Black Diamond has secured a 36-month rental commitment with a major Canadian oil and gas company for a 418 person camp in the Horn River area of north eastern British Columbia. Slated for completion in October 2010, the first phase of the two phase project will feature 264 beds - with both executive and dorm-style accommodations, a state-of-the-art kitchen and modern recreation facilities.
The construction and installation contract value for phase one of the lodge is $9 million and the anticipated future development of phase two will represent approximately $4 million. Phase two will be completed by March, 2011.
The Cabin Lakes site is located at kilometer 39.5 Komie Road, in the remote Horn River Basin near Fort Nelson B.C., touted as the largest shale-based natural gas play in Canada. An increase in drilling and production activity in the region has resulted in a high demand for quality workforce accommodation.
Black Diamond currently owns and operates another fully-occupied lodge in the Horn River Basin which will undergo a 165-bed / 5 dorm expansion this spring, with completion slated for June 2010 and have a 36-month guaranteed rental term. The Horn River Lodge, located at kilometer 90 Komie Road, opened in the fourth quarter of 2008 and currently houses 518 workers. The $3.5 million expansion will bring the asset value of the lodge to $20 million.
The capital expenditure for these projects falls within the Company's planned $99 million of capex for 2010.
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