Sealaska Corp. sold its limestone mine on Prince of Wales Island last week.
The regional Native corporation invested a reported $20 million in developing the Admiral Calder Calcium Carbonate Mine since the 1980s, but shut it down in 2002.
Executive Vice President Richard Harris said the company did not want to invest any more in the project. Sealaska sold the mine to California-based mineral operator Select Resources Corp., a subsidiary of Tri-Valley Corp.
Neither party would disclose the amount of the sale. Harris said it was "not huge."
The mine produced a high-grade form of calcium carbonate used in paper, paint and plastics, as well as other minerals used in rubber and roofing.
"It looks like a sugar cube," said Henry Sandri, executive vice president of Select Resources, about the rare purity of the mineral.
Sandri said the mineral's market is hot, particularly in Japan, Korea and China. It also can be shipped to markets on the West Coast.
Select Resources deals solely with minerals, so it has a history of contacts with customers, expertise in producing the minerals and the skills to market them - better than Sealaska, Sandri said.
Harris said Select Resources is better suited to break into the high-end market and reap a wider variety of minerals from the mine. Only 15 of the 572 acres of mineral-rich property have been mined.
"The market is controlled by a small number of companies," Harris said.
Sandri said part of the secret to success is patience and looking at long-term growth. Harris said Sealaska was not able to get profits as fast as it expected.
The Calder site was first mined in 1905 but abandoned for decades until Sealaska purchased it. Select Resources said the mine contains about 14 million tons of drill-proven and probable reserves and 12.5 million tons of possible deposits of the ultra-white calcium. Only 10 percent of the property has been explored.
Because the mine is on "standby" status, the operating permits and tideland leases previously acquired are still valid, Sandri said.
The mine already contains a wealth of infrastructure left by Sealaska. Sandri said repairs, upgrades and geological studies still need to be done, but when Select Resources decides to run operations, mining could begin in less than a year.
Sealaska incurred a $1.48 million impairment charge in 2002, according to its 2004 annual report, which also showed the company losing $216,000 on the mine last year.
The mine was sold to a buyer that defaulted on the contract in 2003 and to another purchaser that declined to complete the sale last year.
Harris said the company is exploring options to reinvest the money.
Because dividends given to shareholders are figured from a five-year average of earnings, the money made from the sale cannot indicate how it will affect dividends, Sealaska spokesman Todd Antioquia said.
"It contributes positively to the earnings of the corporation for 2005," he said.
Sealaska's profits have dipped from 2003 and previous years. The company made about $152 million in revenue and $16 million in net earnings in 2004, compared to $161 million in revenue and $33 million in profits in 2003.
Revenue for the company peaked in 2002 with $169 million, with $42 million in earnings.
Harris said the decision to sell the mine was not based on declining profits.
Select Resources did not say how many they will employ at the mine, but Sealaska previously ran shifts of 10 to 15 people, Sandri said. The company is deciding whether to base its office in Ketchikan or Juneau. The company also has precious metal operations near Fairbanks.
Andrew Petty can be reached at firstname.lastname@example.org