La Ronge Signs Definitive Agreement to Acquire a Producing Frac
Sand Asset in Western Canada Sedimentary Basin
VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 5, 2014) - La
Ronge Gold Corp. ("La Ronge" or the "Company") (TSX-VENTURE:LAR) is
pleased to announce that it has signed a definitive agreement to
acquire the assets and business of Canfrac Sands Ltd., a private
company producing and selling frac sand in the Western Canada
Sedimentary Basin. Frac sands are a proppant used in hydraulic
fracturing (fracking/fracing) of oil- and gas-hosting rock to keep
fractures open (or "propped") after hydraulic pressure has broken
the host rock to release the oil and gas. Canfrac, whose operations
are located near Lloydminster, Saskatchewan, currently supplies
frac sand to a number of nearby oil-field services companies.
The acquisition is at arm's length and is expected to constitute
a fundamental acquisition. The agreement contemplates a cash
purchase price of $4,500,000, subject to standard industry
adjustments, plus re-imbursement of up to $1,000,000 in certain
pre-approved capital expenditures made by Canfrac prior to the
closing to improve the purchased assets for the benefit of La
Ronge. Pursuant to the Agreement, La Ronge will deliver a
$1,000,000 deposit into trust with Canfrac's lawyers. If La Ronge
terminates the transaction, the deposit will be treated as a break
fee payable to Canfrac in exchange for equity in the amount of 22%
of Canfrac's issued common shares and a nominee to Canfrac's Board
of Directors. If Canfrac terminates the transaction, the deposit
will be returned to La Ronge. In the event that the acquisition is
completed, the deposit will be applied to reimburse Canfrac in the
amount of any pre-approved capital expenditures referred to above,
with any excess returned to La Ronge. Completion of the
transaction, expected on or before June 19, 2014, remains subject
to a number of conditions, including the completion of financing
and the receipt of all necessary regulatory approvals, including
the approval of the TSX Venture Exchange.
Pursuant to the acquisition, La Ronge will conduct a brokered
private placement in two tranches to raise gross proceeds of up to
$7,000,000, with an overallotment option for gross proceeds of up
to an additional $1,000,000. The first tranche will consist of
4,000,000 common shares at a price of $0.25 per common share to
raise gross proceeds of $1,000,000, which will be used to fund the
$1,000,000 deposit payable under the acquisition.
The second tranche will consist of up to 24,000,000 subscription
receipts at a price of $0.25 per subscription receipt to raise
gross proceeds of up to $6,000,000, with an overallotment option
for an additional 4,000,000 subscription receipts for gross
proceeds of up to an additional $1,000,000. Each subscription
receipt will, concurrently with the completion of the acquisition,
automatically convert into a common share of La Ronge. The gross
proceeds of the subscription receipts will be placed into escrow,
for release to La Ronge upon the satisfaction of such condition and
resulting conversion of subscription receipts into common shares.
The proceeds from the subscription receipts will be used by La
Ronge to pay the $4,500,000 acquisition price, to fund further
capital expenditures, and for general working capital.
Canaccord Genuity Corp. has agreed to act as lead agent for the
private placement on a commercially reasonable efforts basis. The
securities issued will be subject to a 4-month hold period from the
date of issue of the subscription receipts. The completion of the
private placement and payment of any commission and fees remain
subject to the receipt of all necessary approvals, including the
approval of the Exchange.
About Canfrac
The Canfrac operation is located approximately 30 km to the
northeast of the town of Lloydminster, Saskatchewan, and 4.8 km
east and 3 km north of Hillmond, SK, in the rural municipality of
Britannia Number 502. The area is highly developed by both the
agriculture and oil industries.
Canfrac currently holds a total of eight quarrying leases with
local freehold landowners, covering an aggregate of 1,440 acres,
granting exclusive rights to explore for and extract frac sands or
sand and gravel deposits on the leased lands. The current quarrying
operations are restricted to one lease known as the "Thompson
lease," although Canfrac's leased properties extend up to 20 km to
the north and east. The property is located on a well-maintained
gravel road and is mostly accessible via paved roads. Power to the
site is currently sourced from the SaskPower electrical grid, and
natural gas is provided to site by the SaskEnergy distribution
pipeline. Water for processing operations is sourced from an
adjacent slough located and supplemented by a water well on
site.
The deposit is described as a glacial till consisting of poorly
sorted silts, very fine to very coarse grain sands, gravels, clay
and silt.
Various types of proppants can be used in hydraulic fracturing,
depending on site-specific conditions. Current products range from
raw natural sand and coated sand to man-made ceramic products. The
criteria for assessing the suitability of natural sand for use in
hydraulic fracturing operations is set out in the American
Petroleum Institute's Recommended Practice 19C and ISO13503-2:2006.
