Victory Nickel Inc. ("Victory Nickel" or the "Company") today announced that the first nine-railcar shipment of washed, concentrated sand from Winona, MN has arrived, been unloaded and moved to the Company's Seven Persons frac sand plant (the "7P Plant") near Medicine Hat, Alberta for initial plant commissioning.
Two additional railcar lots are in transit to Alberta and the Company expects it will soon be in a continuous-supply mode with delivered tonnages of sand increasing as full production is achieved at the 500,000 ton-per-year 7P Plant.
"This is what we have all been working so hard towards," said Ken Murdock, Victory Silica's CEO. "The 7P Plant will be commissioned this week. The Company is building inventories of both wet concentrated sand and finished product at the 7P Plant to ensure availability of premium-quality Wisconsin frac sand to meet customer needs. The 22,000 tons of dry storage capacity at the 7P plant ensures that we will have premium-quality frac sand available where our customers want it when they need it."
About Frac Sand
Frac sand is a proppant used in the oil and gas business as a part of the hydraulic fracturing process - a means of increasing flow to the wellhead. Frac sand must have particular characteristics including achieving certain levels of crush resistance, sphericity and roundness, and it is therefore a relatively rare commodity. Vast quantities of frac sand are consumed, and more is needed all the time, as shale gas and oil plays in Canada and the US rise to prominence.
About Victory Silica Ltd.
Victory Silica is a wholly-owned subsidiary of the Company and is charged with a phased plan to establish the Company in the frac sand market. In Phase 1, the Company plans to begin sales in 2014 of premium quality Midwestern White frac sand from the 7P Plant in Seven Persons, Alberta near Medicine Hat by shipping partially-processed sand purchased in Wisconsin to the 7P Plant for final processing and distribution. The 7P Plant is well located in an area populated with fracking companies, its potential customers, and is within only a few hours' trucking distance of major oil play well sites. Phase 2, which includes the construction of a concentrator in Wisconsin, will reduce costs and assure security of sand supply through the control of a frac sand mine in Wisconsin. In Phase 3, Victory Silica has identified a site in Winnipeg, Manitoba, where it plans to build a larger frac sand plant to process and distribute both imported and domestic sands, including sand mined as a co-product of development of a nickel mine at the Company's 100%-owned Minago project in Manitoba. With margins expected to be in excess of $25 per ton of frac sand sold, the Company should generate sufficient cash flow in Phases 1 and 2 to provide the financial flexibility to expand its activities by developing a second plant as Phase 3 of its growth plan.
About Victory Nickel
Victory Nickel Inc. is a Canadian company with four sulphide nickel deposits containing significant NI 43-101-compliant nickel resources. Victory Nickel is focused on becoming a mid-tier nickel producer by developing its existing properties, Minago, Mel and Lynn Lake in Manitoba, and Lac Rocher in northwestern Québec, and by evaluating opportunities to expand its nickel asset base. Through a wholly-owned subsidiary, Victory Silica Ltd., Victory Nickel is establishing a presence in the frac sand market prior to commencing frac sand production and sales from Minago.
Please visit the Company's website at www.victorynickel.ca. Should you wish to receive Company news via email, please email [email protected] and specify "Victory Nickel" in the subject line.