Pan Pacific Aggregates

Acquisitive Canadian quarrying company Pan Pacific Aggregates is targeting 500,000 tonnes of initial annual output as it heads to profit.

The AIM-quoted company, headed by financier and former English China Clay luminary William Voaden, is poised to make several local acquisitions as it seeks to capitalise on a major infrastructure building programme in its home province of British Columbia. Pan Pacific, which lost £1m in the first half of last year, now has £1m in the bank and, suggests Voaden, could generate £2.6m this year from its Quadling Quarry, which opened last month.

The group, which has been beefing up its operational team, sees a five-to-seven year life in Quadling as it is, but hopes to extend that with further development to as long as 30 years. Pacific-facing British Columbia is benefiting from the economic transformation in China, which could also provide opportunities for Pan Pacific, whose imminent full-year figures should reveal positive cash flow and an improved balance sheet.

Voaden and his colleagues have had to grapple with bitter opposition from previous local partners, but the company is now almost free from litigation and says the municipal authorities are being supportive. Floated five years ago at 88p, the shares collapsed to 0.25p before the local disputes came near to resolution and Voaden took charge, but have perked up to 0.73p since Growth Company Investor highlighted their speculative potential at 0.68p in November.

Any acquisition is likely to involve a fund raising, but Pan Pacific is re-establishing its credibility and stands a good chance to thrive. Investors who are comfortable with a degree of risk should consider increasing their holdings.