Canadian Premium Sand Inc. (CPS) has entered into a non-binding letter of interest with Hi-Crush Inc. on Dec. 6 that outlines the key terms for Hi-Crush to assist in the design and construction of the Wanipigow Sand Project.
This includes sharing of Hi-Crush’s expertise in plant design, construction and operations through their NexStage equipment business. A variety of plant configurations for the project are being jointly investigated, with the aim of a substantial reduction in capital cost while implementing the most cost-effective operational solution.
The strategic relationship also addresses terms of a supply arrangement for CPS to continue delivering Northern White Sand into Western Canada that will be procured at agreed upon rates from Hi-Crush’s existing production facilities.
“The management team at CPS is positioning the company for resilience in the current challenging market conditions,” stated Glenn Leroux, president and CEO of CPS. “We are excited to collaborate with a recognized leader in the silica sand and logistics sectors and gain from Hi-Crush’s vast operating experience and their offering of various NexStage equipment solutions. The initiatives that we are pursuing will position the Company for growth through optimization of capital costs, strategic operating scenarios for the project along with continuing to grow our Northern White Sand sales.”
The collaborative relationship with Hi-Crush is a key element of company’s efforts to generate a robust advancement plan for the company and the project. Furthermore, the company is ramping up its 2020 sales efforts in Western Canada.
The final terms and structure for a transaction between the company and Hi-Crush is subject to negotiation of definitive documentation, completion of customary due diligence and receipt of any required regulatory approvals. A comprehensive news release will be issued if and when the company and Hi-Crush enter into a definitive transaction.