AmerAlia Anticipates Lower Costs
CENTENNIAL, Colo., Nov. 15 /PRNewswire-FirstCall/ -- AmerAlia, Inc. (BULLETIN BOARD: AALA) announced it expects lower production costs when it drills its new production cavity next year. Referring to the company's report of its financial results for the quarter ended September 30, 2004 to the SEC filed today, Bill H. Gunn, AmerAlia's Chairman and President, said the company is optimistic about its future.
AmerAlia produces and sells natural sodium bicarbonate through its subsidiary Natural Soda. Sodium bicarbonate is commonly known as baking soda. Mr. Gunn said the company planned to drill an additional cavity for the recovery of sodium bicarbonate in the second quarter of 2005 for an estimated capital expenditure of nearly $2 million. The company expects this new well will provide access to another 300,000 tons of sodium bicarbonate and further savings in production costs. AmerAlia is currently discussing with bankers the funding of this investment and the provision of additional working capital.
Discussing market trends, Mr. Gunn added that the company is competitive especially in the lower priced animal feed markets where its low production costs provide a strategic advantage. While Natural Soda faces competition in these markets from substitute products, these are limited in supply. In addition, these substitutes do not always enable the increased milk production in dairy herds that can be obtained when sodium bicarbonate is used as a feed supplement. Consequently, Natural Soda believes it can increase its sales, gain additional customers and utilize remaining plant capacity. Meanwhile, tighter management and implementation of cost controls is reducing production costs.
Natural Soda owns the largest Bureau of Land Management sodium leases in northwest Colorado. This region contains the largest known deposits of naturally occurring sodium bicarbonate in the world. Natural Soda's leases are located in the center of these deposits where the concentrations of sodium bicarbonate are greatest.
Traditionally, sodium bicarbonate is manufactured chemically from soda ash, however, Natural Soda recovers natural sodium bicarbonate using solution mining. Consequently, Natural Soda believes it enjoys significant production cost advantages over chemically manufactured product.
A copy of the company's filing can be obtained through AmerAlia's web site http://www.ameralia.com/.
Disclaimer
The future conduct of the business of the Company is dependent upon a number of factors. There can be no assurance that AmerAlia will be able to conduct its operations as contemplated herein. Certain statements contained in this report use terms denoting future possibilities and are forward-looking statements. The accuracy of these statements cannot be guaranteed as they are subject to a variety of risks (including, without limitation, those risks described herein and in the Company's other reports filed with the Securities and Exchange Commission) which are beyond the Company's ability to predict or control and which may cause actual results to differ materially from the projections or estimates contained herein. It is important that each person reviewing this report understands the significant risks attendant to the operations of AmerAlia. AmerAlia disclaims any obligation to update any forward-looking statement made herein.
AmerAlia, Inc.
Web site: http://www.ameralia.com/
