Select Sands to Acquire Producing Processing Plant Near Sandtown Silica Sands Deposit, Ark.
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Select Sands Corp. has entered into an asset purchase agreement (APA) whereby Select Sands will buy certain assets of Tutle Holdings. The assets to be acquired include a permitted and producing wet processing plant, equipment and related assets, all nearby its Sandtown silica sands deposit in Arkansas, USA.
Select Sands will pay Tutle US $475,000 in cash and US $75,000 in Select Sands common shares for a total purchase price of US $550,000.
In June 2015, Tetra Tech completed a mineral resource estimate and preliminary economic assessment (PEA) report which concluded the initial capital cost for a processing facility to produce Tier 1 sand from the Sandtown deposit was estimated to be US $42.3M, of which the wet processing plant costs were estimated to be US $11.47M.
Tutle Holdings, (Tutle & Tutle Trucking), who owns the plant, is the largest frac sand trucking company in the United States providing “last mile trucking” to the wellhead in all major oil and gas markets in the United States. “We are pleased to complete this initial transaction with Select Sands and to take a small equity position in the company. We expect the company will quickly become a player in the market and look forward to working with Select Sands in the future,” said Paul Tutle, CEO of Tutle Holdings.
“This acquisition is expected to lower production costs of our 40/70 and 100 mesh silica sand products and better position the company to service the growing demand in the oil and gas markets. We are very pleased to be working with Tutle, a well-respected company, which is additionally positioned to benefit from marketing and growing our customer base for our tier 1 Northern White silica sand products,” said Rasool Mohammad, president and CEO of Select Sands.
The wet processing plant is currently being contracted by Select Sands to produce Northern White 40/70 and 100 mesh silica sand products with daily capacity of 1,500 tons per day. The wet processing plant includes feed hopper, conveyor, classifiers, cyclones, and control building and is optimized to increase its daily capacity at minimal cost as needed.
About Select Sands
Select Sands’ Sandtown property, located in northeast Arkansas, USA, is underlain by the Ordovician St. Peter sandstone formation, which is a major source of ‘Ottawa White’ Tier-1 frac sand/industrial sand selling into major US oil and gas basins as well as industrial and specialty end markets. The Sandtown property is located 3.1 miles from Highway 167 near a natural gas pipeline. The property has an active power line on the property and is located approximately 14.7 miles from the nearest rail system. Compared to competitive sand mines located in Wisconsin owned by the largest US frac sand producers, Sandtown has a competitive location advantage as it is approximately 650 rail miles closer to the Texas/Louisiana oil/gas plays as well as the Houston port and industrial hub.
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