VANCOUVER, BRITISH COLUMBIA – Oct. 9, 2014 – La Ronge Gold Corp. (“La Ronge” or the “Company”) (TSX VENTURE:LAR) is pleased to announce that it has entered into a binding letter of agreement for an option to acquire a 100% undivided right, title and interest in an approximately 520-acre prospective frac sand property (the “Property”) located in northeast Arkansas, USA. The Property is a greenfield frac sand exploration prospect underlain by the Ordovician St. Peter sandstone formation. There are several surface outcrop exposures of the St. Peter sandstone unit on the Property.
The St. Peter formation is host to a number of producing frac sand mines/quarries, namely, Guion (Unimin), Crystal City, Pacific (US Silica), Agusta (Hi Crush), Festus, Pevely, Alton, Ottawa (US Silica), Kasota and Ottawa Township, all of which supply “Tier 1” quality frac sand (also known as “Northern White” or “Ottawa White Sand”) to oil and gas operations in the US. Tier 1 frac sand specifications are set out in ISO 13503-2:2006/API RP 19C Recommended Practice for Measurement of Properties of Proppants Used in Hydraulic Fracturing and Gravel-packing Operations. These properties include sand sphericity and roundness, crush (K Value), acid solubility, turbidity and SiO2% content.
Tier 1 frac sand demand is on the rise in the US and globally. Morgan Stanley’s “Industry View” published August 27, 2014, states “…we expect (frac) sand demand to nearly double (+96%) in 2016 vs. 2013, driven by 59% sand/well growth, vs. capacity growth of only 76%.” Raymond James’ “Global Research” published August 19, 2014, states “…we foresee robust growth in North American sand demand over the next three to five years, with aggregate consumption expected to reach ~78m tons by 2016, representing a ~22% CAGR between 2013 and 2016.”
La Ronge President and CEO Rasool Mohammad commented, “In view of recent advances in fracking technology, and the resultant increase in Tier 1 frac sand demand, we believe this opportunity will give La Ronge a potential to sell into the large Southern US oil and gas plays.”
The acquisition is at arm’s length and contemplates an initial payment of US$50,000 upon TSX Venture Exchange approval (the “Approval Date”) of the acquisition, and further payments of (i) US$75,000 upon the earlier of the completion of test drilling and 2 months after the Approval Date; (ii) US$75,000 upon the earlier of the completion of test work and 4 months after the Approval Date; and (iii) a final payment of $US1,800 per acre less prior payments made (or approximately $736,000) is due to the vendor 18 months after the Approval Date.
The acquisition remains subject to the approval of the TSX Venture Exchange. A finder fee of 7% cash will be payable on the acquisition.
About La Ronge Gold Corp.
La Ronge is a Vancouver-based resource growth and development company. The Company has acquired a 22% equity stake in Canfrac Sands Ltd. CanFrac Sands is a private company producing frac sand in the Western Canada Sedimentary Basin. The operation, located near Lloydminster, Saskatchewan, currently sells into the Canadian frac sand market. The Company also owns high-grade gold deposits in the La Ronge Gold Belt, northern Saskatchewan. La Ronge also holds other gold projects located in Ontario and Saskatchewan.
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 this Release.
This News Release includes forward-looking information and statements, which may include, but are not limited to, information and statements regarding or inferring the future business, operations, financial performance, prospects, and other plans, intentions, expectations, estimates, and beliefs of the Company. Information and statements which are not purely historical fact are forward-looking statements. Forward-looking information and statements involve and are subject to assumptions and known and unknown risks, uncertainties, and other factors which may cause actual events, results, performance, or achievements of the Company to be materially different from future events, results, performance, and achievements expressed or implied by forward-looking information and statements herein. Although the Company believes that any forward-looking information and statements herein are reasonable, in light of the use of assumptions and the significant risks and uncertainties inherent in such information and statements, there can be no assurance that any such forward-looking information and statements will prove to be accurate, and accordingly readers are advised to rely on their own evaluation of such risks and uncertainties and should not place undue reliance upon such forward-looking information and statements. Any forward-looking information and statements herein are made as of the date hereof, and except as required by applicable laws, the Company assumes no obligation and disclaims any intention to update or revise any forward-looking information and statements herein or to update the reasons that actual events or results could or do differ from those projected in any forward-looking information and statements herein, whether as a result of new information, future events or results, or otherwise, except as required by applicable laws.
Rasool Mohammad, B.Sc. (Mining)
President & CEO
604 685-3765 (FAX)