In 1996, we began construction activities to develop the Alleco Stone facilities near Phoenix, Arizona.  We completed initial development of the extraction pit area and  constructed a 600-ton per hour aggregate processing plant which is equipped to crush, screen, and wash aggregate products.  By 1998 the sand & gravel operation was profitable and growing market conditions justified modifications and expansion.   We are now adding additional crushing and washing plants and equipment to increase production by more than 200% while expanding capabilities to produce custom specification materials. Our plant is capable of manufacturing a wide spectrum of aggregate materials ranging from sand products to course aggregates.  Virtually every product that is typically specified for highway and building construction, in the Phoenix area, will be manufactured at our facility.  The Plant also manufactures special products for markets such as golf courses and sports complexes.

Alleco has furnished special root zone materials for projects such as the Bank One Ball Park.  The sand reserve we control has the distinction of approval, by the U.S. Golf Association.  This approval recognizes the sand as meeting specialized specifications for various golf course and sporting complex uses.

In June of 1997, Alleco entered into a twelve-year contract to supply sand and gravel requirements to United Metro Materials, Inc.    This contract provided for the construction of a concrete batch plant on the Alleco site and further provided that Alleco would supply United Metro's aggregate requirements for the operation of this concrete plant.  Construction of the plant facility was completed in July of 1997 and daily concrete production continues from this plant.  United Metro was the largest producer of sand and gravel and concrete products in the greater Phoenix area.  Recently United Metro was acquired by Rinker Materials, who with this acquisition has become the second largest aggregate producer and the fifth largest concrete producer in the country.  Acquisition of this contract relationship with Rinker represents a substantial and positive factor in the Alleco development plan.  Additionally, Alleco developed a relationship with Otto Trucking to haul sand and gravel materials and participate in Alleco’s marketing effort.  This relationship is also notable in that Otto is the largest trucking contractor in the Phoenix area.  Development of these two relationships created assurance that the Alleco expansion program will be justified and successful. 

During the same period Alleco designed and constructed this unique, high production excavating system to service its raw   material requirements.  The system reached out approximately 800 feet and could dig up to 100 feet below the water level.  Changing the positions of the skyline, which supports the 10 to 12 cubic yard drag bucket, could be accomplished within minutes by virtue of a track mounted mobile boom which mobilizes the tail anchor end of the skyline and the bucket haul back lines.  This mobile system was a versatile excavating system that could dig in a radius of approximately 240 degrees with an overall pit diameter in excess of 1500 feet.  This excavating process allowed Alleco to recover its mineral reserve below the water table and open the facility as a viable long-term resource.   The dragline operation also established an initial lake consistent with the Lake Alleco Development Plan and provided conditions for the next phase of mining and lake development, requiring a dredging operation.

Construction of the Alleco facility is 95% complete.  Construction and installation of  the dredging operations represent the final plant modification required to reach our goals.  This installation places into production a floating 14” dredge that will ultimately reduce  expenses from our most costly maintenance area.  The operating and maintenance expenses saved by this dredge are generated in the mineral extraction pit and the roadway maintained for transportation of raw product to the plant.  Reductions in cost are generated by elimination of daily road maintenance and elimination of the dragline operation, one hydraulic excavator, two rubber tired loaders, and three dump trucks.  This manpower and equipment is replaced by the 14” dredge that pumps 6,000 gallons of water to the plant each minute and will deliver nearly 500 tons of 8” minus aggregate feed to the plant each hour.

In conjunction with the dredge and feed by pipe, we are installing a classifying tower and equipment which will increase sand production by nearly 300% and eliminate the need for screening ¼” minus product (which is the slowest and most expensive grade of product to screen).  Long term savings over conventional excavating and haul operations justify the investment as the market grows in the Phoenix West Valley.  The dredge operation will expand our mineral reserve by allowing more efficient extraction of usable mineral and the ability to use, otherwise wasted fines from our overburden, in dry sub base products.