Cortina Project update
Earthworks Industries Inc (“EWK”) is pleased to provide the following update on its integrated waste management project (Project) at the Cortina Rancheria in Colusa County, California. The Project is being developed through its wholly owned U.S. subsidiary Cortina Integrated Waste Management Inc. (CIWM).
CIWM has a federally-approved Lease (Lease) of approximately 443 acres of the Rancheria with the Kletsel Dehe Nation, which includes use of the property for a Class III municipal waste landfill, material recovery facility, composting facility and soil bioremediation operation.
CIWM’s focus will be resource recovery. Materials delivered to the facility will be sorted and processed with the latest technologies available for diversion. Organic waste will be processed on site while other recovered materials will be shipped for further processing. Residual waste will be landfilled on site.
CIWM has continued to work in conjunction with the Tribe’s regulatory agency, the Kletsel Environmental Regulatory Authority (KERA) and the U.S. Environmental Protection Agency (“EPA”) on completion of federal Site Specific Flexibility Requests (“SSFRs”). The SSFRs describe specific aspects of the facility’s design which customize the Project to the existing environmental attributes of the site.
CIWM has worked in collaboration with both KERA and EPA over the last year updating the SSFRs as requested by the agencies. The requests relate to an alternative final cover and to water monitoring. Consistent with the history of the Project, which included exhaustive environmental reviews, and after consulting with KERA, at the direction of EPA, CIWM agreed to update the design of the landfill cover as preferred by KERA. In addition to the design update for the cover, which KERA advised they would approve, updated surveying for water monitoring was initiated recently. SCS Engineers, the Project engineers, have advised that the updated design will be completed by March. As always, the Project is being designed to comply with Federal, Tribal, or California regulations, whichever is strictest because CIWM’s goal is to ensure that the Project meets the highest environmental standards.
Management has also updated an earlier revenue model projection for the Project. The model anticipates that in addition to the approximately 8.5 million tons of disposal capacity, a variety of waste would be processed. Updated disposal fees of approximately $75 U.S. per ton have been used. Taking into account anticipated inflation, we can now informally project the gross revenues over the life of the Project of at least $725,000,000 U.S. Revenues to the Tribe based on lease payments and royalties will be approximately $1.5 million per year.
We have increased projected capital costs for the project to approximately $90 million U.S. from the previous $75 million and operating costs to approximately $185 million from the previous $155 million.
Management also advises that its Appeal of a Notice letter dated March 1, 2019, terminating the Lease is still pending disposition. Management believes the latest action lacks merit and will be reversed as was the case in 2015, and has continued to move forward with processing of the SSFRS and all other development efforts.
Management looks forward to continuing to work in collaboration with both KERA and EPA in advancing its precedent setting Project at Cortina.