Document G6RMX4bw6jgvXDJmLx2p2dEVv

FILE NAME Talc TALC DATE 1972 Jan DOC TALC432 DOCUMENT DESCRIPTION Grantham Proposition * _ GRANTHAM PROPOSITION Prepared by Celite Division Manville Products Corporation a wn sen De January 1972 co . ee ee : , 000223 The Celite Division proposes that JohnsManville enter the tale business We propose to do this by 1 Buying for stock or cash from Trust and the minorityminority holders the the Louise Grantham assets of the Louise . Grantham Corporation and subsidiaries and the Trust's and others others interests in mining claims = The principal assets are mines at Warm Springs Canyon California and atalc grinding mill in Los Angeles 2 Buying grinding and loading facilities at Dunn Siding California from the Pfizer Corporation 3 Expanding Expanding Expanding Expanding production facilitieast Dunn and Los Angeles 4 Installing environmental control facilities at Los Angeles Dunn and the mines Our investment would be . Assets - Trust and minority holders Pfizer facilities Expansion Purchase 4 PurchasePurchase Purchase Purchase GrahamGraham Graham Graham Environmental : control : oo TotTotaal l . | Springs MiNY Warm Springs 3,900,000 500,000 - 1,400,000 500,000 . . 6,300,000 6,300,000 6,300,000 6,300,000 000224 Talc Industry Talc is a natural mineral generally magnesium silicate mined and processed throughout the ~ 4 oe the United States are in New world Principal York California operations in Montana and Vermont called castern talc tends to be fibrous while Western talcs are softer whiter and have a platey . structure For low grade applications either can be used and businesiss divided geographically For applications requiring high brightness and low abrasiveness western taltaclc iiss preferred and high quality grades are marketed on the east coast In 1971 total market was 875,000 tons and During the 1960 decade ton sales increased % dollar sales at a rate of % 25,000,000 nearly 25,000,000 at a rate of about . Sate amram * ~ Major uses are in ceramics paint paper plastics insecticides and roofing Paint and paper applications have shown the greatest recent growth _~ up 54 and 112 respectively in the last decade Growth has been most rapiidn highly processed highest priced specialty markets particularly in the past few years Talc Quality Processed ground talc in generagleneral has commercial utility utility as an inert extender pigment because of we. color whiteness wee low abrasion relative . . 000225 wee chemicalchemical purity or not . ... fibrous brightest recognized ' Desertalc is world as one of the world Desertale is recognized as having low abrasion index as purity and this relates to good chemical Desertaic is non- _ where fibrous and as such has application fibrous talcs are * deficient 7 Grantham in the Industry . sales and Grantham are 45,000 45,000 tons 2,300,000 of ground talc of tons % and of the dollar market Grantham also sells 25,000 25,000 tons 700,000 of crude talc to the United Sierra Division of Cyprus Mines . ' Reserves The " opened talc mines at Warm are being worked at this time furnished by Grantham together together Springs numnber umber three Two Based upon geological datadata with Manville mminingining surveys there are Estimated recoverable - first layer Estimated recoverable ~ second layer Total - - 1.2 million tons = 1.5 million tons of ~ 2.7 million tons On a gross basis there are Estimated - first layer | Estimated - second layer Total J 2.1 million tons i 2.5 million tons - 4.6 million tons 000226 Some portion of tonnage between gross and recoverable may be mineable A drill program would dictate action action to be taken At current and forecasted withdrawal rate reserves are assured for in excess of 25 years Clay reserves at Mohave California are estimated in excess of one million mineable tons At current and forecasted annual withdrawal rate the reserves are ample for in excess of 50 years People Grantham's current employment is approximately 65 hourly and Key 15 salaried employees in the latter people : of whom very probably wouldwould joijnoin M Rolf F. Bassett would Management Richard Lamar oe D are and each | oe Age 60 - Age 50 Earl Smith ~ Sales : oo Age 48 Richard Franklin Norman B. Scheffel | Daniel B. Tash Mining H Sales oo - Age 42 | 7 oS 7 .Age 43 LA Plant Supt 2 Age 53 * Now on cont wir th a Grac ntht am Included in this group are considerable talentasnd capabilities related to the talc business resultingresulting from years years of of exposureexposure in Grantha anmd formerly withwitwith h other western talc businesses We plan also to have year Consultant Contract with W. B. Grantham for 60,000 per year . : 000227 Mines The Warm claims adjacent Springs Canyon tale mining operation includes Not all are being worked Those that are not contiguous with those that are worked to or 80 lode are BY Grantham engineers virtue of the Apex Law as related by mining ore | are included The basis is that any Apex additional claims claim is considered to body continuous beyond an established have common ownership is in Inyo County California lower The Warm Springs operation Pacific Death Valley and is 1 130 miles to Union rail head head Field or Dunn Siding California. 