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Frakzand (frac sand)

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DeZwarteRidder
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Company expects to exit Q3 at 500,000 tpa annualized frac sand production rate

TORONTO, ONTARIO--(Marketwired - Aug. 14, 2014) - Victory Nickel Inc. ("Victory Nickel" or the "Company") (TSX:NI) (www.victorynickel.ca) has filed its financial results for the three and six months ended June 30, 2014. Construction and refurbishment of the Company's dry frac sand processing plant in Seven Persons Alberta, located approximately 18 km south of Medicine Hat (the "7P Plant"), was completed in March, 2014 and commissioning continued during the second quarter until recently. The cost incurred to complete the construction of the 7P Plant totalled $5,364,000 including leased equipment of $703,000.

During the commissioning period and until June 30, 2014, 41,367 tons of washed concentrated sand was acquired from Wisconsin for shipment to the 7P Plant for finish processing into several grades of high quality frac sand.
To the end of June 2014, 22,519 tons of various grades of finished frac sand were produced.
Total sales for the six months ended June 30, 2014 were 11,310 tons, of which 1,840 tons were sold during the first quarter.
Sales revenue totalled $1,702,000, of which $274,000 was credited to pre-operating costs during the first quarter.
Cost of goods sold during the second quarter was $1,587,000. On a per-ton basis this is higher than is expected on a go-forward basis post-commissioning of the 7P Plant.
Finished goods inventory at June 30, 2014 was 11,209 tons of various grades of frac sand.
Finished goods inventory as at June 30, 2014 was valued $1,227,000. This represents the cost of production expected to be realized as production increases to more normal levels once out of the commissioning stage.
As a result, the Company incurred a loss on sales of $159,000 for the three months to June 30, 2014.
After general and administration, financing and amortization expenses and taxes, the Company incurred a net loss of $2,349,000, or $0.00 basic and diluted, for the six months ended June 30, 2014. Of this loss, $1,012,000 was net finance costs to fund the construction of the 7P Plant; many such costs are non-cash items.
For the Quarter ended June 30, 2014 the Company incurred a net loss was $754,000, or $0.00 basic and diluted.
The 7P plant is now operating well on a 12-hour-per-day, 7-day-per-week basis and producing at a rate of approximately 4,000 tons per week. As a result of a recent sales contract (see press release dated August 13, 2014), plans are underway to add a third production crew at the 7P Plant which will increase throughput to approximately 6,500 tons per week.
The fourth and final production crew will be added as soon as sales justify the increased staffing. This is expected during the third quarter of 2014.

"We are pleased with the ramp up in frac sand production since commissioning began in March," said René Galipeau, Vice-Chairman and CEO of Victory Nickel. "We are seeing increasing customer demand for our premium-quality Jordan Formation frac sand from Wisconsin and expect to exit the third quarter at the projected production rate of 500,000 tons per annum ("tpa")."

"With the completion of commissioning, Phase 1 of Victory Nickel and Victory Silica Ltd.'s ("Victory Silica") three-phased plan to enter the frac sand market is essentially complete and we are proceeding with negotiations on Phase 2," added Mr. Galipeau. "At full production, the 500,000 tpa 7P Plant is expected to generate operating cash flow in excess of $12,000,000 per year. Phases 2 and 3 will bring the eventual production target to 1,500,000 tons of frac sand per annum and are expected to improve these margins. On completion of all three phases, cash flow is expected to exceed $40,000,000 per annum."

"The Company's focus over the past several quarters on establishing a presence in the frac sand market is in part to prove the value of the substantial NI 43-101-compliant frac sand resource at our Minago Project in Manitoba. The proposed open pit at Minago contains over 12 million tonnes of the highest quality Canadian frac sand available. This is in addition to the significant nickel resource, and we continue to work on optimizing Minago and our other nickel assets in preparation for a strengthening nickel market," Mr. Galipeau said.

Please refer to the Company's Unaudited Condensed Consolidated Financial Statements for the three and six months ended June 30, 2014 for additional information. These are available at www.sedar.com.

About Victory Silica

Victory Silica is a wholly-owned subsidiary of the Company and is charged with a phased plan to establish the Company in the frac sand market. In Phase 1, the Company has begun sales 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 or gas play well sites. Phase 2, which includes the construction of a frac sand wash plant 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, Victory Silica has identified a site in Winnipeg, Manitoba, where it plans to build a larger frac sand dry 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.

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 and oil plays in Canada and the US rise to prominence.

