Century Brown, to this point the foundation of the (firm name redacted) rock line, is all but played out. While nearly 10,000 tons remains in stock, no size is carried in sufficient quantity to either support ongoing jobs with the firm’s larger customers or to facilitate specification on new developments. As such, the remaining inventory is suitable only for smaller jobs and drop-in customers.
It will therefore be critical that (firm name redacted) develop another brown rock as soon as possible; while significant (parent firm name redacted) resources have been dedicated to the hunt for a new brown over the last six months, no viable alternative had been found.
The dilemma could possibly be solved with the development of a new rock source currently held under contract (but not ownership) by (firm name redacted). The development is a fortuitous one, as (redacted) is currently (redacted)'s most valuable vendor. Given the interim name Tiger Brown, the resource shows good potential to not only inherit the current Century Brown market share, but to grow that share into new distribution channels.
This document will propose the terms under which Tiger Brown is developed and produced, will explore the finer points of that proposal, and will offer a pro forma estimate of the cost/profit structure of an initial Tiger Brown venture.
While (firm name redacted) has enjoyed dramatic growth over the last two quarters, the company has yet to completely reverse the negative trend at the bottom of the profit/loss statement. Virtually any progress is welcome as the company’s managers strive for the break-even, but the challenge is a stiff one. Not only must (firm name redacted) maintain its customer base and continue to serve and grow those sales – (firm name redacted) must also grow the customer base itself. The obvious directions for growth will be in the opening of new markets both above and below the current typical (firm name redacted) customer size. At both the developer/community level (the “macro” end of the supply spectrum) and the retail/end-user level (the “micro” end of the supply spectrum), there are enormous quantities of rock currently shipping to markets in which (firm name redacted) has no meaningful participation.
Despite the robust trend, current (firm name redacted) growth levels remain unsatisfactory in the p/l analysis. In order to reach year-end revenue goals and to grow beyond those goals the company must be prepared to take the proactive step – to do something new, to bring new products and/or new ideas to the market in each and every month of operation.
It’s in that context that (firm name redacted) must plan for and develop new, stable, and – perhaps most importantly – proprietary products. Gone is the day when the company can afford to broker materials with no stake in the development and ownership thereof – unless the step is taken to offer those products to the public on a large scale, at the $30-plus price-point. Since the company is still compelled to maintain a “low profile” at the Cactus location, a proprietary strategy is one of the few remaining options to employ.
4. The Site
The Tiger Brown resource is located within two miles of the southern border of Searchlight, Nevada, on the property that comprises the “Saturn” patented precious metal claim. The claim is not a functioning precious metal operation, so there is no threat of logistic conflict. Well water is available on the site, but power will be required for the pump. Road access is good, and the resource exists in close proximity to primary paved roads.
Interest in precious metals operations has resulted in unusually extensive geologic surveys of the site and its environs, giving a clear picture of the relative “wealth” of the resource. The site is characterized by what is herewith termed the Tiger Brown mineral characteristic – a gneissic rock that extends from the surface (thus free of overburden logistics) to depths of 200’ and beyond. Resident geology indicates that the said gneissic profile is prevalent in the area, to the virtual exclusion of “contaminant” rock and material in the extended site vicinity.
The site comprises a broad, rising plain, free of steep slopes, deep gorges or similar geologic obstructions. Ample room is afforded not only for crushing operations, but also for stockpiling and loading operations. At the same time, the terrain approaching the site is rugged enough to prevent off-road approach by any but four-wheel drive – a useful asset in the consideration of security measures for eventual stockpiles.