Birch Mountain raising $32 million (August 19, 2005)

Vancouver – Industrial mineral developer Birch Mountain Resources (BMD-V) is going to the market to raise $32 million earmarked for advancement of its Muskeg Valley limestone quarry in northeastern Alberta.

With its preliminary prospectus filed, the company has engaged a syndicate of underwriters, led by RBC Capital Markets, for the public offering of 8 million shares at $4.00 apiece. The underwriters hold the right to purchase (a greenshoe option) an additional one million shares at the same price. The offering is expected to close by early-September.

Birch Mountain recently received all necessary approvals for construction and operations at the Muskeg Valley quarry. Surface preparation has commenced at the limestone deposit.

The company’s Muskeg Valley and Hammerstone projects are located in close proximity to the Athabasca oil sands, providing a large, local source of construction aggregate and quicklime for the booming development underway. Portions of the limestone deposits are of significant quality for calcining into quicklime, which is used by oil sands operators to treat air and water emissions.

A prefeasibility study conducted earlier this year, by engineering firm AMEC Americas, reviewed proven and probable limestone reserves of 1.2 billion tonnes on the company’s Hammerstone project. Initial capital costs of $130 million were estimated for development of the quarry and construction of an aggregate and quicklime plant. The study estimated a quarry life of up to 70 years and showed a combined pre-tax net present value of $698 million.


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