Select Sands Corp. Announces the Start of Plant Reconfiguration Project and Completion of the Purchase of Its Diaz Rail Facility in Diaz, Arkansas
January 15, 2020 at 05:57 pm
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Select Sands Corp. announced that its 100% owned subsidiary, Select Sands America Corp., has started a re-construction project to optimize and consolidate processing assets to improve costs. The Company has also completed the purchase of the Diaz Rail Loading Facility, located in Diaz Arkansas (the "Diaz Rail Facility"), for the remaining payment of USD 968,747. Under the lease-to-purchase agreement, the total cost of the Diaz Rail Facility was USD 2,050,000 with prior lease payments applied to the total purchase price. The Plant Reconfiguration Project includes installation of dry-process equipment at the Diaz Rail Facility, thereby increasing process efficiency by reducing inter-plant transportation costs. Dry processing at Diaz will immediately save approximately 16 miles of interplant transportation and over one hour in transload logistics. In addition, the Company has implemented a program to increase its own truck fleet. On a per mile basis, costs savings are estimated to be approximately 25% compared to outside contract trucking. Logistical improvements will also be carried out at the Company's Sandtown Quarry. No disruption to production or shipping are expected to be experienced during the Plant Reconfiguration Project. The final payment for the Diaz Rail Facility and the Plant Reconfiguration Project are being funded by a secured bank loan of up to USD 4,500,000 being provided to the Company's wholly owned subsidiary Select Sands America Corp. The loan bears interest at a rate of 5.25% per annum, matures on July 9, 2023 and is secured by a general security agreement and guaranteed by the Company.
Select Sands Corp. is a Canada-based industrial silica product company, which wholly owns a Tier-1 silica sands property and related production facilities located near Sandtown, Arkansas. The Company is engaged in mining its 520-acre site in Arkansas named the Sandtown quarry. The property is underlain by the Ordovician St. Peter sandstone formation, the source of industrial silica sand Ottawa White frac sand, selling into various United States oil and gas and industrial and specialty end markets. These properties include sand sphericity and roundness, crush (K Value), acid solubility, turbidity and silicon dioxide (SiO2) content. The Company is focused on developing this business to enable commercial silica sand sales to industrial and energy customers. Its Plant Reconfiguration Project includes installation of dry-process equipment at the Diaz Rail Facility.