VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug. 23, 2016) - Select Sands Corp. ("Select Sands" or the "Company") (TSX VENTURE:SNS)(OTC:CLICF) is pleased to announce that it has entered into an asset purchase agreement (APA) whereby Select Sands will buy certain assets of Tutle Holdings. The assets to be acquired include a permitted and producing wet processing plant, equipment and related assets, all nearby its Sandtown silica sands deposit in Arkansas, USA.
In consideration of the sale and transfer of the assets, Select Sands will pay Tutle US $475,000 in cash and US $75,000 in Select Sands common shares for a total purchase price of US $550,000. The number of common shares will be calculated by dividing US $75,000 by the 20-day volume weighted average price of Select Sands' common shares on the TSX Venture Exchange with Canadian dollars converted to U.S. dollars at the noon rate of Exchange for Cdn/U.S. dollars on the closing date as posted on the Bank of Canada's website.
Completion of the transaction is subject to receipt of the approval of the TSX Venture Exchange.
In June 2015, Tetra Tech completed a mineral resource estimate and preliminary economic assessment (PEA) report which concluded the initial capital cost for a processing facility to produce Tier 1 sand from the Sandtown deposit was estimated to be US $42.3MM, of which the wet processing plant costs were estimated to be US $11.47MM.
Tutle Holdings, (Tutle & Tutle Trucking), who owns the plant, is the largest frac sand trucking company in the United States providing "last mile trucking" to the wellhead in all major oil and gas markets in the United States. Paul Tutle, CEO of Tutle Holdings comments: "We are pleased to complete this initial transaction with Select Sands and to take a small equity position in the company. We expect the company will quickly become a player in the market and look forward to working with Select Sands in the future."
Select Sands President & CEO Rasool Mohammad commented: "This acquisition is expected to lower production costs of our 40/70 and 100 mesh silica sand products and better position the Company to service the growing demand in the oil and gas markets. We are very pleased to be working with Tutle, a well-respected company, which is additionally positioned to benefit from marketing and growing our customer base for our tier 1 Northern White silica sand products."
The wet processing plant is currently being contracted by Select Sands to produce Northern White 40/70 and 100 mesh silica sand products with daily capacity of 1,500 tons per day. The wet processing plant includes feed hopper, conveyor, classifiers, cyclones, and control building and is optimized to increase its daily capacity at minimal cost as needed.
Select Sands continues to seek additional opportunities in the region to secure strategic assets that will continue to optimize production and capture the intrinsic value of the Sandtown deposit for its shareholders.
Mark Horan, P.Eng. of Tetra Tech, a Qualified Person as defined by National Instrument 43-101, has reviewed and approved the scientific and technical disclosure in this News Release.
About Select Sands Corp.
Select Sands' Sandtown property, located in northeast Arkansas, USA, is underlain by the Ordovician St. Peter sandstone formation, which is a major source of 'Ottawa White' Tier-1 frac sand/industrial sand selling into major US oil and gas basins as well as industrial and specialty end markets. The Sandtown property is located 3.1 miles from Highway 167 near a natural gas pipeline. The property has an active power line on the property and is located approximately 14.7 miles from the nearest rail system (see Select Sands December 4, 2014 News Release). Compared to competitive sand mines located in Wisconsin owned by the largest US frac sand producers, Sandtown has a competitive location advantage as it is approximately 650 rail miles closer to the Texas/Louisiana oil/gas plays as well as the Houston port and industrial hub.
As per the June 2015 PEA report by Tetra Tech of Golden, Colorado, USA and Vancouver, BC, Canada, the Sandtown property has a pre-tax net present value of US $160 million and a post-tax net present value of US$92 million. The PEA was completed on a portion of the current silica sand mineral resources (see the Select Sands' June 10, 2015 News Release). Select Sands would like to remind investors that mineral resources for the Sandtown Property are not mineral reserves and do not have demonstrated economic viability and there is no certainty that this PEA will be realized. Subsequent to the completion of the 2015 PEA, Select Sands announced an updated mineral resource estimate for the Sandtown property totaling 41.98 Million Tons of Indicated silica sand mineral resources (see the Select Sands February 10, 2016 news release).
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. Such statements include statements regarding the ability to satisfy the conditions necessary to complete the proposed transaction and statements regarding the targets and future exploration on the Company's properties. Information and statements which are not purely historical fact are forward-looking statements. 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.selectsandscorp.com.
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.