RIFLE, CO--(Marketwire - May 25, 2010) - In a letter sent to shareholders this week, Mr. Bill H. Gunn, Chairman of AmerAlia (OTCBB: AALA), reports that the company's recent restructuring resulted in an increase in shareholders' equity of $75.7 million. Further, he reports the company is now largely debt free after a long and sustained effort by management and the company's shareholders. AmerAlia holds an 18% interest in an also largely debt free Natural Soda Holdings, Inc. NSHI owns Natural Soda, Inc.
AmerAlia believes NSHI and NSI have two world class natural resource assets and, potentially, a third. NSI owns some of the largest water rights in the Colorado River Basin, the most sought after water in the US, and the largest available deposit of naturally occurring sodium bicarbonate in the world. Deposits of oil shale lie below, above and are interspersed within the nahcolite contained within the sodium leases. While NSHI does not have any rights to this oil shale resource, it has applied for a research, development and demonstration lease over some of these oil shale resources.
NSI's water rights represent entitlements to 108,812 acre feet (35.46 billion gallons) of water per year. These water rights far exceed the expected needs of NSI's sodium bicarbonate business. They are assets that can be separately bought and sold much like real estate and could be very valuable. They can be utilized for agricultural, mining, industrial or municipal purposes. In April, 2010, the Water Court determined that NSI had met the standard of reasonable diligence with respect to its conditional water rights. Mr. Gunn believes this finding adds materially to the security of NSI's water rights. Mr. Gunn adds that the company is considering possible uses for its water rights to meet the increasing demand for this very scarce resource.
Mr. Gunn also reports that NSI's sodium bicarbonate business continues to produce a growing and profitable revenue stream. NSI is now the second largest producer of sodium bicarbonate in North America and the lowest cost producer with resources available for many generations. NSI drilled wells during 2009 to create two new production cavities, now producing improved quality brine. This has increased production tonnages and lowered costs. NSI's largest variable cost is for the natural gas used to heat the water in the solution mining process. Natural gas prices have recently fallen and this, in conjunction with the improved brine quality, has improved production efficiency. In April, 2010, NSI sold over 10,000 tons of sodium bicarbonate. Mr. Gunn expects these higher levels of sales to continue with NSI's improved production capability. In addition, NSI has achieved higher prices for its product and its customer base is expanding.
Based on these good results, NSI is planning to enlarge its surface facilities to enable it to produce up to 250,000 tons per year over time, approximately doubling the current size of its operations. It has the preliminary design of the expansion planned and is investigating financing options for its construction. NSI is also looking at other mineral properties that may have growth and synergistic potential.
Mr. Gunn said that AmerAlia wants to secure majority ownership of NSHI and participate in its expansion, raise additional capital and pursue the possible acquisition of other natural resource assets.
Mr. Gunn also announced plans to change the name of the company to Natural Resources Corporation, Inc. to more accurately describe its mission to identify and develop natural resource assets. A shareholders' meeting in June will vote on the proposal.
Forward Looking Statements
AmerAlia's future conduct depends on a number of factors beyond our control, so we cannot assure you we will be able to conduct AmerAlia's operations as we contemplate in this report. This report contains various statements using the terms "may", "expect to", and other terms denoting future possibilities. They are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We cannot guarantee the accuracy of these statements as they are subject to a variety of risks beyond our ability to predict or control. These risks may cause actual results to differ materially from the projections or estimates contained in this report. These risks are discussed in our annual reports filed with the Securities and Exchange Commission.
Contact Information:
Enquiries:
Bill H. Gunn
Chairman & CEO
Phone: (866) 952 2252
Email: billhgunn@aol.com