Read more at www.stockhouse.com/news/press-release...
DeZwarteRidder
0
quote:

benito c. schreef op 14 augustus 2014 14:43:

Zou er nu eindelijk eens iets verdiend gaan worden daar?
Laten we het hopen!

Een frakzand-fabriek is in ieder geval heel wat minder riskant dan mijnbouw en ik ben heel blij dat alles draait zonder verdere tegenvallers.

DeZwarteRidder
0
aggman
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August 14, 2014 - 01:31 PM
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Hi-Crush vs. Victory Silica - an optical comparable
Hi-Crush is shipping 4 M tons @ $14/ton per year - and has a market cap of $2.1 BN - and is healthily increasing cash returns to Unit Holders.

Victory Nickel has a target of 1.5 M tons @ $28/ton (my read based on the release today) - and the current market cap is: $40M. (no dividend, no cash returns).

To say that the latent opportunity here is a 25-bagger, is a cautious under-statement.

What is there not to like?

Read more at www.stockhouse.com/companies/bullboar...
DeZwarteRidder
0
Silica is the New Gold, Morgan Stanley Analyst Expects Shortages for Years - Rogue Resources Inc. Appears Poised to Yield Results
V.RRS | 15 hours ago

New York, NY / ACCESSWIRE / September 4, 2014 / Market Equities Research Group has published insight on the opportunity for investors in publicly traded silica producers and select junior miners with solid high-purity silica prospects -- Rogue Resources Inc. (TSX VENTURE:RRS) (OTC:GCRIF) is identified in this newly issued market bulletin report. Bloomberg noted last week that the stock price of publicly traded silica producers have been on an impressive and steady rise. The growing use of fracking (extracting oil and natural gas from shale formations) has contributed to a surge in share prices of U.S. companies which supply high-quality sand to energy producers. When used in the fracking process, silica helps prop open fractures in shale, which eases the flow of oil and gas. Bloomberg reported that investor demand does not look set to stop anytime soon, quoting "Sand is the new gold" from Ivaylo Ivanov, founder of Ivanhoff Capital. Additionally, Ole Slorer, a New York-based analyst at Morgan Stanley, expects demand for fracking-grade sand in 2016 will be 96 percent higher than last year's level. He expects shortages for years, with supplies in 2016 trailing demand by 10 percent.

The full market bulletin report with charts may be found at www.marketequitiesresearch.com/report... online.

Noteworthy silica producers on a tear include:

1) Emerge Energy Services LP (NYSE:EMES), a Southlake, Texas-based partnership that made its initial public offering at $17 a share in May-2013 -- it changed hands for more than $140 last week;

2) Hi-Crush Partners LP (NYSE:HCLP), based in Houston more than tripled during the past year;

3) U.S. Silica Holdings Inc. (NYSE:SLCA), based in Frederick, Maryland more than tripled during the past 15 months;

A quality grade of silica is required for fracking, however even greater margins are available to silica producers with exceptional grades as high-purity silica is used to create fused quartz for high-tech manufacturing such as solar panels, semiconductors, LCD displays, and lithium batteries

One strategy for astute investors seeking extraordinary returns is to establish a long position on a junior miner that is highly prospective for high-purity Silica results of significance, one such Company is Rogue Resources Inc. (RRS.V). RRS.V last week announced it has closed the first tranche of its $2.5 million private placement previously announced on July 30, 2014, for gross proceeds of $2,073,240. With ~35.3 million shares outstanding (~55.2M fully diluted), RRS.V has a tight share structure, and is apt to rise on good news. The Company appears undervalued with a market cap under $4 million; it is well capitalized to execute on near-to-mid-term objectives (with recent (August 26, 2014) closing of ~$2 million financing), and clearly possesses large inherent value in its diversified portfolio which justifies a market cap several times the current.

RRS.V is a uniquely diversified/de-risked junior miner currently advancing projects on several commodity fronts, three of which present substantial near-term catalyst potential and make RRS.V an exceptional risk-reward scenario.

