April 3, 2021 – HOUSTON, TEXAS, USA – Select Sands Corp. (“Select Sands” or the “Company”) (TSXV: SNS, OTC: SLSDF) provides the following update on its corporate activities for the first quarter of 2021.
The Company sold 53,009 tons of frac and industrial sand during Q4 2020, compared to 49,248 tons in Q3 2020.
Based on current and expected market conditions, the Company anticipates sales volumes of frac and industrial sand of between 55,000 to 65,000tons for Q1 2021.
RENEWAL OF LINE OF CREDIT
The Company is pleased to announce that it has successfully renewed its USD $5 million line of credit loan agreement (the “ Line of Credit ”) with repayment to now occur on February 20, 2022. Interest payable on the Line of Credit will be fixed at 4.75% for the new term. The Company currently owes USD $4.4 million on the Line of Credit. The Line of Credit is now secured by a second mortgage on the Company’s assets of USD $1.75 million in addition to the existing security agreement. Proceeds from the Line of Credit are being used to fund the Company’s working capital.
WINTER STORM IMPACT ON OPERATIONS
The Company announces that due to the recent winter storm in February 2021, the Company has received an unusually large invoice for its February 2021 natural gas consumption. The Company has a supply agreement with a natural gas company for the supply of natural gas to its sand processing plants in Arkansas. The supply agreement stipulates that the Company will be charged for a minimum usage at market rates each billing period, even if the Company does not consume the minimum usage.
During the month of February 2021, the Company’s operations in Arkansas where hit by a severe winter storm. During this time, the Company was forced to cease operations. As a result of the storm and the extended period of extremely low temperatures, physical gas and power infrastructure was severely impaired. Specifically, well-head freeze-offs occurred, and gas processing plants and pipelines failed. This resulted in reduced natural gas supply and limited the ability to distribute and deliver natural gas on the system. At the same time, demand for natural gas was higher than normal due to increased heating demand during the extremely cold weather. This considerable increase in demand, coupled with a severe reduction in supply, resulted in extremely high natural gas market prices during the period of the storm.
As a result of this winter storm event, the Company received a bill for its February 2021 natural gas consumption of USD $373,043 where the bill was only USD $49,548 in February 2020. The Company did not consume any natural gas during the winter storm, because it was unable to operate due to the storm. Furthermore, the Company received a notice to curtail its natural gas consumption from its natural gas supplier during this same period and yet was still charged for the minimum monthly usage. As a result of the foregoing, the Company is disputing the amount of the February 2021 invoice. The natural gas supplier has agreed not to interrupt supply while the Company goes through the dispute process. The Company is currently seeking legal advice with respect to this matter.
2020 YEAR-END AUDIT UPDATE
The Company also advises that the February winter storm has delayed its year-end audit and the Company will be releasing it 2020 year-end audited consolidated financial statements towards the end of April 2021. The Company’s filing deadline for its financial statements 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 and related production facilities located near Sandtown, Arkansas. Select Sands’ goal is to become a key supplier of premium industrial silica sand and frac sand to North American markets. Select Sands’ Arkansas properties have a significant logistical advantage of being significantly closer to oil and gas markets located in Oklahoma, Texas, Louisiana, and New Mexico than sources of similar sands from the Wisconsin area. Select Sands’ also operates a transload facility in George West, Texas in Live Oak County that serves customers operating in the Eagle Ford Shale Basin. The facility has a capacity for 180 rail cars and is equipped with two offload/loading stations with dedicated silos for a high throughput capacity.
The Tier-1 reference above is a classification of frac sand developed by PropTester, Inc., an independent laboratory specializing in the research and testing of products utilized in hydraulic fracturing and cement operations, following ISO 13503-2:2006/API RP19C:2008 standards. Select Sands’ Sandtown project has NI 43-101 compliant Indicated Mineral Resources of 42.0MM tons (TetraTech Report; February, 2016). The Sandtown deposit is considered Northern White finer-grade sand deposits of 40-70 Mesh and 100 Mesh.
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. The forward-looking statements in this press release relate to comments that include, but are not limited to, the intended use of proceeds of the Line of Credit, statements related to expected current and future state of operations, sales volumes for 2021, the long-term impact of the February 2021 winter storm and the anticipated filing date of the Company’s financial 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.
Please visit www.selectsandscorp.com or call:
President & CEO
Phone: (844) 806-7313
INVESTOR RELATIONS CONTACT
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 this release.