Claim Post Resources Inc. signed a Letter of Intent with Char-Crete Ltd. to acquire nine contiguous silica sand quarry leases, encompassing approximately 1,050 acres. The property is located near Seymourville, Manitoba, Canada.
The Seymourville Silica Sand deposit was discovered in 1977 and was drilled by Manitoba government geologists in 1981 and again in 1989. The deposit is the Lake Winnipeg Formation on-shore extension of the Historical Black Island silica deposit. Black Island silica was mined from 1928 to 2003 when it was incorporated into a park. Black Island sand was used as feed stock to manufacture glass, fiber glass, foundry sand and frac sand by the oil industry.
The Char-Crete leases cover the thickest two-thirds of the deposit. The other one-third of the deposit is owned by Gossan Resources. Gossan has drilled more than 60 holes and has drill-indicated white silica sand varying from 5 to more than 15 m in thickness. Gossan has also completed extensive API test work using PropTester Inc., noting that the white silica sand meets all minimum API standards.
The Seymourville Silica Sand Deposit has a range of 20/40, 40/70 and 100 mesh sizes and are ideal for both the Canadian and U.S. oil and gas proppant markets, if it meets API specifications. The sand will be evaluated as part of the 43-101 test work. Frac sand sales prices are currently in the $50 to $100 per ton range FOB processing plant, depending on sand size, roundness, crush strength and length of contract term, the company said.
As part of Claim Post's due diligence, Robert Ober and Associates of San Antonio, Texas, was retained to provide a conceptual design and costing for a 400,000 tpy frac sand processing plant and a 3,600 tpd rail load-out facility. This analysis indicates that an integrated mine-processing plant-load out facility on the Char-Crete leases would be competitive with the new frac sand plants being constructed in Wisconsin in both capital and operating costs, while being about much closer by rail to the Western Canada shale oil and gas basins (i.e. Canadian side of the Williston (Bakken), Horn River, Laird and Montney Basins).