Athabasca Minerals Inc.’s subsidiary AMI Silica LLC (AMIS) has signed a multi-year transload agreement for the delivery of its silica sand into the Grande Prairie, Alberta, Canada, region.
In addition, AMIS has signed an 18-month sand supply agreement with a commitment to provide various product specifications to a leading North American oilfield services firm.
The sand agreement provides a minimum commitment of 20,000 U.S. tons per month of 40/70 frac sand with the option for the customer to purchase additional volumes. The total minimum commitment for the Sand Agreement is 360,000 tons, subject to pricing adjustments.
This agreement increases the company’s offtake capacity for frac sand in Western Canada and protects the company from medium-term market fluctuations.
The transload agreement gives AMI Silica the capability to build on its strategic logistics network by adding additional supply into the growing Canadian oil and gas market.
The Grande Prairie transload gives AMIS the ability to transport and sell a minimum of 30,000 metric tonnes of product per month into the Montney, Eastern Duvernay and Deep Basin regions. This agreement has a two-year term with the option to extend, by mutual agreement, for up to two additional terms of 12 months.
Chief Executive Officer Dana Archibald stated, “Combined with our multi-year transload agreement previously announced on Nov. 24, 2022, we continue to add to our network in Western Canada. These transload partnerships provide AMI Silica LLC with the ability to adjust our business model from selling at our mine gate to selling directly to our customers, in-basin. This new business model increases our revenue per ton, insulates the company from increased supply pressures in Wisconsin, allows us to better serve our customers, and to build the AMI Silica LLC brand in key markets served by our transloads. Our team continues to focus on producing a high-quality sand, increasing our production capacity and solidifying long-term sales of our products.”
The corporation owns a 50% interest in AMI Silica LLC with its partner JMAC Energy Services LLC (JMAC) owning the other 50% interest. JMAC is controlled by Jon McCreary, a director of Athabasca Minerals Inc.