Note: The following is not a verbatim transcript of the Zoning Hearing Board meeting; it is simply one person’s summary of the major points made by those involved in the hearing process.  For that reason, quotation marks are not used unless a direct quote was recorded.  For information about obtaining an official ZHB transcript, contact the New Hanover Township office.

The meeting began with township attorney Julie Von Spreckelsen presenting her witness Dr. David Gold, Economic Geologist. 

Dr. Gold is a retired Penn State professor who is now self-employed as a consultant on geologic and quarry issues. He is presently doing work for the US Geologic Survey. 

Ms. Von Spreckelsen questioned Dr. Gold about Penndot’s regulations on the standards for coarse aggregate stone.  Gold said they did have standards, but that GRI did not do the necessary testing to assure them that the stone met the standards.  He then went through each type of rock that would (in all likelihood) be found and told something about their makeup.

Gold next talked about the size, area, and position of proposed quarry pits and their relation to the existing HI (heavy industrial) and LI (Light industrial) zones.

Note:  In the following summary (it appears) that Dr. Gold is showing that an economically successful quarry could be operated in the existing area that the township has set aside as HI, with some use of the LI zone for non-mining uses (i.e. the Earthen berms surrounding the pits).  If you remember, it is GRI’s contention that without exceptions from the township, they can’t make money on a quarry in the land currently identified as HI. 

Gold explained that the way he conducted his economic evaluation was to use spreadsheets where he modified:

·         The rate of production

·         The price of the rock

·         Upfront and capital costs

He said he used the same information that GRI’s economic geologist (see his testimony from 10/2/02 through March 2003.  For example, Gold started with 500,000 tons per year as a figure to indicate the amount of rock GRI planned to extract per year.  But, he also plugged in 600,000, 700,000, and 750,000 tons per year to see if those numbers changed how successful the quarry might be. 

Gold said he looked at the rate of return of the start-up and property costs as well as equipment costs.  He explained how these costs could be calculated as up-front costs or as costs that were spread across the years.

Gold said he also looked at the stone crusher machine.  The particular machine that was proposed by GRI was rated at 500 tons/hour.  He wondered why GRI would only say that they would extract 500,000 tons/year if the crusher they were buying was rated (conservatively) at being about to crush 750,000 tons/year.  So, Gold used a different crusher in his calculation to meet the 500,000 tons/year that GRI said they would extract. Stagg’s jaw crusher (which could crush 1,500,000 tons/year) was priced at $5,680,000.  Gold used a more advanced impact crusher that could crush 500,000 tons per year, which was approximately $3,000,000.

Gold then explained how he estimated price of stone.  He used data provided by four local quarries (Highway Materials, Valley Quarry, Rush Quarry, and M&M Stone).  Their stone costs ranged from $7.85/ton to $8.45/ton.

Next Gold discussed how by changing the berms to the LI zone opened more HI area to quarry.  This in effect increased the amount of stone that could be extracted.  It projected that by doing this 9M tons of additional stone could be extracted.

Gold then explained how he used these different numbers in his spreadsheet and how it affected the rate of return.  For example, a production rate of 700,000 tons/year at a sale price of $7.00/ton for good rock and $2.00/ton for waste rock, projects a 5.8% rate of return on investment.  Gold said that Stagg said a 5.5% ROR was acceptable.  

NOTE:  It should be noted that Stagg’s testimony of December 12, 2002 said that if the quarry is allowed to operate in the area presently designated by the New Hanover Township as High Industrial (HI) that the GRI would NOT be able to turn a profit. But, that if the Zoning Hearing Board allows their exception (allowing them to mine the Low Industrial (LI) area as well) that they would be able to turn a very reasonable profit.  

Gold explained (in detail) that he used Stagg’s data for most of the calculations except, property values, reserve and inventory, capital expenses and cost of the crusher.

When asked if GRI might have a successful quarry on the land marked HI, Gold said that if you increased the size of the ore body from 6,000,000 tons/year to 14,000,000 tons/year that it was economically feasible to quarry existing HI land.  He went on to present scenarios that actually showed a rate of return of between 8.5% and 10.5%---well over the 5.5% that Stagg said was necessary to be economic.

The next GR1 is January 6, 2005.

See Also:
Summary of the previous meeting (November 11, 2004)