Both standards provide recommended specifications that consider
particle distribution, roundness and sphericity, turbidity, acid
solubility, and crush resistance when assessing a sands potential
for use as a proppant.
Exploration for frac sand began on the property in 2005 by Green
Tree Engineering, a geological consulting company contracted by
Canfrac. The focus of the program at that time was on identifying
sources of -20/+40 mesh sand and resulted in Canfrac signing two
lease agreements. A drill program was carried out on one of the
leases, the Thompson lease, between June 23 and June 25, 2005. The
purpose of the program was to determine the lateral continuity
between the sand observed in trench. In total, 8 bore holes were
drilled and spaced between 60 to 100 metres.
Based on favourable results from the 2005 program, Canfrac
constructed a quarry operation on the Thompson lease. The quarry
began producing a 20/40 mesh frac sand product in 2006. To date,
Canfrac estimates that approximately 458,000 tonnes (of gross wet
product) has been produced. The processing plant is now capable of
producing over 100,000 tonnes/year of a wet gross product comprised
of 16/30, 20/40, 30/50 and 40/70 mesh products, with sales to both
large and small oil-field services companies in the Viking Oil
Field in Alberta and Saskatchewan. Audited financial information
for Canfrac's financial year ended December 31, 2013, indicates
gross sales of $3.28 million on the sale of 32,990 tonnes of frac
sand.
Canfrac has developed a two-staged approach to mining and
processing the deposit. Stage one includes the mining and wet
processing of the raw material to take place from late spring to
early fall. Once the material has undergone wet processing, it is
stockpiled according to size fraction. The second stage involves
dry processing, final size refinement, and shipping to take place
in the winter months using the wet stockpiles collected over the
summer months. The limits of the sand deposit currently being
exploited on the Thompson lease have not been fully defined from
previous exploration programs. Potential exists for the deposit to
extend to the northwest and to the south under the area of the
existing processing plant. In addition, only limited prospecting
and sampling work has been done on the other quarrying leases in
the region.
Readers are cautioned that, although the Thomson lease is in
production, there is no established mineral resource or mineral
reserve for the property, or feasibility study demonstrating
economic and technical viability.
Frac Sand Market
The Freedonia Group Inc. (Freedonia) completed a detailed market
study in 2013 on proppant demand across Canada. Freedonia is a
leading international business research company, founded in 1985,
that publishes more than 100 industry research studies annually.
Their industry analysis provides an unbiased outlook and a reliable
assessment of an industry.
Freedonia indicates that the North American Proppant (frac sand)
demand has risen sharply since 2002, rising from $250 million to
nearly $5 billion in total sales in 2012. This is attributed
largely to the fact that proppants (frac sand) have been critical
to development of unconventional resources such as shale oil and
gas in North America, which has set off a chain of events that is
revitalizing the region's chemical processing and other industries.
Although proppants have been used in oil and gas production for
more than 60 years, the advent of horizontal drilling technology
coupled with multistage hydraulic fracturing created new
opportunities for growth starting around the mid-2000s. Freedonia
expects that overall demand for proppants will reach over 100
billion lbs (45 million tonnes (mmt)) in 2017, with an estimated
value of $9.4 billion (USD), at a selling price of $0.09/lb. The
majority of proppant demand for North America is concentrated in
the United States of America, with demand in 2017 estimated to be
approximately 90 billion pounds (40.9 mmt). Freedonia estimates
that proppant demand for Canada in 2017 will be about 12 billion
pounds (5.44 mmt).
About La Ronge Gold Corp.
La Ronge is actively engaged in diversifying its mining assets
portfolio into sectors other than precious metals. The intent of
this strategy is to identify and acquire strategic investments that
have the capability to generate cash flow with low capital
expenditure costs. This mining asset diversification strategy is
limited geographically to Canada at the present time. La Ronge is a
Vancouver-based resource growth and development company. The
Company owns high-grade gold deposits in one of Canada's emerging
gold producing regions, the La Ronge Gold Belt, northern
Saskatchewan. La Ronge also holds other gold projects located in
Ontario and Saskatchewan.
For more information about La Ronge Gold Corp., please go to
www.larongegold.com.
Cameron Bartsch, M.Sc., P.Geo., of Tetra Tech EBA, a Qualified
Person as defined by National Instrument 43-101, has reviewed the
scientific and technical information disclosed in this News Release
and has approved its dissemination.
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.
FORWARD-LOOKING INFORMATION
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.
La Ronge Gold Corp.Rasool Mohammad, B.Sc. (Mining)President
& CEO604 639-4533604 685-3765www.larongegold.com
(TSXV:LAR)
過去 株価チャート
から 4 2024 まで 5 2024
(TSXV:LAR)
過去 株価チャート
から 5 2023 まで 5 2024