Consolidated Goldfields Corp. has acquired mineral rights in three properties in Alberta and Manitoba, Canada, from 1824455 Alberta Ltd. (182) that the company believes are strategically located for the exploration and development of frac sand.
The purchase price was $2.75 million, payable through aggregate cash payments of $50,000, an additional $50,000 within 45 days of the closing and an additional $175,000 upon the Company’s completion of certain financing transactions.
In addition, the company issued 23.5 million shares of its common stock to 182 with an additional 23.5 million shares issued and held in escrow, with a proxy granted to the company to be released to 182 upon the achievement of certain milestones. The company has also granted royalties to 182 in an aggregate annual amount of $225,000 until commercial production is achieved, at which time 182 will be entitled to a production royalty of 2 percent of the proceeds received by the company from the sale of minerals from the properties. Feisal Somji, a director of the company, is a consultant to 182.
Consolidated Goldfields President and CEO Marc J. Andrews commented, “We are very excited about this exceptional opportunity and new direction for the Company. The emerging frac sand/proppant industry has already seen sizeable growth in its early stages of development and is expected to grow annually at a rapid rate for the foreseeable future. The exceptional land package that we have acquired based upon the size, quality, and location of our projects make us an immediate and important player in the Canadian frac sand market and beyond.”
Andrews continued, “Our goal is to become the leading frac sand producer in Canada, and then diversifying into other countries that are coming online, as future demand around the world is forecast to grow exponentially. We see this as a rare opportunity to enter into a relatively young frac sand market with outstanding growth potential, positioning ourselves to become a major player in an industry without a ceiling.”