Athabasca Minerals Inc. (AMI) has bought out the “at arm’s length” partners of Privco1 and Privco2 to secure 100% ownership of each company, which respectively hold the Montney and Duvernay premium domestic sand deposits in Alberta, Canada. These transactions were combined and concluded for eight million AMI shares (plus $1.00), to be issued in three milestone installments and valued at $2.0 million in total.
The corporation is also using AMI shares to make one final Annual Minimum Royalty (AMR) payment for Privco1, relating to the Montney deposit, valued at $200,000, with three corresponding milestone installments.
In January 2021, the corporation and its subsidiaries also made material progress as follows:
- AMI Aggregates, the base division, resumed operations at Coffey Lake Public Pit and is currently delivering on a major order with revenues in excess of $500,000.
- AMI RockChain, the corporation’s technology-enabled midstream division, secured recent orders to deliver aggregates for a number of customer projects across Western Canada, with a combined value exceeding $800,000, and has commenced delivery on several of those projects.
- TerraShift Engineering formalized a three-year engineering services agreement, renewable annually thereafter, with Ministikwan Lake Cree Nation in Saskatchewan for future infrastructure work as it relates to environmental, geo-technical and civil projects. TerraShift is currently working with the Ministikwan Lake Cree Nation to confirm project scopes and contracts in 2021.
The corporation remains financially prudent during the COVID-19 pandemic. Effective Jan. 1, AMI implemented 10% reductions of management salaries and board fees and continues to participate in the Canada Emergency Wage Subsidy program.
Robert Beekhuizen, chief executive officer of Athabasca, stated, “AMI’s increased ownership in Privco1 and Privco2 to 100% supports our strategy and commitment to advance the Montney and Duvernay projects and affordably deliver premium domestic, in-basin sand to the Western Canadian market. With imported American sand still dominating the supply chain, our goal is to bring a more competitively priced, high-quality, ‘Buy Canadian’ alternative. Furthermore, our full ownership and control of the associated sand deposits helps simplify business terms with our international partner. These transactions totaling just over $2.2 million, represent an 72% discount to the original buy-out options, priced at $8 million each, which AMI prudently chose to forgo exercising last year. Twelve months later, we are pleased to announce a far more economic buy-out, which is beneficial to our cash position and our shareholders. Additionally, with over $1.3 million of confirmed purchase orders in January from both Coffey Lake Pit and AMI RockChain, this is a healthy financial start in 2021 and a good sign for the year ahead.”