1) Silica - RRS.V is strategically positioned to capitalize on the demand for high-purity silica (SiO2) at its recently acquired >99.9% high-purity SiO2 target project in Quebec which is poised to advance quickly to resource. RRS.V's silica property is located adjacent to the Mine Sitec which has been in operation for the past 50 years. Sitec produces ~250,000 tonnes of SiO2 annually. RRS.V's silica property has very good infrastructure support with multiple transportation options (Baie-Saint-Paul on the St. Lawrence River is only 42 km south). The property is easily accessible and traversable. A May-2014 Technical Report on RRS.V's Lac de la Grosse Femelle Silica Project references historic sampling and exploration findings (non 43-101 compliant) revealing thicknesses over 200 metres and on average 150 metres, with 275 metres width and a strike length of at least 365 metres. The 'G' lens located on RRS.V's silica property appears to host grades superior to what Sitec is mining, the area has not been mapped extensively, and there is the possibility to discover significantly more. Rogue Resource's Lac de la Grosse High-Purity Silica Project hosts zones that were identified as part of a historic (non 43-101 compliant) resource estimate from 1979 that encompassed the project in part -- RRS.V's technical team will be targeting >99.9% purity silica quartzite. The nature of the material allows for low cost exploration, quick to resource, and quick to market. High-grade high-purity silica deposits are rare. Uncommon geological formations exist in Quebec that host high-grade SiO2 (with low impurities), and significant investment is being made to advance this sector; Spanish based Grupo FerroAtlantica, one of the largest silicon metal producers in the world, has announced plans for a $382 million silicon metal plant. FerroAtlantica's Port Cartier Plant is located under 400 km from RRS.V's Lac de la Grosse Project. The Port Cartier Plant will be operational in 2017 and produce 100,000 tons of silicon metal. With prices for economic high purity silicon ranging from $130 to >$5,000 per tonne (depending on % purity), it puts RRS.V in play. RRS.V's quartzite silica deposit is top-notch/superior-grade and purity compared to more prevalent quartz sandstones deposits, the superior nature lends the deposit to specialized high-tech industrial interests, and the proximity of RRS.V's high-grade SiO2 project to the ports of the St. Lawrence make it a coveted asset.

Read more at www.stockhouse.com/news/press-release...
[verwijderd]
0
Leuk draadje, ben ermee aan de slag gegaan, paar dingen:

- Canadian Fracsand, dat is een no brainer zeg, top tipje weer hoor.
- Zo te zien Victory Nickel weer handel op 17 sept na 10to1 split, zie: http://www.stockhouse.com/companies/bullboard/t.ni/victory-nickel-inc?threadid=22932551
- Athabasca Minerals lijkt me dan ook een kandidaat als je instapt op fracsand in Canada. Is net approved. Zie blogs.edmontonjournal.com/2014/08/26/...
- Heb ook naar La Ronge Gold gekeken, maar als ik het goed begrijp hebben ze al het fraczand nu aan Canfrac verkocht voor een 22% ownership. Canfrac is voor zover ik kan nagaan en private company.
Heb ik spelers gemist?

Dank weer voor dit huiswerk ;)
DeZwarteRidder
0
quote:

tallrisk schreef op 16 september 2014 17:36:

Leuk draadje, ben ermee aan de slag gegaan, paar dingen:

- Canadian Fracsand, dat is een no brainer zeg, top tipje weer hoor.
- Zo te zien Victory Nickel weer handel op 17 sept na 10to1 split, zie: http://www.stockhouse.com/companies/bullboard/t.ni/victory-nickel-inc?threadid=22932551
- Athabasca Minerals lijkt me dan ook een kandidaat als je instapt op fracsand in Canada. Is net approved. Zie blogs.edmontonjournal.com/2014/08/26/...
- Heb ook naar La Ronge Gold gekeken, maar als ik het goed begrijp hebben ze al het fraczand nu aan Canfrac verkocht voor een 22% ownership. Canfrac is voor zover ik kan nagaan en private company.
Heb ik spelers gemist? Dank weer voor dit huiswerk ;)
Ik volg alleen Victory Nickel en volgens mij is die ook het verst gevorderd.
De financiering is altijd weer een probleem voor kleine bedrijven zoals Athabasca Minerals.
[verwijderd]
0
Helder!

Focus is ook altijd een goed idee.

Mijn redenering? Als ik het hele Fracsand verhaal goed begrijp, dan zit daar wel echt een mega potentie in Canada. Een transportkorting van $36 per ton bij Canadese productie. Als, als, dan is er wel plek voor meerdere bedrijven vind ik. Ik denk aan kleine hapjes hier en daar.

Athabasca is nu wat duur, er is veel interesse uit Duitsland begreep ik. Verwatering lijkt mij noodzaak idd. Ik houd het even in de gaten...
DeZwarteRidder
0
One key ingredient is sand.

According to the Wall Street Journal, due to the enormous increase in the demand for sand, PacWest Consulting Partners expects frackers to use nearly 95 billion pounds of sand this year, up 30 percent since 2013. This projection, made by the energy-consulting firm just one year ago, is a 50-percent increase to its original estimate.

