The Project Goal is to relocate from an industrial park to near a former mining operation. DBCC hopes to use methane leaking from abandoned coal mines in the region to power the new facility.
DBCC’s mission is to have four positive impacts on the Western Slope Region: increase water resilience; slow greenhouse gas emissions; create quality job opportunities; produce healthy profits. DBCC has identified two main product markets including clay products and greenhouse gas management.
DBCC’s clay products market includes growing populations in Colorado and Utah, as well as northern portions of New Mexico, and Arizona. Target customers are homeowners, contractors, and architects that are involved in building new homes or remodeling existing units DBCC is building an online presence to drive sales and complement existing relationships.
Greenhouse gas management has the potential to grow into a multibillion-dollar industry in the coming decades. This will primarily be done through carbon offset markets where tax credits are bought and sold. DBCC will monetize greenhouse gas management through these carbon offsets. These offsets are generated through waste methane, the principal component of coal gas and a potent climate pollutant. There are multiple carbon offset markets that pay per ton of greenhouse gas that is offset. One of the more well-known markets is the California Cap and Trade Program which will pay approximately $12 per ton of offset greenhouse gasses.
There are billions of tons of greenhouse gasses emitted every year that can potentially be captured and converted; this in turn creates the greenhouse gas management industry’s multibillion-dollar potential. DBCC is positioned to take advantage of this relatively new market opportunity by plugging a mining site, capturing, and then burning the gas to create an additional revenue stream.
ROI and Initial Conditions
The DBCC offers two investment opportunities. The first opportunity is in the production of brick and tile. This business will enjoy healthy growth as it expands its capacity and market. It expects to reach a market value to be determined at the time of investment. In order to progress, it must purchase equipment and secure a line of working capital. The brick and tile business is seeking a capital raise of $1,000,000-$1,500,000, depending on which mine site is selected. If this capital is made available in the form of an OZ investment a preferred return of 5% will be provided along with interest to be negotiated in DBCC subject to final conditions and terms. DBCC’s long-term objective is greenhouse gas management. A second opportunity focuses on the desire of DBCC to use former mine-generated methane, which is currently fouling the region’s environment. As described earlier, the capture of this methane will establish a cap and credit market with a long-term objective of greenhouse gas management. It is possible that DBCC will work with an investment partner to align both opportunities, establishing a much larger market opportunity and return on investment.
Financial Overview
DBCC has a defined business plan to guide growth, new facility development, and market strategies. This includes expansion into the carbon capture and offset markets and innovation in clay products that will drive future revenue growth. DBCC projects that it will be cash-flow positive after one full year and has been operating since January of 2020. Revenues from clay products for 2020 are projected at approximately $4,000 per month, though DBCC did not experience significant sales until June 2020. In 2021, revenues from sales of clay products are projected at nearly $250,000.
OPPORTUNITY TYPE
Investor partner: DBCC is an innovative company that solves multiple environmental challenges and delivers a high-quality consumer product. Product and manufacturing process innovation is a strength of DBCC. The company is seeking a partner with business skills to complement existing manufacturing strengths. Ideally, an Investor partner will provide strong business acumen including financial resource and market development. It is anticipated that an investor would also bring equity to help DBCC scale. An investor/partner will receive an ownership stake in DBCC and is expected to help drive sales, revenue growth, and diversification into new markets.
Key parties include DBCC ownership, Delta County, the Town of Paonia, coal operators, as well as state and federal regulatory bodies. Two of the key components for business expansion include access to Paonia Reservoir (which has been secured) and proximity/access to an abandoned mine for the resources needed to produce tile (multiple possibilities exist). Access to a coal mine and use of Paonia Reservoir requires permitting from federal and state regulatory agencies as well as approval from local governments. DBCC has good working relationships with Delta County and the Town of Paonia, which is near where it would like to build a new facility. DBCC is also presently extracting silt from Paonia Reservoir. The next step includes securing a site near a mine and continuing to maintain positive relationships with key parties.
- DBCC Ownership – Responsible for daily operations and production of clay products and carbon capture
- Delta County – May be able to assist with zoning and may provide some incentives to promote development of the new DBCC factory.
- Town of Paonia – May play a role in development approval for DBCC’s new factory and may be a future customer of tile products to build new sidewalks. The town could apply for a grant in partnership with DBCC to fund new sidewalk construction with DBCC products.
- Coal Operators – Cooperation of coal operators is needed to secure a former mine site to access methane. This likely requires the operator to sell the future site of DBCC’s new factory. Old mine sites often require remediation and responsibility for remediation needs to be determined when the site is sold.
- Regulatory bodies – Permitting is required to extract methane from former mine sites as well as sediment from Paonia Reservoir. Cooperation with regulatory bodies will be required to ensure these permits are secured and DBCC has access to the natural resources needed for business operation and production.
