(TheNewswire)
April 2, 2021 – TheNewswire - HOUSTON, TEXAS,USA – Select Sands Corp. (“Select Sands” or the“Company”) (TSXV: SNS, OTC: SLSDF) provides the following updateon its corporate activities for the first quarter of 2021.
SALES UPDATE
The Company sold 53,009 tons offrac and industrial sand during Q4 2020, compared to 49,248 tons in Q32020.
Based on current and expected market conditions, theCompany anticipates sales volumes of frac and industrial sand ofbetween 55,000 to 65,000 tons for Q12021.
RENEWAL OF LINE OF CREDIT
The Company is pleased to announce that it hassuccessfully renewed its USD $5 million line of credit loan agreement(the “ Line ofCredit ”) with repayment to now occur onFebruary 20, 2022. Interest payable on the Line of Credit will befixed at 4.75% for the new term. The Company currently owes USD $4.4million on the Line of Credit. The Line of Credit is now secured by asecond mortgage on the Company’s assets of USD $1.75 million inaddition to the existing security agreement. Proceeds from the Line ofCredit are being used to fund the Company’s working capital.
WINTER STORM IMPACT ONOPERATIONS
The Company announces that due to the recent winter storm in February2021, the Company has received an unusually large invoice for itsFebruary 2021 natural gas consumption. The Company has a supplyagreement with a natural gas company for the supply of natural gas toits sand processing plants in Arkansas. The supply agreementstipulates that the Company will be charged for a minimum usage atmarket rates each billing period, even if the Company does not consumethe minimum usage.
During the month of February 2021, the Company’s operations inArkansas where hit by a severe winter storm. During this time, theCompany was forced to cease operations. As a result of the storm andthe extended period of extremely low temperatures, physical gas andpower infrastructure was severely impaired. Specifically, well-headfreeze-offs occurred, and gas processing plants and pipelines failed.This resulted in reduced natural gas supply and limited the ability todistribute and deliver natural gas on the system. At the same time,demand for natural gas was higher than normal due to increased heatingdemand during the extremely cold weather. This considerable increasein demand, coupled with a severe reduction in supply, resulted inextremely high natural gas market prices during the period of thestorm.
As a result of this winter storm event, the Companyreceived a bill for its February 2021 natural gas consumption of USD$373,043 where the bill was only USD $49,548 in February 2020. TheCompany did not consume any natural gas during the winter storm,because it was unable to operate due to the storm. Furthermore, theCompany received a notice to curtail its natural gas consumption from its natural gas supplier during this sameperiod and yet was still charged for the minimum monthly usage. As aresult of the foregoing, the Company is disputing the amount of theFebruary 2021 invoice. The natural gas supplier has agreed not tointerrupt supply while the Company goes through the dispute process.The Company is currently seeking legal advice with respect to thismatter.
2020 YEAR-END AUDIT UPDATE
The Company also advises that the February winter stormhas delayed its year-end audit and the Company will be releasing it2020 year-end audited consolidated financial statements towards theend of April 2021. The Company’s filing deadline for its financialstatements is April 30, 2021.
ABOUT SELECT SANDS CORP.
Select Sands Corporation is an industrial silica product company,which wholly owns a Tier-1 (Northern White), silica sands property andrelated production facilities located near Sandtown, Arkansas. SelectSands’ goal is to become a key supplier of premium industrial silicasand and frac sand to North American markets. Select Sands’ Arkansasproperties have a significant logistical advantage of beingsignificantly closer to oil and gas markets located in Oklahoma,Texas, Louisiana, and New Mexico than sources of similar sands fromthe Wisconsin area. Select Sands’ also operates a transload facilityin George West, Texas in Live Oak County that serves customersoperating in the Eagle Ford Shale Basin. The facility has a capacityfor 180 rail cars and is equipped with two offload/loading stationswith dedicated silos for a high throughput capacity.
The Tier-1 reference above is a classification of frac sand developedby PropTester, Inc., an independent laboratory specializing in theresearch and testing of products utilized in hydraulic fracturing andcement operations, following ISO 13503-2:2006/API RP19C:2008standards. Select Sands’ Sandtown project has NI 43-101 compliantIndicated Mineral Resources of 42.0MM tons (TetraTech Report;February, 2016). The Sandtown deposit is considered Northern Whitefiner-grade sand deposits of 40-70 Mesh and 100 Mesh.
FORWARD-LOOKING STATEMENTS
This news release includes forward-looking information and statements,which may include, but are not limited to, information and statementsregarding or inferring the future business, operations, financialperformance, prospects, and other plans, intentions, expectations,estimates, and beliefs of the Company. Information and statementswhich are not purely historical fact are forward-looking statements.The forward-looking statements in this press release relate tocomments that include, but are not limited to, the intended use ofproceeds of the Line of Credit, statements related to expected currentand future state of operations, sales volumes for 2021, the long-termimpact of the February 2021 winter storm and the anticipated filingdate of the Company’s financial statements. Forward-lookinginformation and statements involve and are subject to assumptions andknown and unknown risks, uncertainties, and other factors which maycause actual events, results, performance, or achievements of theCompany to be materially different from future events, results,performance, and achievements expressed or implied by forward-lookinginformation and statements herein. Although the Company believes thatany forward-looking information and statements herein are reasonable,in light of the use of assumptions and the significant risks anduncertainties inherent in such information and statements, there canbe no assurance that any such forward-looking information andstatements will prove to be accurate, and accordingly readers areadvised to rely on their own evaluation of such risks anduncertainties and should not place undue reliance upon suchforward-looking information and statements. Any forward-lookinginformation and statements herein are made as of the date hereof, andexcept as required by applicable laws, the Company assumes noobligation and disclaims any intention to update or revise anyforward-looking information and statements herein or to update thereasons that actual events or results could or do differ from thoseprojected in any forward-looking information and statements herein,whether as a result of new information, future events or results, orotherwise, except as required by applicable laws.
COMPANY CONTACT
Please visit www.selectsandscorp.com or call:
Zigurds Vitols
President & CEO
Phone: (844) 806-7313
INVESTOR RELATIONSCONTACT
Arlen Hansen
SNS@kincommunications.com
Phone: (604) 684-6730
Neither TSX Venture Exchange nor its Regulation Services Provider(as that term is defined in the policies of the TSX Venture Exchange)accepts responsibility for the adequacy or accuracy of thisrelease.
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