Athabasca Acquires Strategic Sand Assets

Athabasca Minerals Inc. entered into a definitive agreement for the acquisition of strategic sand assets located in the United States from an “independent, arms-length vendor,” according to the company. In support of the strategic acquisition, JMAC Resources Limited has agreed to purchase 7,375,000 AMI common shares at a price of $0.20 per share for gross proceeds of C$1,475,000 in a non-brokered private placement.

The strategic acquisition will be completed by AMI Silica LLC, a 50%-owned subsidiary of the corporation. The other 50% of AMI Silica is owned by JMAC Energy Services LLC. Both JMAC Resources and JMAC Energy are controlled by Jon McCreary, a director of the corporation. Accordingly, upon closing of the strategic acquisition, each of AMI and McCreary will hold an indirect 50% interest in the strategic assets.

The strategic assets are comprised of real-estate, an operational sand mine and processing plant capable of up to 2 million tpy, fixed storage, two rail transloads (including unit-train capability), mobile equipment, and active supply chain contracts including rail cars, for cash consideration of US$1 million (approximately C$1.2 million) and the assumption of reclamation liabilities of approximately US$6.4 million. 
AMI management believes that the strategic acquisition will be a step forward for AMI Silica which is currently managing the strategic assets under an operations agreement, which is cash-flowing and serving customers with product in Canada and the United States. All proceeds from the private placement will be used to fund the cash consideration and closing costs for the strategic acquisition.

Robert Beekhuizen, chief executive officer, said, “This strategic acquisition is part of the corporation’s planned growth and will expand AMI’s portfolio to include both U.S. and Canadian resources and assets, and will bring a new source of revenue to AMI. We see this targeted acquisition as a strategic bookend complementing AMI’s Prosvita Sand Project in Alberta. It has a proven supply chain with a history of product delivery to destinations across Alberta, British Columbia and select locations in the United States. We are very familiar with the assets being acquired, having had hands-on experience successfully managing and operating them for the past five months. We’re fully staffed and ready for a smooth transition, and excited to on-board new team members to the AMI family. We also look forward to serving our customers and community stakeholders with excellence and integrity.”

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