Victory Nickel Inc.

Victory Nickel Inc.

October 02, 2014 07:00 ET

Victory Nickel Options Wisconsin Frac Sand Property

Deal adds ownership of premium Wisconsin frac sand to existing Manitoba frac sand resource

TORONTO, ONTARIO--(Marketwired - Oct. 2, 2014) - Victory Nickel Inc. ("Victory Nickel" or the "Company") (TSX:NI) today announced it has entered into an option to acquire a 100% interest in a land package totalling over 300 acres in south western Wisconsin, USA. The Company is specifically targeting a 100 acre ridge which has been determined to contain one of the highest quality frac sand deposits in North America. This is a Jordan formation sandstone located close to road and rail transportation links. Typically, 40 acres of ridge contains 8,000,000 tons of sandstone. The Company expects to realize 4,000,000 tons of coarse high-quality Jordan formation sand from each forty-acre parcel.

The option agreement provides for a cash payment on signing of the agreement, a second cash payment on delivery of permits and a third cash payment on exercise of the option. The option is valid for six months with two equivalent extensions available under certain circumstances. Prior to production the Company will be required to pay US$40,000 per annum as advance royalties on the initial 20,000 tons of sand production. Once the property is in production, the Company will be required to pay a royalty of US$2.00 per ton of frac sand sold from the property.

"This agreement establishes Victory Nickel as a property owner in what is recognized as one of the best quality frac sand producing areas in the world," said Ken Murdock, CEO of Victory Nickel's 100%-owned subsidiary Victory Silica Ltd. "We have now secured a supply of premium-quality Wisconsin frac sand and continue to actively pursue Phase 2 of our business plan which includes the finalization of joint venture partnerships to combine this property with other known high-quality deposits of Northern White frac sand."

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 is establishing a presence in the frac sand market prior to commencing frac sand production and sales from Minago.

About Victory Silica Ltd.

Victory Silica Ltd. is a wholly-owned subsidiary of Victory Nickel and is charged with a phased plan to establish the Company in the frac sand market. In Phase 1, the Company constructed a 500,000 ton per annum dry processing plant and has begun processing and selling sand imported from Wisconsin. 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 or gas play well sites. Phase 2, which includes the construction of a concentrator in Wisconsin, is expected to reduce costs and assure security of sand supply through the control of a frac sand mine in Wisconsin. In Phase 3, the Company intends to construct a larger frac sand plant to process and distribute both imported and domestic sand, which may potentially, but not necessarily, include sand mined as a co-product of development at the Company's Minago project. The Company has already identified a site in Winnipeg, Manitoba for this purpose.

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Forward-Looking Information: This news release contains certain forward-looking information. All information, other than information regarding historic 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 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 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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