Earthworks Industries announces net worth of planned California facility

Earthworks Industries Inc., a waste management and recycling company headquartered in Vancouver, British Columbia, has announced the net present value of its integrated waste handling landfill project at the Cortina Rancheria in Colusa County, California.

The project is being developed by the company’s U.S. subsidiary, Cortina Integrated Waste Management Inc. The company says these calculations, which cover a period of 25 years, show the value of the project—using 7 percent and 5 percent discount rates—to be between $158 million and $202 million. The after-tax annual cash flow rises steadily from $13.5 million in the first full year to over $30 million in 25 years.

The calculations project a revenue stream that steadily builds over time until the capacity of the project is exhausted. The company says it has used the net present value of this cash flow stream to determine the current value of the asset.

Robert Gardner, a senior vice president with Long Beach, California-based SCS Engineers, reviewed the financial models for Cortina over several months. SCS Engineers Geologist Wayne Pearce also assisted in the review. After reviewing the model and a July 2022 basis for the project’s design, SCS provided its opinion in a letter. 

“The proforma model developed for the proposed landfill construction and operation appears to be well structured and considers the major fixed and variable operational costs, projected revenues and capital costs associated with developing, closing and maintaining the site during the post-closure care period,” the SCS letter says.

The calculations assume an average tipping fee of $98 per ton, daily tonnage of 920 and 1,500, 70 percent of total cost financed with debt, 10 percent equity and 20 percent via sinking fund financed through the operation. Variable operating costs have been deducted from anticipated revenue to arrive at projected net revenue. The estimated peak outstanding debt required for construction is $23 million; the amount of new equity required will be $10 million; and inflation is assumed to average 2 percent over the forecast period.

Based on the pending tentative project approval by the Environmental Protection Agency and the updated basis of design, the company is planning to begin construction in spring 2024 and targets commencing operations by 2026.

The landfill will include a leachate plant, water monitoring equipment and a landfill gas-to-energy facility, according to Earthworks.