Victory Nickel Inc.

Victory Nickel Inc.

August 13, 2014 07:00 ET

Victory Nickel Enters Into Sales Contract for 20% of 7P Plant Frac Sand Production

First 50% of Frac Sand Sold on Spot Basis; Targeting Next 50% Under Contracts

TORONTO, ONTARIO--(Marketwired - Aug. 13, 2014) - Victory Nickel Inc. ("Victory Nickel" or the "Company") (TSX:NI) today announced that its wholly-owned subsidiary, Victory Silica Ltd. ("VSL"), has entered into a take-or-pay contract for approximately 20% of the 7P Plant production capacity and for its highest-volume quantities of 20/40 and 30/50 frac sand. The objective is to enter into similar agreements for an additional 30% of production capacity.

The Company's 7P Plant, with a nameplate capacity of 500,000 tons-per-annum of saleable frac sand is located approximately 18 kilometres south of Medicine Hat, Alberta and currently produces four grades of frac sand: 16/30, 20/40, 30/50 and 40/70. Until now the 7P Plant has operated with two crews, and all frac sand sales have been made on a spot basis. The signing of this first take-or-pay contract enables the addition of a third of four crews, and will increase the plant annualized run rate to 75% of full capacity, or 375,000 tons-per-annum. The Company's goal is to exit the third quarter with the 7P Plant operating at its full capacity of 500,000 tons per annum of saleable frac sand utilizing four crews on a 24-hour-per-day, seven-day-per week schedule.

"We believe that this agreement is confirmation of the acceptance of Victory Silica and its premium-quality frac sand products into the western Canadian markets," said René Galipeau, Vice-Chairman and CEO of Victory Nickel. "Ken Murdock, CEO of VSL, has always maintained that all we have to do is produce the best-quality frac sand and customers would soon recognize our marketing advantage. He is right."

About Victory Nickel

Victory Nickel Inc. is a Canadian company with four sulphide nickel deposits containing significant NI 43-101-compliant nickel resources and a significant frac sand resource at its Minago project. 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 has established a presence in the frac sand market prior to commencing frac sand production and sales from Minago.

Please visit the Company's website at Should you wish to receive Company news via email, please email and specify "Victory Nickel" in the subject line.

Forward-Looking Information: This news release contains certain forward-looking information. All information, other than information regarding historical fact, that addresses activities, events or developments that the Company believes, expects or anticipates will or may occur in the future is forward-looking information. Forward-looking information contained in this news release includes, but may not be limited to, the use of proceeds from the Offering, the Company's plans and expectations relating to future financings and the progress and success of the Company's projects, including the Company's goals and business plan with respect to the frac sand business and the future demand for frac sand. The forward-looking information contained in this news release reflects the current expectations, assumptions and/or beliefs of the Company based on information currently available to the Company. With respect to the forward-looking information contained in this news release, the Company has made assumptions regarding, among other things, the Company's future working capital requirements, the Company's ability to generate sufficient cash flow from operations and access existing credit facilities and capital markets to meet its future obligations, goals and business plan, future prices for frac sand and by-products and future demand for processed frac sand. The forward-looking information contained in this news release is subject to a number of risks and uncertainties that may cause actual results or events to differ materially from current expectations, including the inability of the Company to use the proceeds of the Offering as expected, the need to obtain required approvals and permits from regulatory authorities, the volatility of frac sand and by-product prices and demand and geological, technical, drilling and processing problems. Any forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable law, the Company disclaims any obligation to update or modify such forward-looking information, either because of new information, future events or for any other reason. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.

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