Since many energy companies have adopted the process of fracking in their oil field operations, they have come to rely on sand as an integral component to this procedure.

In fracking, sand can be used as a “proppant.” Once the shale rock formations are injected with water and chemicals, it is the proppant (normally treated sand) that keeps the newly formed cracks open after they are made in the rock. This allows the natural gas or crude oil to be extracted more easily


A recent article from Shale Plays Media highlights that just a year ago oil field fracking operations used around 2,500 tons of sand, whereas today the new fracking techniques call for as much as 8,000 tons of sand to be pumped into a well. (That’s 75 to 100 railcars of sand per well!) The article goes on to explain that this “frac sand” is normally high-purity quartz that can withstand between 6,000 and 14,000 pounds of pressure per square inch.

www.stockhouse.com/opinion/independen...
DeZwarteRidder
0
Victory Nickel Board Approves Proceeding with Phase Two of Frac Sand Business Plan
T.NI | 2 days ago
Phase One now complete, Phase Two designed to enhance quality and reduce costs

TORONTO, ONTARIO--(Marketwired - Nov. 12, 2014) - Victory Nickel Inc. ("Victory Nickel" or the "Company") (TSX:NI) today announced that its Board of Directors has approved moving forward to Phase Two of the Company's three-phased business plan to become a significant frac sand supplier in Canada and the northern United States.

"Our Seven Persons plant in southern Alberta (the "7P Plant") is now operating 24/7, sales are strong and we are comfortable that we are now a preferred supplier of high-quality Northern White Wisconsin frac sand," said Ken Murdock, CEO of Victory Silica Ltd. "The Board of Directors has recognized this by providing management with a mandate to advance the business through the next phase which will ensure security of supply of Wisconsin frac sand and allow the Company to more effectively control quality while reducing costs."

Phase Two includes the construction by Victory Nickel of a moveable 1,000,000 ton per year ("tpy") frac sand wash plant directly on a sand deposit in Wisconsin at a cost of approximately US$5 million. The Phase Two Wisconsin wash plant will be capable of supplying washed, concentrated sand to both the existing 7P Plant and to the 1,000,000 tpy dry frac sand processing plant that is currently being planned for construction in Manitoba as part of Phase Three. Phase Three will increase Victory Nickel's total finished frac sand production capacity to 1,500,000 tpy. The target is to have the Phase Two plant operational in the second quarter of 2015.

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 One, the Company constructed a 500,000 tpy dry processing plant and is 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 Two, which includes the construction of a wash plant in Wisconsin, is expected to reduce costs, ensure security of sand supply through the control of a frac sand mine in Wisconsin and enhance quality control. In Phase Three, 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.

Please visit the Company's website at www.victorynickel.ca.

Read more at www.stockhouse.com/news/press-release...
DeZwarteRidder
0
Frac-Sands Poised For Huge Growth Despite Low Oil Prices
By Editorial Dept | Fri, 28 November 2014 16:31 | 0


The practice of hydraulic fracturing has rightly received a lot of the credit for allowing the U.S. to boost its oil production in recent years by as much as 60%. The U.S. is now producing more oil than it has in decades and the boom is expected to continue.

But in order to fracture a well, there is one key ingredient needed: sand. Also called “frac-sand” or more officially known as “proppant,” sand is vital to opening up shale to allow oil and gas to escape.

Here is how it works. When oil and gas companies conduct a fracking job, they send a mix of water, sand, and proprietary chemical cocktails down a well. The extraordinary pressure at which they inject the mixture fractures shale rock, and the frac-sand props open the fissures. With cracks kept open by frac-sand, oil and gas flow out from shale rock and into the well.

Frac-sand often comes from high-purity quartz and is crush resistant, allowing it stay intact while shale rock fractures. A single frac job can require several thousand tons of sand. But oil and gas companies have found that by increasing the volume of sand in the fracturing process, they can increase output, often by as much as 30%. The number of shale wells using that extra burst of sand stands at just 20%, but may rise to 80% according to RBC Capital Markets.

All of this is creating a run on frac-sand, which has turned into a booming industry virtually overnight (see chart).

oilprice.com/Energy/Energy-General/Fr...

Read more at www.stockhouse.com/companies/bullboar...
DeZwarteRidder
0
Posted Jan 26, 2015 at 9:52 am

Frac sand boom remains relatively untouched by oil price drop
OLYMPUS DIGITAL CAMERA

Wisconsin’s booming frac sand mines have shown few signs of slowing down, even as oil prices remain at their lowest in months.

