Victory Nickel Inc.
TSX : NI

Victory Nickel Inc.

January 09, 2015 13:30 ET

Victory Nickel Expands Its Wisconsin Frac Sand Supply Chain

Second Source of Supply and Transload Facility Enhance Flexibility in Meeting Customer Needs

TORONTO, ONTARIO--(Marketwired - Jan. 9, 2015) - Victory Nickel Inc. ("Victory Nickel" or the "Company") (TSX:NI) today announced that it has contracted with a second Jordan formation Wisconsin-based supplier of washed concentrated Northern White frac sand and a second transload facility in St. Paul Minnesota.

"Having a second sand supplier in Wisconsin and transload capability north of our existing transload facility in Winona, Minnesota is just good business," said Ken Murdock, CEO of 100%-owned subsidiary Victory Silica Ltd. ("Victory Silica"). "We are maintaining the sand-supply contract with the Wisconsin-based supplier and transload facility in Winona, Minnesota that we have been using since start-up of the Seven Persons frac sand plant (the "7P Plant") near Medicine Hat, Alberta. However the rail line between Winona and St. Paul is apparently CP's busiest section in North America and as a result is subject to congestion; our St. Paul transload facility enables us to bypass that section of railway when necessary to ensure delivery of sand concentrate for processing at the 7P Plant. We believe it is always prudent to have alternatives that provide flexibility in our supply chain to fulfil our mandate of providing our customers with the best quality frac sand when and where it is needed."

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 plays in Canada and the US rise to prominence.

About Victory Silica Ltd.

Victory Silica is a wholly-owned subsidiary of the Company with a phased plan to establish itself in the frac sand market. In Phase 1, Victory Silica began sales in 2014 of premium quality Midwestern White frac sand from the 7P Plant 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 US$25 per ton of frac sand sold, Victory Silica 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 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 www.victorynickel.ca. Should you wish to receive Company news via email, please email cathy@chfir.com and specify "Victory Nickel" in the subject line.

Forward-Looking Information: This news release contains forward-looking information. All statements, other than statements of historic fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future constitute forward-looking information. This forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company. Forward-looking information is subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: uncertainty of estimates of capital and operating costs, production estimates and estimated economic return; the possibility that actual circumstances will differ from estimates and assumptions; uncertainties relating to the availability and costs of financing needed in the future; failure to establish estimated mineral resources; fluctuations in commodity prices and currency exchange rates; inflation; recoveries being less than those indicated by the testwork carried out to date (there can be no assurance that recoveries in small scale laboratory tests will be duplicated in large tests under on-site conditions or during production); changes in equity markets; operating performance of facilities; environmental and safety risks; delays in obtaining or failure to obtain necessary permits and approvals from government authorities; unavailability of plant, equipment or labour; inability to retain key management and personnel; changes to regulations or policies affecting the Company's activities; the uncertainties involved in interpreting geological data; and the other risks disclosed under the heading "Risk Factors" and elsewhere in the Company's annual information form dated March 31, 2014 filed on SEDAR at www.sedar.com. Forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. 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.

Contact Information

  • Victory Nickel Inc.
    Rene Galipeau or Sean Stokes
    416.363.8527
    416.626.0890 (FAX)
    admin@victorynickel.ca

    Victory Silica Ltd.
    Ken Murdock
    403.899.0141

    CHF Investor Relations
    Cathy Hume
    416.868.1079
    416.868.6198 (FAX)
    cathy@chfir.com