Canadian Premium Sand Inc. provided a corporate update on its previously announced comprehensive capital optimization review, the conductivity and permeability test results for its 40/70 mesh-size product and its ongoing efforts to secure offtake and transload location agreements.
The company is working with a third-party project advisor with extensive operating experience to develop a revised plant design, site layout and a budgetary capital cost. The review involves significant changes to the original plan and is expected to achieve material capital cost savings.
Completion of the review has been delayed as a number of the proposed changes require confirmation by third parties, which is currently underway. The company now expects to conclude this review in the fourth quarter of 2019, with results disclosed shortly thereafter.
The company has received conductivity and permeability test results for a 40/70 sample from the project that was sent to StimLab in August. A summary of the testing parameters, results and comparison to Wisconsin suppliers has been incorporated in a presentation also outlining the advantages of using higher quality sand in Western Canada.
The company continues to engage in conversations with end-users, transportation providers and transload service providers as per its logistics and sales plans which form a part of its business plan involving working toward securing conditional offtake agreements with several customers operating in Western Canada in addition to conditional agreements for securing transload throughput in key locations.
As per the Preliminary Feasibility Study and Mineral Resource Report, prepared in accordance with National Instrument 43-101, the Wanipigow Sand Resource consists of 41.5 million tonnes of Measured Resource, 8.1 million tonnes of Indicated Resource and 97.3 million tonnes of Inferred Resource. Mineral resources are not mineral reserves and do not have demonstrated economic viability.
Furthermore, the Technical Report indicates a Proven and Probable Reserve of 30.6 million tonnes, upon which the published economics, mine-life and business plan are based.
The Mineral Reserves estimated for the Wanipigow Silica Sand Project are subject to the types of risks common to most silica sand quarry operations that exist in Canada. Uncertainty that may materially impact mineral reserve estimation include but are not limited to: site-specific mining and geological conditions, management and personnel capabilities, availability of funding to properly operate and capitalize the operation, variations in cost elements and market conditions, developing and operating the mine in an efficient manner, unforeseen changes in legislation and new industry developments.