Select Sands Exercises Purchase Option to Begin Capacity Expansion
April 10 2018 - 8:31AM
Project anticipated to be completed in 2H
2018
Select Sands Corp. ("Select Sands" or the "Company") (TSXV:SNS)
(OTCQX:SLSDF) is pleased to announce the Company has exercised its
option to purchase a 223-acre property located in Independence
County, Arkansas (the “Independence Property”) to serve as a
platform to support the Company’s long-term operational and
capacity expansion initiatives. Under the terms of a revised
US$1,630,000 purchase agreement, the Company has paid
US$250,000 and is obligated to make four additional annual
payments of US $345,000 on April 4 each year plus 2% annual
interest each year through 2022 in an owner financed
arrangement. Once the expansion project is completed, Select
Sands’ annual production capacity of industrial silica will
increase by approximately 400,000 tons or 67% from 600,000 tons to
approximately 1 million tons per year.
The Company plans to immediately build a new stand-alone 400,000
ton per annum production facility comprising of both wet and dry
processing capability to be located on the Independence Property
(the “expansion project”) and is anticipated to be completed in the
second half of 2018. The expansion project estimated cost of
$4.0 million to $4.5 million is anticipated to be funded through
bank financing and is expected to significantly reduce production
costs primarily through interplant transport savings. The decision
to build a new 400,000-ton facility is a change in the Company’s
plans. Originally, Select Sands had planned to simply increase the
existing 600,000-ton facility to 1 million tons. The Company
has determined that building a new stand-alone 400,000-ton facility
with the additional greenfield startup tasks will be more cost
effective and profitable for the Company but will delay ramping up
production to 1 million tons per annum by one or two quarters from
its original plan.
Advantage Highlights of the Independence
Property:
- Sufficient acreage to complete the current expansion, with
additional acreage available for future expansion of a new-build
facility;
- Well suited for a future potential build of a 110-150 railcar
loop track for efficient and economical loading of finished
products;
- Elevated above the floodplain allowing for uninterrupted
operations;
- Access to natural gas, three-phase electricity and water;
and
- Located next to a large coal power plant and adjacent to state
highway
Zig Vitols, President of Select Sands states, “We are very
pleased to move forward on this project to meet the growing demand
of our expanding customer base. The location of the Independence
Property will further enhance current operations as it will reduce
interplant transportation by up to 30 miles, with the associated
lower operating cost. This demand driven expansion project
complements the continuous quarter over quarter price increases
being experienced.”
One of more follow-up press releases on the expansion project
will be issued once the start date is determined and bank financing
has been completed.
For further details of the property option agreement, please
refer to the press release issued October 29, 2017.
About Select Sands Corp.Select
Sands Corporation is an industrial silica product company which
owns a number of properties in Arkansas and is currently in
production at its 100% owned, 520-acre Northern White, Tier-1,
silica sands property located near Sandtown, Arkansas, U.S.A.
Select Sands’ goal is to become a key supplier of premium
industrial silica sand and frac sand to North American markets.
Select Sands’ Arkansas properties have a significant logistical
advantage of being significantly closer to oil and gas markets
located in Oklahoma, Texas and Louisiana than sources of similar
sands from the Wisconsin area.
Forward-Looking Statements
This news release includes forward-looking
information and statements, which may include, but are not limited
to, information and statements regarding or inferring the future
business, operations, financial performance, prospects, and other
plans, intentions, expectations, estimates, and beliefs of the
Company. Information and statements which are not purely
historical fact are forward-looking statements. The forward-looking
statements in this press release relate to the timing of capacity
expansion and the impact such expansion will have on the Company's
operating results. Forward-looking information and statements
involve and are subject to assumptions and known and unknown risks,
uncertainties, and other factors which may cause actual events,
results, performance, or achievements of the Company to be
materially different from future events, results, performance, and
achievements expressed or implied by forward-looking information
and statements herein. Although the Company believes that any
forward-looking information and statements herein are reasonable,
in light of the use of assumptions and the significant risks and
uncertainties inherent in such information and statements, there
can be no assurance that any such forward-looking information and
statements will prove to be accurate, and accordingly readers are
advised to rely on their own evaluation of such risks and
uncertainties and should not place undue reliance upon such
forward-looking information and statements. Any forward-looking
information and statements herein are made as of the date hereof,
and except as required by applicable laws, the Company assumes no
obligation and disclaims any intention to update or revise any
forward-looking information and statements herein or to update the
reasons that actual events or results could or do differ from those
projected in any forward-looking information and statements herein,
whether as a result of new information, future events or results,
or otherwise, except as required by applicable laws.
For more information about Select Sands Corp., please visit
www.selectsands.com or contact:
Zigurds VitolsPresident & CEOPhone: (832) 917-6140
Investor Relations
Arlen Hansen
SNS@kincommunications.com
Phone: (604) 684-6730
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
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