Comparing PLS v HBKAt some level they are and look similar - similar product line (aggregate) and delivery (marine) and both resources are on BC coast, and on Aboriginal lands.
This is brief - I had posted in mid-year on this topic (not too much has changed).
Let's compare differences:
1. Stage of evolution - PLS has been around for 8-9 years and has been shipping material since ~2009. HBK has a permitted deposit, yet to ship material, yet to mine (soon to happen) - so from a stage of evolution PLS is more mature, not fully mature - still planning and developing its resource position and its markets, customers, outlets (terminals).
2. Volumes. PLS shipping 3.6M tpa. HBK soon to strike a blow.
3. Materials. PLS mines sand and gravels. HBK has glacial spree - or hard rock.
4. Materials quality. Has market proven high quality sands and gravels embraced by structures requiring high technical requirements. This is known by US Corps of Engineers, Cal Trans, Hawaii - that knowledge through testing and use has come over 10 years now. HBK material tested and validated by local sources - and results very good.
5. Material pricing: PLS has a $13 ASP (sand is priced lower than concrete rock). HBK believes its concrete rock will fetch $30/ton.
6. End-Use-Markets: PLS has developed marketing partners in SF BAY and is doing likewise in PoLB - that takes time and they have done a great job in entering markets, and increasing volumes. Their markets are principally in California. HBK is in a stage of market and customer development.
7. Pricing & markets: PLS seels into competive, mature markets where prices are published and understood. HBK potentially hits a local jackpot if LNG projects and other projects come to fruition - it would be zero to 120 in 6 seconds. Somewhat binary. But they have a capitve supply - in a market with infinite demand. There would be no ceiling on price. I am sure they could sell their material for $60 or $80 per ton at certian moment - and the customer would have no problem paying at this level. But first the demand has to materialize. I think the outcome could be that strong.
8. Unit costs. PLS have a properly established mine at Orca - and now have 3.6m tpa or soon 4+ m tpa - and they are humming along and doing an excellent job on op costs, op unit costs. HBK.
9. Logisitcs. Marine aggregate is not easy, and there are problems and costs and challenges. HBK helps hitting the jackpot by serving a local, capitve market - it derisks executuon - if they have 1hr turns across the sound. Advantage HBK.
10. Regulation: More in California and probably fewer in Prince Rupert (advantage HBK).
11. Seasonality. Maybe a bit more up in Prince Rupert - to be determined: if it effects ops or customer behaviour in Jan-March.
Hope this helps, everyone.
I more than anyone, am looking for Prince Rupert demand to materialize, for HBK to book it, and to get the mine and shipping working. If it happens well, and I believe this, from this level - you have a 10 to 15-bagger. No fear. I can see the stock having a $3 valuation.