C) Local Commodity, Easily accessible
Our perlite pricing of $130 per ton is so low, Chinese perlite won’t be able to compete due to shipping costs. A typical shipping container holds about 17 tons of goods. 17 tons of raw perlite at our cost is valued at $2200 per container. Shipping costs of a container from China to LA port is at least $2200. Minimum price that a Chinese perlite company would have to charge is double our price of $260, due to shipping costs.
Most of our deposits are in the Southwest states. Our future expansion (popping) plants will all be within the Central Valley and so the product will be easily accessible to farmers. Our perlite would travel prior to processing from Nevada to the Central Valley (future) processing plant. From the processing plant, after the perlite is popped, farmers would have it delivered to their farms.
Contrast this to the journey Chinese perlite would take. First from the Chinese mine, it would have to go by truck or rail to their port. On the ship, it would come to the LA port. From the LA port, the container would be trucked up to some Central Valley processing plant. From the processing plant, it would be purchased and then the farmer would have it delivered to their fields.
As an example, vinyl flooring tile (1 ft x 1 ft) is considered very inexpensive flooring. Yet each ton of vinyl tile at a wholesale price of $0.50 per tile is still $1000 per ton. $17,000 worth of vinyl tile can be put on a ship container. Shipping costs of $2200 become a relatively smaller portion of the cargo price. Not so with perlite. $2200 worth of perlite is on a container and it cost $2200 to bring over. Now, the value of the goods is $4400 for 17 tons of perlite or $260 per ton. Remember, our pricing is $130 per ton. This is why Chinese perlite will have a difficult time competing with us at this low price. This is just a simplification. Raw perlite is what would actually be shipped, and raw perlite is cheaper but eventually raw perlite must be expanded for the perlite to be ready for use.
For similar reasons, concrete (Portland cement), water, gravel and sand are all local commodities.