Presented by: Richard Edmunds, ARA, AAC
82nd Annual Meeting of ASFMRA
Phoenix, Arizona
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Overview of Quarries and their Evaluation
This presentation is designed to acquaint the
valuation professional with the quarry industry.
The quarries discussed will include gravel,
limestone, bluestone and slate as found in the
northeastern portion of the US.
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Overview of Quarries and their Evaluation
A review of quarry characteristics, deposit types,
processing and marketing will be covered. The
discussion of those items of information needed
for the valuation process will be included along
with a review of the application of the Sales
Comparison Approach and Income Approach
(DCF).
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Types of Deposits
 Gravel – is composed of unconsolidated rock fragments
that have a general particle size range and include size classes
from granule to boulder sized fragments. One cubic yard of
gravel typically weighs about 3000 pounds.
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Types of Deposits
 Gravel
 Limestone – is a sedimentary rock composed primarily of
calcium carbonate in the form of mineral calcite. Some
varieties of limestone perform well in construction use
because they are strong dense rock with few pore spaces.
These properties stand up well to abrasion and freeze/thaw.
 One cubic yard = 4,000+ lbs.
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Limestone
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Limestone
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Limestone
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Types of Deposits
 Gravel
 Limestone
 Bluestone – Pennsylvania Bluestone is unique sand
stone found only in Northeastern Pa. It derives its
name from its typically blue color. It is marketed in
two types: Dimensional which is used for stair steps,
window and door fixtures, countertops and
Flagstone, which is used for walkways and patios. 12
Bluestone
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Bluestone
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Bluestone
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Bluestone
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Bluestone
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Bluestone
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Bluestone
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Types of Deposits
 Gravel
 Limestone
 Bluestone
 Slate – is a fine grained, foliated, homogenous metamorphic
rock derived from an original shale-type sedimentary rock
composed of clay and volcanic ash through low grade regional
metamorphism. The result is a foliated rock in which the
foliation may not correspond to the original sedimentary
layering. When expertly “cut” by striking with a specialized
tool in the quarry, many slates will form smooth flat sheets of
stone which have long been used for roofing and floor tiles. 20
Slate
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Slate
Slate
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Slate
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Slate
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Slate
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Slate
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Slate
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Slate
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Slate
Slate
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Common Characteristics
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Open Quarries
Overburden…..
Permitted by State DEC, DEP, Etc.
Subject to Safety Regulations
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Quarry Considerations
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Deposit Characteristic
Potential Uses
Quality of Deposits
Yield and/or production factors
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Quarry Considerations Continued
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Conversion Factors
Tons vs. Yards
Life of Quarry Factors
Processing and Marketing Issues
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Items of information to begin the
valuation process
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Engineer’s Reports
Deposit Quantity and Quality
Local, State and Federal Environmental Issues
Reclamation requirements
Cash Flow Statements
Marketing Issues
Interviews
Other
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Valuation Process
 Sales Comparison Approach
 Usually limited number of sales
 Sales may include multiple types of assets
 Income Approach
 Discounted Cash Flow
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DCF Considerations
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Breakdown of Income
Deposit Quantity
Categories of Expenses
Increase or Decrease of Income and Expenses by %
or $
Number of Years for DCF
Reversion Considerations
Discount Rate
Excess Deposits,
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Types of Deposits
 Gravel
 Limestone
 Bluestone
 Slate – is a fine grained, foliated, homogenous metamorphic
rock derived from an original shale-type sedimentary rock
composed of clay and volcanic ash through low grade regional
metamorphism. The result is a foliated rock in which the
foliation may not correspond to the original sedimentary
layering. When expertly “cut” by striking with a specialized
tool in the quarry, many slates will form smooth flat sheets of
stone which have long been used for roofing and floor tiles. 37
That’s all Folks!
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