The mines, located primarily in western and northwestern Wisconsin, provide sand necessary in hydraulic fracturing sites across the country. The sand is taken from the sides of hills and bluffs in-state and shipped by train to mines elsewhere, said Jay Zambito, a geologist and assistant professor for University of Wisconsin extension.

Zambito said the sand’s crucial role in hydraulic fracturing is what is saving it from a rapid price decrease, even as the price for the oil continues to decline.

Frac sand mining business booms in Wisconsin, sparks controversyA frac sand mine in western Wisconsin was shut down earlier this month because it lacked a permit to operate. …

“With the hydraulic fracturing process, the more sand they use per well, the more oil and gas they’re able to recover,” Zambito said. “So even if there are fewer wells being drilled, if the wells being drilled are using more sand that means there might not be a drop in the demand for sand from Wisconsin.”

The drop in oil prices will likely force each hydraulic fracturing site to try to get more and more oil from each mine, which increases the demand for the sand necessary in the frac mines.

Dan Masterpole, a conservationist for Chippewa County and director of Land Conservation and Forest Management Department, said he has seen no signs of a slowdown for the industry. His county is the source of much of the frac sand found in Wisconsin.

“We haven’t seen the direct effect as yet from the reclamation-permitting side,” Masterpole said.

Masterpole said although he is able only to comment on his observations of the mines and their permit requests in Chippewa County, he does not think dropping oil prices are having an effect.

He said applicants that had filed for permits in the third and fourth quarter of 2014, when the price of oil began its descent, are systematically proceeding through the permitting process.

“Those that have permits and active mines were at full production during the third and fourth quarters of 2014,” Masterpole said.

He said in planning for 2015 and reviewing existing permits, the mine operators have informed him they intend to maintain full production for the duration of the new year, even as oil prices show no signs of increasing.

In fact, the industry may actually be growing. Masterpole said some companies have expressed an interest in starting up mines and processing facilities in Chippewa county and are preparing to enter the permitting process. Additionally, he said the county continues to see investments in rail infrastructure designed to provide the structure to meet anticipated market demand.

The controversies in the area of mining sand for hydraulic fracturing are also unlikely to slow down in the near future.

The industry has seen a plethora of debate since its inception in recent years, with environmentalists and residents voicing concerns about the mines’ impact in their surrounding communities, while others say the mines have brought jobs and economic growth for rural communities.

badgerherald.com/news/2015/01/26/frac...
DeZwarteRidder
0
Obama unveils long-awaited fracking rules
Cecilia Jamasmie | March 20, 2015

Obama to announce long-awaited fracking rulesThe Obama administration announced Friday the first major nationwide safety restrictions on hydraulic fracturing (or fracking) in the oil and natural gas industries.

The updated regulations, in the works since 2012, set standards for wells and disposal of wastewater, and will require disclosure of chemicals used. They will apply only to drilling on federal lands, which account for 11% of the natural gas and 5% of the oil the U.S. consumes, according to Interior Department data.

“This rule will move our nation forward as we ensure responsible development while protecting public land resources,” Interior Secretary Sally Jewell said in a statement. “As we continue to offer millions of acres of America’s public lands – your lands – for oil and gas development, it is critical that the public has confidence that robust safety and environmental protections are in place.”

“Washington continues to come out with regulations that make it more complex and complicated to develop American energy,” Politico.com quoted GOP Sen. John Barrasso as saying. The politician, whose home state of Wyoming imposed its own fracking regulations in 2010, added he was “likely to oppose whatever” Interior’s Bureau of Land Management proposes.

The final version of the rules unveiled today is not likely to please environmentalists nor oil industry leaders either. The first group has been asking for extremely harsh restriction, while companies insist they would rather have well-tailored state rules than one-size-fits-all federal mandates.

The controversial drilling technique of injecting water and chemicals deep into shale rock formations to crack open pockets of natural gas and oil has been used for decades. But only in recent years such practice has come under scrutiny as it is now massively used by the U.S. oil and gas industry.

The method has led to a natural-gas boom in several states such as Pennsylvania, Ohio and Texas, unlocking also oil reserves not commercially viable in the past. But it has sparked opposition as well, as locals claim the technology may contaminate drinking water and add to air and soil pollution. Fracking companies and other proponents say that not only fracking can be done safely but it also creates jobs for local communities.
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