consecutive year that economic conditions should surpass 2008 levels. This has created renewed excitement and focus for the Company’s plans to commercialize its Blue Nose Project.

The Blue Nose Project, which includes 40 mineral claims covering approximately 826 acres, is located 90 miles (145 km) northeast of Las Vegas, Nevada and is situated 6-10 miles (9.6 – 16 km) from a Union Pacific rail line. To date, the Company has completed three phases of drilling totaling nearly 30,000 feet (9144 m), including grid drilling to provide the data to calculate a block resource. Initial resource estimates for the Blue Nose Project consist of 168,349,800 tonnes of indicated and 23,097,000 tonnes of inferred cement grade limestone (contains CaO). Reference is made to the table below for further details of the resource breakdown and to the Canadian National Instrument 43-101 report posted on SEDAR athttp://sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00032039.

In 2010, the Company commissioned an independent market study on the United States cement market (prepared by Railroad Industries Inc. of Reno, Nevada) which presented several encouraging forecasts for cement demand growth over the balance of the decade and for the market’s ability to absorb additional regional production. Below is a list of areas regional to the Blue Nose Project and their forecast cement demand growth by the year 2021:

Southern Utah along the I-15 corridor: expected cement demand growth of 80%. Inland Southern California: an average growth rate of 31%. Western Arizona: an average growth rate of 28%. Inland Northern California: an average growth rate of 28%. Northern Utah and Boise metro areas: an average growth rate of 24%. Southern Nevada: an average growth rate of 20%

This list illustrates that regional cement demand is forecast to trend up over the next several years. The Railroad Industries Inc. study identifies the opportunity that a developed Blue Nose Project would have in these market conditions:

“(Infrastructure Materials Corp.) has many opportunities to gain a portion of the growing market share due to reduced capacity from plant closures, environmental regulation effecting competitors’ costs, and a marketing strategy that attracts customers.”

We note that the City of Las Vegas has no local cement supply. In the event that the Blue Nose Project begins production, it would be the closest supply of cement to Las Vegas in addition to being the newest and, potentially, most environmentally-friendly producer.

U.S. Housing Starts Recovery

In 2013 positive market factors finally culminated in a return of healthy demand for cement at a national level after a slow growth trend since the 2008 recession. Perhaps the most resounding bellwether for this economic turnaround has been the recovery of the housing market, which has historically represented approximately 30% of the demand for cement in the U.S. A review of California’s housing starts offers a glimpse at the positive trend toward recovery since 2008. Referring to the table below, an important point to note is that housing starts in 2013 surpassed those of 2008.