Kaiser Ventures LLC

Description

The Asset: Kaiser's former Eagle Mountain iron ore mine is located in the remote Eastern Riverside County desert, 150 miles east of the Los Angeles basin. Strategy: Since 1988, Kaiser and its subsidiary, Mine Reclamation LLC ("MRC"), have been working to transform the former mine into a state-of-the-art, regional rail-haul municipal solid waste landfill that can meet significant demand for new, environmentally superior, solid waste disposal in Southern California. Execution: Kaiser has successfully navigated the costly state's treacherous political and regulatory processes to complete the entitlement of the regional landfill capable of processing up to 20,000 tons per day. However, the landfill project is involved in litigation. Result: In August 2000, MRC reached agreement to sell the Eagle Mountain Landfill to the Los Angeles County Sanitation Districts for $41 million. The agreement is subject to due diligence and the resolution of certain contingencies. Status: In September 2005, Kaiser and MRC received an adverse U.S. District Court decision in the federal land exchange litigation that may materially impact the viability of the project. The decision is being appealed to the 9th Circuit Court of Appeals. All scheduled briefing in the appeal was completed in 2007 and oral argument was held on December 6, 2007, before a three judge panel. While a decision may be announced at any time, the U.S. 9th Circuit Court of Appeals usually announces its decisions six to twelve months following oral argument. However, on occasion the announcement of a decision may take substantially longer. The initial closing on the sale to Los Angeles County Sanitation District continues to be delayed. Even with an initial closing, MRC will not receive any proceeds from the sale until the outstanding litigation is resolved in favor of Kaiser and MRC. If we are not successful in our appeal of the adverse lower court decision, the decision would jeopardize the viability of the landfill project and its sale to the Los Angeles County Sanitation District.

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