Kangaroo Island Plantation Timbers (ASX:KPT) has received a second report confirming that a timber export facility is likely to be physically and economically feasible at its Smith Bay site on the northern coast of Kangaroo Island, South Australia.
The Smith Bay site is favoured over other sites because of its relative proximity to tree plantations, its location outside marine habitat protection zones and availability of large quantities of basalt rock from a crown reserve quarry.
In addition, the bathymetric report revealed that the seabed adjoining the company’s land has been dredged in the past to create a deep channel.
KPT plans to either to develop the export facility – ideally in conjunction with other timber owners on Kangaroo Island, or to sell land and timber to a party that is itself willing to complete the development of the export facility.
Discussions are underway with other Kangaroo Island timber owners about the best ownership and financial arrangements under which to develop a path to market for the Island’s timber.
It is also in discussions with several parties about the design, financing, construction and operation of any facility and with the South Australian Government about the steps needed to gain regulatory approval.
The FOB value of standing timber on Kangaroo Island is estimated at approximately $400 million, even at current depressed world timber prices, and is increasing through annual tree growth.
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