140 miles to Las Vegas Nevada 300 miletso Los Angeles Warm operation includes The Springs outside power Diesel operated electrical generation no power Well equipped base living and recreationrecreationrecreation facilities including outside swimming pool source of spring fresh water supply . An ample E & R facilities Ore is Mining hauled is all all by contract carrier from Warm Springs to rail underground using room and pillar method head The clay operation is at Jaw Bone Canyon Kern County Californi to From mine - Cantel Cantel California rail head Southern Pacific 7 a 7 000228 miles * Ove is contract mined and hauled Contract included in the Grantham package calls for availability until mine is exhausted Mining is all open pit Dunn Option JohnsManville has option to purchase plant auxiliary buildings and land approximately approximately 280 acres from Pfizer The latter acquired the total facility in 1967 from Kennedy Minerals including talc mines Pfizer had at the time milling facilities at Victorville California and a second plant was soon conside excess The Dunn plant has been operateofdf and on during the past few years Lompoc plant engineers have surveyed and examine thde Dunn facilities and concur with the option list of equipment and facilities in general Option expires in late February 1972 Financial FinancialFinancial Projection - 5 Years Sales Sales Grantham's sales limited by capacity are 3.0 million - of of the market Using Grantham's high quality tald and our sales force in our markets we plan a vigorous expansion to 5.2 million sales in 1976 attaining 14 of the market CRMC 000229 Earnings . : : oo JU . We plan 280,000280,000 of earnings the first year current level 1976 growingto 500-000 by 500-000 fev . . ; . depletion very important Tax is tax has an effective to earnings Grantham now rate of of pretax earnings we have used this for 3 years On the advice of the Tax Department . we have used 35 after that Investment and Cash Flow requested 5.6 will Of the 6.3 6.3 million about about ,, 5.6 million million be 1.3 1.3 million million : In the next few years we schedule ~~ 900,000 more spent now . ; with present forecasts most of this . At - the . end of . . . the first 1975 yearwe and 1976 will be out . . 4.6 5.0 million in the the cash flow In for years next few we expect to pay ~ future expansion and generate a positive flow of 2-21.9 million We do not pretend to know the long future of talc or our believe participation but we we can eventually attain sales of 10,000,000 and earnings of 1,000,000 1,000,000 1,000,000 However if we can hold our sales and earnings after 1976 we will attain a DCF yield of % on this venture 13.2 CRMC = - Health Aspects Geology Chemical Talc Formation talc is in the Crystal Spring Geologically Grantham Valley part of the Pahrump Group in Death layers Range There are three principaplrincipal are outcroppings bodies and | the ore of diabase these points Ore strata are separated of the PanamintPanamint There of ore bodies portals are located at by dolomitic and volcanic rock formation There are faults in which have beebenen established in terms of quarrying thickness 10-15 The mineable ore beds are 10-15 feet in the deposit procedures pprrocoecduerdesures and lile ie with _ dip of 90 to 20 generally essentially Chemically the talc is magnesium silicate Minor carbonate sodium carbonate and potassium . composition is | calcium titanium is oxide of aluminum iron oxide Trace composition rn ee A nm area t en caatmrine eee ae manganese and copper H ! | small or minor calcite iI\ Petrographically talc is major tremolite trace to small The following points are significant 1 Grantham talc vs. eastern talc and current and projected uses is softer other than platey in cosmetics and food products =~ mine working people 7 on record with ; 2 No health cases are bpart related to dust or other exposure or other CRCRMM C C TALC Sierra other particularlpyarticularly United Division 3 Reportedly omy Cyprus Mines and Vanderbilt have had no cascs related to environmental exposure Clay Grantham clay on contracctontract not ownership is geologically | siliceous in compositioncomposition Minor composition a claystone highly oxide traceis oxide of iron is aluminum and potassium calcium magnesium and sodium The composition may be considered an aluminum silicate but not kaolinic in type In terms of health hazards treat as a nuisance dust it is conjectured that environmentall 000232 FINANCIAL DATA M's 1972 Sales - a Net Earnings 3600 -280 Cash Flow } Investment Investment -5000 5000 1973 3900 327 370 +580 +580 700 300 1974 4300 450 oy 450 _ +760 +760 14.0 40 1975 1976 4700 5200 340 400- -fl 530 +380 +270 f3 +380 4340 4340 399 290 570 470 Total 6300 CRMC TALC MARKETS - 000 Tons . Ceramics Paint Paper Insecticides Roofing Rubber Cosmetics Plastics Other . 246 166 55 54 30 24 12 > 283 18 12 5 0 7.5 7.5 9.5 0 o 0 1.5 2.5 2? | 0 11 | wo. ? CRMC 0.234 Paint Industry Customers Include | Celanese Coatings Desoto . Glidden . - National Lead Sherwin Williams a 7 | Paper Industry Customers Include . | American Can Georgia Pacific Kimberly Oxford Paper i Westvaco Weyerhaeuser 7 000235 Reference ~ Formula No. 65009.6 _ E.I. DuPont de Nemours & Company Inc. Oo _ Pigments Department Wilmington Delaware 19898 FORMULATION | "> INGREDIENTS | FOUNDS | GALLONS _ DISPERSION Water Carbitol _ Daxad 30 Igepal CA360 1. : Pure titanium dioxide 960 Talc 1 - Mica 325 mesh waterground CELITE 281 1 Colloid 581 : | REDUCTION | Cellosize 4400 % solution Colloid 581 Witco 912 _ Elvacet 1454 amino-2methyl-1propanol amino-2methyl-1propanol _ , Super - - 150.0 18.03 30.0 3.51 | 5.0 0.52 ee 5.0 0.57 te ce 175.0 5.32 oe 116.0 4.88 ee ' 30.0 1.27 e - 50.0 2.60 1.0 0.15 : 118.0 1.0 4.0 432.0 4.0 10.0 1,131.0 14.10 0.15 0.48 - 48.00- 0.51 1.23 101.32 Pigment Volume Concentration Viscosity overnight Disperse in high speed disperser = 36.4 70-75 KU 000236