Energy Surcharge Policy

Dear Valued Customer:

As you probably know, the price of natural gas is a significant component to our mining process and has a substantial impact on the production expenses at our plants.

To address major fluctuations in natural gas costs, we have updated our Energy Surcharge Program. An Energy Surcharge may appear as a separate line on your invoice, depending on the average price of natural gas.

Our primary kiln fuel source is natural gas, which is delivered to our plants via pipeline. These pipelines access gas from multiple distribution points. The price that EP Minerals pays for gas varies day to day based on supply and demand at these distribution points. We calculate a monthly weighted average based on 33.33% share from each daily gas index (Sumas, Opal, Nymex/Henry Hub). The natural gas situation is such that we will charge an Energy Surcharge when the average price exceeds $4.40/DTh in any given month.

NOTE: The monthly natural gas average price for November, 2018 was $6.70.

If the average natural gas price drops below $4.40/DTh for any given month, there will be no energy surcharge on shipments made in the following month. We will provide you with the specific plant information and the related natural gas pricing in the charts below and will update that information monthly.

The Energy Surcharge will be applicable to all products and calculated based upon the plant where your products are produced and shipped.

Vale and Lovelock Plants:
Monthly Natural Gas Average ($/DTh) ESC ($7/ST) ESC ($/MT) ESC (EUR/MT)
4.40 - 5.39 7 7.71 5.63
5.40 - 6.39 14 15.42 11.26
6.40 - 7.39 21 23.13 16.88
7.40 - 8.39 28 30.84 22.51
8.40 - 9.39 35 38.55 28.14
9.40 - 10.39 42 46.26 33.77
10.40 - 11.39 49 53.97 39.39
11.40 - 12.39 56 61.68 45.02
12.40 - 13.39 63 69.39 50.65
13.40 - 14.39 70 77.1 56.28
14.40 - 15.39 77 84.81 61.91
15.40 - 16.39 84 92.52 67.53
16.40 - 17.39 91 100.23 73.16
Clark Plant:
Monthly Natural Gas Average ($/DTh) ESC ($4/ST) ESC ($/MT) ESC (EUR/MT)
4.40 - 5.39 4 4.41 3.22
5.40 - 6.39 8 8.82 6.44
6.40 - 7.39 12 13.23 9.66
7.40 - 8.39 16 17.64 12.88
8.40 - 9.39 20 22.05 16.1
9.40 - 10.39 24 26.46 19.32
10.40 - 11.39 28 30.87 22.54
11.40 - 12.39 32 35.28 25.76
12.40 - 13.39 36 39.69 28.98
13.40 - 14.39 40 44.1 32.2
14.40 - 15.39 44 48.51 35.42
15.40 - 16.39 48 52.92 38.64
16.40 - 17.39 52 57.33 41.86

Daily Natural Gas Pricing for Sumas, Opal and Nymex: (updated weekly with pricing for each distribution center and the Energy Surcharge daily average pricing.)

January Daily Natural Gas Pricing
Date Sumas Opal Nymex ESC Average (33.3% Sumas, 33.3% Opal, 33.3% Nymex)
01/01/2019 3.92 3.75 3.25 3.60
01/02/2019 3.92 3.75 3.25 3.60
01/03/2019 3.69 3.74 2.82 3.38
01/04/2019 3.77 3.73 2.72 3.37
01/05/2019 3.25 3.25 2.80 3.07
01/06/2019 3.25 3.25 2.80 3.07
01/07/2019 3.25 3.25 2.80 3.07
01/08/2019 3.12 3.09 2.74 2.95
01/09/2019 3.05 3.11 2.89 2.99
01/10/2019 2.91 2.96 2.92 2.90
01/11/2019 2.95 2.88 2.95 2.90
01/12/2019 3.03 2.97 2.89 2.93
01/13/2019 3.03 2.97 2.89 2.93
01/14/2019 3.03 2.97 2.89 2.93
01/15/2019
01/16/2019
01/17/2019
01/18/2019
01/19/2019
01/20/2019
01/21/2019
01/22/2019
01/23/2019
01/24/2019
01/25/2019
01/26/2019
01/27/2019
01/28/2019
01/29/2019
01/30/2019
01/31/2019
Average 3.303.26 2.90 3.12
December Daily Natural Gas Pricing
Date Sumas Opal Nymex ESC Average (33.3% Sumas, 33.3% Opal, 33.3% Nymex)
12/01/2018 10.68 6.77 4.61 7.28
12/02/2018 10.68 6.77 4.61 7.28
12/03/2018 10.68 6.77 4.61 7.28
12/04/2018 9.03 6.89 4.40 6.71
12/05/2018 8.22 6.88 4.70 6.53
12/06/2018 6.81 6.26 4.69 5.86
12/07/2018 9.29 6.65 4.44 6.72
12/08/2018 7.42 5.85 4.51 5.87
12/09/2018 7.42 5.85 4.51 5.87
12/10/2018 7.42 5.85 4.51 5.87
12/11/2018 5.50 5.39 4.54 5.09
12/12/2018 4.87 4.80 4.53 4.69
12/13/2018 5.40 4.10 4.28 4.55
12/14/2018 5.75 4.25 4.31 4.72
12/15/2018 5.15 3.75 3.99 4.25
12/16/2018 5.15 3.75 3.99 4.25
12/17/2018 5.15 3.75 3.99 4.94
12/18/2018 4.10 4.15 3.80 3.98
12/19/2018 3.95 4.03 3.70 3.85
12/20/2018 4.30 3.74 3.64 3.85
12/21/2018 4.03 3.74 3.70 3.79
12/22/2018 3.89 3.68 3.55 3.67
12/23/2018 3.8 9 3.68 3.55 3.67
12/24/2018 3.8 9 3.68 3.55 3.67
12/25/2018 3.8 9 3.68 3.55 3.67
12/26/2018 3.8 9 3.68 3.55 3.67
12/27/2018 5.21 4.18 3.42 4.23
12/28/2018 4.03 3.72 3.10 3.58
12/29/2018 3.92 3.75 3.25 3.60
12/30/2018 3.92 3.75 3.25 3.60
12/31/2018 3.92 3.75 3.25 3.60
Average 5.85 4.78 4.00 4.83

We at EP Minerals thank you for your business and support and look forward to continuing to work with you.

Al Kaczanowski
Vice President of Global Sales & Marketing
EP Minerals