FORM 10-K
41
MDU RESOURCES G ROUP, INC.
Topography associated with the hard rock reserves is typically much more diverse. Therefore, using available data, a final topography map is
created and computer software is utilized to compute the volumes between the existing and final topographies. Volumes are then converted
to tons by using an appropriate conversion factor. Typically, 2 tons per cubic yard in the ground is used for hard rock quarries.
Estimated reserves are probable reserves as defined in Securities Act Industry Guide 7. Remaining reserves are based on estimates of
volumes that can be economically extracted and sold to meet current market and product applications. The reserve estimates include only
salable tonnage and thus exclude waste materials that are generated in the crushing and processing phases of the operation. Approximately
1.1 billion tons of the 1.2 billion tons of aggregate reserves are permitted reserves. The remaining reserves are on properties that are
expected to be permitted for mining under current regulatory requirements. The data used to calculate the remaining reserves may require
revisions in the future to account for changes in customer requirements and unknown geological occurrences. The years remaining were
calculated by dividing remaining reserves by current-year sales. Actual useful lives of these reserves will be subject to, among other things,
fluctuations in customer demand, customer specifications, geological conditions and changes in mining plans.
The following table sets forth details applicable to the Company's aggregate reserves under ownership or lease as of December 31, 2007,
and sales for the years ended December 31, 2007, 2006 and 2005:
Number of Sites
Number of Sites
Estimated
Reserve
__(____hed __one)__
Crus___ St___
__(Sand &_Grav____
______ ___el)
_____________ons ___d _000'___________
T___ Sol _ ( ___ s)
Reserves
Lease
Life
Production Area
owned
leased
owned
leased
2007
2006
2005
(000's tons)
Expiration
(years)
Central MN
--
1
49
52
2,639
4,834
4,608
90,833
2008-2028
34
Portland, OR
1
4
5
3
5,372
5,862
5,559
255,034
2008-2055
47
Northern CA
1
--
7
2
2,534
3,031
4,180
53,106
2046
21
Southwest OR
4
7
12
5
3,686
4,425
3,892
110,332
2008-2031
30
Eugene, OR
3
3
4
2
2,007
3,026
2,009
174,989
2008-2046
87
Hawaii
--
6
--
--
3,081
3,167
2,891
68,031
2011-2037
22
Central MT
--
--
5
1
2,424
2,619
2,408
40,068
2023
17
Anchorage, AK
--
--
1
--
1,118
1,142
1,307
19,712
N/A
18
Northwest MT
--
--
8
5
1,318
1,434
1,679
24,161
2008-2020
18
Southern CA
--
2
--
--
69
244
166
95,330
2035
Over 100
Bend, OR/WA/
Boise, ID
2
2
5
3
2,652
1,788
1,731
103,354
2010-2012
39
Northern MN
2
--
19
17
753
520
968
30,802
2008-2016
41
Northern IA/
Southern MN
18
10
8
27
1,592
2,024
2,063
65,423
2008-2017
41
ND/SD
--
--
2
35
943
1,157
1,205
43,247
2008-2031
46
Eastern TX
1
2
1
4
1,290
917
1,255
26,969
2008-2012
21
Casper, WY
--
--
--
2
116
5
2
13,862
2008
Over 100
Sales from
other sources
5,318
9,405
11,281
--
36,912
45,600
47,204
1,215,253
The 1.2 billion tons of estimated aggregate reserves at December 31, 2007, is comprised of 509 million tons that are owned and 706 million
tons that are leased. Approximately 49 percent of the tons under lease have lease expiration dates of 20 years or more. The weighted
average years remaining on all leases containing estimated probable aggregate reserves is approximately 19 years, including options for
renewal that are at Knife River's discretion. Based on 2007 sales from leased reserves, the average time necessary to produce remaining
aggregate reserves from such leases is approximately 47 years. Some sites have leases that expire prior to the exhaustion of the estimated
reserves. The estimated reserve life assumes, based on Knife River's experience, that leases will be renewed to allow sufficient time to fully
recover these reserves.
