Blood Tribe Agricultural Project – Update Summer (2017)July 17, 2017
Roy Fox – UpdateMay 17, 2018
Blood Tribe Agricultural Project (1991) (BTAP)
Update Spring 2018
General Manager Report
Oki, I extend greetings on behalf of the Board of Directors and staff BTAP. As we look forward to another growing season we also need to look back at the previous year that was. The 2017 crop year blessed us with great weather and produced above average crops, as this report progresses the various Division Supervisors will summarize their operations.
BTAP Agriculture Asset Review
We have stabilized the company through a cash management plan and have done a thorough review of all operations and related costs to effect additional cost efficiencies and sound business plans. The Board approved a Strategic Plan that would address; Critical Issues.
Action Plan 2017/18
- Pay off debt and transfer Blood Band Ranch out of BTAP.
- Complete wind-up of custom farming operation and initiate sale of surplus equipment (approx. $1.5 million).
- Develop custom forage harvest operation for Blood Tribe Forage.
- Finalize accounting/reporting systems for all BTAP entities and implement cash flow forecasting and cash management systems.
- Execute contracts for new hay storage shed (6,000 MT) and Lateral A pivot refurbishment (total estimated cost - $2,000,000).
- Finalize bank participation – increase current hay shed loan from $2 to $3 million, extend amortization of shed loan and add $1.5 million bump to line of credit to cash flow sale of equipment.
- Rationalize management, maintenance and operations costs at AOHKII (BTIM) and initiate phase-in (3 years) of original “irrigation mall” model:
Pivot Placement Reserve
Pivot Maintenance Reserve
New Capital Investment
Dividend to Tribe
Allocation per Acre
1. Current Financial Situation:
2017/18 Financial Update
2. Core Business – Pivots and Infrastructure Assets (canal etc.) are deteriorating, historically capital assets were “spent” to provide operating cash flow.
- Province of Alberta funded study to assess off-farm assets (canal and reservoir) and dam safety. Negotiations to include BTAP in Irrigation District Rehabilitation funding (Provincial) on-going.
- BTAP initiating six (6) year refurbishment plan on pivots/pumps starting summer of 2018. Total estimated cost:
3. Land Tenure – Rectify default position, extend Headlease. Council appointed a Negotiating Team to engage with AANDC to resolve matter.
- Tribe/INAC have agreed to extend the BTAP Agriculture Lease – Term to be determined. BTAP will pay fair market value dryland rental rate to Receiver General
- End-use subleases will be for five (5) years – BTAP will reserve right to supply inputs/services and to aggregate/purchase production.
- Longer end-user terms will encourage end-users to invest in high value crop cycles (increased rent), allow Tribe to develop agri-business value chain, and allow BTAP to monetize the leasehold interests (secure capital).
Update Corporate Structure
Modernizing the corporate structure to become more streamlined was accomplished, in short, the 12 companies (6 Newco and 6 Leasco) that were required in building the project have been wound up and Aohkii (2018) Ltd has been established. The 12 companies were required for the 6 phases of BTAP and held assets (pivots, pumps etc.). These assets were transferred to Aohkii (2018) Ltd.
BTAP (1991) holds the Headlease ➔ subleases to Aohkii (2018) Ltd ➔ Enduser sublease to Lessees
Action Plan 2018/19
- Complete new hay shed for 2018 crop year.
- Finish Lateral “A” pivot refurbishment for 2018 crop year.
- Sell surplus equipment (approx. $1.5 million)
- Implement custom forage harvesting operation at BTFP.
- Manage/harvest approx. 4,000 acres of BTFP forage (16-18,000 MT).
- Purchase 12-14,000 MT of export forage from other BTAP forage growers.
- Store, process for export (27,000MT)
- Create JV with Olds AG Tech to market hay – transition to full marketing operation.
- Continue deficit recovery.
All Enduser Sublease Contracts have been finalized for the 2018 crop year, BTAP has put emphasis on attracting new Lessees. We are happy to welcome these new producers, one in particular, Mr. Stu Healy of the Blood Tribe. We wish all the best in the upcoming year.
In closing, I am proud of the group effort of those involved in the road to recovery of the Blood Tribe Agricultural Project, to Co-Management for their dedication, to the Board for their vision, PM Associates for their advice, the Elders for their prayers and the staff for their continued hard work.
Blood Tribe Agricultural Project (1991)