AOX INVESTOR COMMUNIQUE - Al McKee: 'Everything We Need is Right Here in Utah'
Dear shareholders and interested investors,
Please note that this is not a news release but is an investor communique for informational purposes.
https://utahpulse.com/index.php/features/business/423-al-mckee-everything-we-need-is-right-here-in-utah
Al McKee: 'Everything We Need is Right Here in Utah'
In 1982, Al McKee was attending class at the Massachusetts Institute of Technology when his professor held up a map and said there was only one area in the entire world where every mineral known to man had been found. The professor pointed to a location in Utah just below the Idaho border and drew a line along the Wasatch Front, west to the Oquirrh Mountains and down to the Arizona border.
"Every mineral known to man, including diamonds, has been found in Utah," McKee, CEO of Ophir Minerals and Aggregate Group (OMAG), said during EDCUtah's Quarterly Investor Update meeting last Wednesday. "And not only are the minerals here, but they are here in abundance and are some of the best quality minerals in the world."
The calcium carbonate in that cold cereal you ate for breakfast this morning was likely mined in Utah, as was the silica used to make the glass for your LG TV, Apple iPod, HP computer monitor and windshield for your Ford, Toyota, Nissan or Kia automobile.
"The mining industry is vital," he said. "Every one of us uses minerals, and every one of those minerals has to be mined." Minerals are basic components of everything imaginable, from consumables like pet food to household products like paint, nylon, and lipstick.
OMAG, an 18-year-old mining company headquartered in Payson, mines silica, calcium carbonate, limestone calcium, banakite, coal, perlite and gypsum. McKee said OMAG silica is the most natural on Earth at 99.999 percent pure. The high grade is perfect for the screens of TVs, computer monitors, smart phones and tablets. Further, the cost effectiveness of the silica mined in Utah is so superior to competitors that it gives his company a competitive advantage.
McKee, who grew up in Utah and attended Bingham High School and the University of Utah before MIT, spent his early years in the mining industry finding minerals for 3M Corp. During that period he made the decision he would start a company that mined industrial minerals used in daily life: silica, calcium carbonate and zeolites among others.
That decision brought him back to Utah. When the Environmental Protection Agency wanted an environmentally friendly mineral that cruise lines, the shipping industry and the Navy could use to sandblast barnacles off of ship hulls, OMAG worked with the University of Utah and the Utah Natural History Museum to discover banakite, a type of calcium carbonate hard enough to knock off the barnacles without leaving silica in the environment.
"Banakite can only be found in Utah," he emphasized, "and it is still being used today."
Although Utah has the highest quality silica in the world, McKee said it is cheaper for other companies to mine the mineral in places like Mexico, Brazil or China and ship it to the United States than it is for OMAG to mine silica in Utah and ship it to California. "Our mining costs are actually less than other countries, but the problem for OMAG is that we have to add $18 to $22 to the price of each ton of mineral we produce because of different regulations," he explained. "That makes it pretty tough to compete."
McKee said OMAG's solution was to do something very different. "We decided to make a product so superior that we would be cost effective, despite the regulatory burden," he said. At the time, glass companies in Indonesia were using the silica to turn out windshields, but only one out of every 26 windshields was quality, McKee explained. "So we met with Siemens Corporation in Germany and developed a system using silica mined in Elberta, Utah to make windshields for Ford automobiles. Our quality was so superior only one in 5,000 auto glass parts was rejected."
OMAG's quality efforts paid off, and Ford bought into it, he said. Ford made the decision to work with OMAG, visiting Utah twice in October. "We are working hard to keep Ford happy," he said.
McKee also spoke about a project during the height of the Gulf oil spill three years ago. Representatives from Halliburton came to OMAG looking for help as Halliburton and British Petroleum (BP) were trying to figure out a way to resolve the enormous plume of oil floating in the Gulf of Mexico. OMAG worked out a solution: a type of calcium carbonate, which is a soft, fresh-water mineral that is extremely absorbent. "It will hold eight times its own weight," McKee said, noting Utah is only one of two locations in the world that has three types of calcium carbonate.
OMAG shipped the soft calcium carbonate to the Gulf coast, where BP blew it out on the oil slick as a test. The calcium carbonate absorbed the oil like a sponge.
"The very next day we were in Rep. Jason Chaffetz office with Gov. Gary Herbert and Russ Fotheringham, EDCUtah's Utah County economic development manager, working on the opportunity," McKee said. "The day after that we were sitting across from Kenneth Salazar, who was the U.S. Secretary of the Interior, discussing what we could do to get this calcium carbonate to the Gulf."
As it turned out, McKee said, BP was able to successfully blow the calcium carbonate out over the oil slick, where the mineral rapidly absorbed the oil. "There was nothing synthetic about it. It was completely natural," he added. "These are things we have here in Utah, minerals we are able to utilize."
Now, McKee is on a mission to bring other opportunities to Utah. "I want to build something here. I want to make something in Utah using Utah products. We have the best minerals in all of the world right here. Everything we need in order to make anything is right here," he said. "This will be an opportunity for us to bring an industry back, a big industry. We intend to use the natural resources in Utah to bring industries that have gone offshore back to our local communities and the United States."
About Andover:
Andover is a precious and base metal exploration and development company focused on copper exploration at its flagship asset, the SUN project, located in the Ambler Mineral Belt, Northwest, Alaska. The Ambler Mineral Belt hosts world-class VMS deposits containing copper, zinc, lead, gold and silver. The Ambler Mineral Belt is one of the richest and most-prospective copper mineral belts located in one of the safest geopolitical jurisdictions in the world.
In Utah, Andover, through its 83.5% ownership of Chief Consolidated Mining Company whose lands are located in the historic East Tintic Mining District, has a multi faceted development approach. The Big Hill project, where Kennecott Exploration Company can earn a 55% interest by carrying Chief through to the end of a Feasibility Study, is focused on a large porphyry copper prospect. The Burgin Complex, host to silver lead zinc deposits, has completed a PEA and is preparing this complex and the Trixie gold mine toward exploitation. Chief is developing its limestone, iron ore/ halloysite and silica deposits through a 50-50 joint venture with Ophir Minerals.
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