Operations Update

January 2015

 

Production and materials

The Group currently has five quarries under licence and operating agreements in place with a further three quarries. Four of Fox Marble’s quarries are currently in operation at Cervenilla, Syrigane, Malesheva and Prilep in Macedonia.

Cervenilla

This site was our first and was opened in November 2012. The quarry is being exploited across three separate locations (Cervenilla A, B & C) from which red, light and darker grey marble is being produced in significant quantities, with over 6500T quarried in 2014. The quarry is producing large compact blocks which have been sold as blocks and processed into polished slabs for sale.

Malesheva

In July 2013 the Company acquired the rights to the Malesheva quarry in Kosovo from a local company. The quarry contains a mixture of cream and Bianco Illyric marble. This quarry is now open and producing, and with operations being ramped up to reach full levels of commercial production.

Syrigane

The quarry at Syrigane (formerly Suhogerll) is open across two benches. The site contains a variety of breccia and callacatta type marble and has been producing significant volumes of breccia marble in large compact blocks, with over 6000T of marble quarried in 2014.

Prilep

The Company has entered into an agreement to operate a quarry in Prilep, Macedonia. The agreement is for a period of 20 years with an irrevocable option to extend the period for a further 20 years thereafter. The Prilep quarry contains the highly desirable white Sivec marble, currently available from only one other quarry in the world, which lies adjacent to the Prilep quarry.

Sivec marble prices begin from €500 per metric tonne (unprocessed) representing the most expensive marble in the current Fox Marble portfolio.

This quarry is now open and producing, and operations are being ramped up to reach full levels of commercial production.

In Q3 2014 the Company acquired rights to a second quarry in Prilep, the Prilep Omega quarry. Exploitation of this quarry is in the planning stages with a drilling program being implemented.

In total over 14,000 tonnes of marble have been extracted from the operational quarries in the year. Fox Marble has invested in further quarrying equipment in the year to ensure increased levels of production are met and the Company is able to fulfil demand. The Company has also procured two large chain saws to be deployed to the quarries to substantially increase production in 2015. The first of these will be delivered in January 2015.

Fox Marble’s long-term strategy is to expand its portfolio of marble quarries in South East Europe and to widen its geographic reach and commercial presence as it looks to build a profitable marble quarrying and production business.

 

Factory

A double skinned steel factory for the cutting and processing of blocks into polished slabs has been purchased and is being erected on a 10 hectare site the company has acquired in Lipjan, close to Pristina airport.

The Company’s factory is under construction and, despite unexpected adverse weather conditions; the skeleton frame of the building has been completed and machinery is being installed. It is now anticipated that the factory will be operational by the end of H1 2016.


Sales and Marketing

  • Confirmed orders to date for 2015 of €1.5m of marble
  • Confirmed or completed orders under the Pisani offtake agreement totalling over €250k
  • Two year offtake agreement with Marmi E Graniti D’Italia S.r.I (“MGI”) signed in October 2014 for 100T of marble per month of Fox Marble’s grey, red and breccia stones; over 300 tonnes of marble shipped to date
  • Offtake agreement with Banyan Stone Limited (“Banyan”) signed in December 2014 for a minimum commitment of €1.5m of block marble over the next 18 months
  • Fox Marble product is being sold via its own office in Carrara and its distributors in London (Pisani) and New York (Royalstone)
  • Sales agency agreement with Zhong Shengdestone Co.,Ltd (“ZSC”) signed in December 2014 with minimum quantity of 10,000 tonnes per annum
  • Further partnership agreements are being discussed in the Middle East and India
  • The company has experienced a significant improvement in the level of interest in our product, particularly in the last quarter of 2014. In part this has been a result of Fox Marble now being able to provide a broad and varied inventory of good quality block and processed marble for potential customers to review.