Sep 7 2015
Select Sands Corp is pleased to announce that land clearing is complete and the Company has requested USA-based contractors to submit bids for a test mining and processing at Sandtown project in Arkansas, USA. Company management will be meeting with various contractors during the week of September 14 to select the contractors to commence the work right away.
Test mining will include rock fracturing, crushing, and screening using a US based contract mining company which has experience producing similar products sold in oil & gas and industrial markets.
The Company is in advanced negotiations with various processing plant operators, in the area, to produce finished products (finer-mesh, high-purity "Ottawa White" sand of 40/70 and 100 meshes). The processing plants will be used on a rental and/or lease basis with little to no capital expenditure required. Test mining and third-party plants (on rental and/or lease basis) will lead to production start as early as the Q4 2015.
The Company is also preparing to drill test the remaining 60% of the property. As per recently completed report by Tetra Tech of Golden, Colorado, USA and Vancouver, BC, Canada, 40% of the Sandtown property contains 22 million tons of Indicated resources of silica sand with a pre-tax NPV valued at US $160 million (See June 10, 2015 News Release). Road building on the 60% of the property has begun and drilling commencement will be announced soon.
The Company has more than enough capital to achieve the milestones stated above.
Finer mesh, high-purity silica is in high demand in both industrial and energy markets. Major US silica sand producers have announced in their Q2 2015 Earnings calls that they are expanding their finer-mesh silica sand mines to meet the demands from both industries. Oil and gas companies are using 'high intensity completion' methods which use up to 10,000 tons of sand per well to get a 75 percent jump in cumulative oil production over 180 days for wells that used the enhanced completion methods.
The Company has closed the financing originally announced on July 15, 2015, cancelling the second tranche and raising gross proceeds of $2,690,000 or 6,725,000 Units in its non-brokered private placement. The Units at a price of $0.40 per Unit were comprised of one common share of the Company and one-half of a share purchase warrant, with a whole warrant exercisable to purchase a further common share of the Company at a price of $0.60 for a period of 3 years after closing.
"The Arkansas advantage of mining business friendly jurisdiction, proximity to major markets, and year- -around operation makes Sandtown a potential low-cost producer," commented Select Sands CEO Rasool Mohammad. "We look forward to drill testing the balance of Sandtown to further enhance the valuations of this asset."
Source: http://www.selectsandscorp.com/