North America Frac Sand, Inc. Notice of Retraction
VANCOUVER, British Columbia, Dec. 23, 2015 (GLOBE NEWSWIRE) -- North America Frac Sand Inc. (“NAFS” or the “Company”) (OTCQB:NAFS) (www.NAFSINC.ca). As a result of a review by the Alberta Securities Commission (“ASC”) we are clarifying certain disclosures made on September 9, 2015, October 15, 2015 and on December 17, 2015 (the “News Releases”). In these News Releases, we incorrectly announced the acquisition of North America Frac Sand (CA) Ltd. and used erroneous terminology in describing its 30,000 acres of mineral leases that are estimated to contain a significant quantity of reserves, resources, potential reserves and potential resources. The Company also incorrectly announced that the site was the largest single location of frac sand in North America and also announced that the site was the largest single location of frac sand in the World. The ASC has not approved or disapproved the contents of this news release.
Firstly, the Company was not compliant with NI 43-101, in that the estimates disclosed in the News Releases, and in the Company’s website (through the Green Engineering Report) were not in compliance with NI 43-101. The terms “potential reserves” and “potential resources” are not defined in NI 43-101 and these estimates must be disregarded as they are restricted disclosure. Consequently, the Company retracts all claims of estimates and retracts all claims as to the relative size of the resource in relationship to other locations in North America and the World. Furthermore, the Green Engineering Report has been removed from the Company’s website.
Secondly, the Company does not own the 30,000 acres of mineral leases until it closes on the acquisition of North America Frac Sand (CA) Ltd. The Company requires an audit of North America Frac Sand (CA) Ltd. by a qualified auditor before it can close on the acquisition. In the event that the audit of North America Frac Sand (CA) Ltd. is not completed by February 29,2016, then the acquisition will not be completed unless extended by mutual consent.
There has been significant exploration activity on 1,680 acres of the 30,000-acre property. The Company does not have an estimate of mineral resource and the current owner of North America Frac Sand (CA) Ltd. is Canadian Sandtech Inc. (“CSI”). Since 2008, CSI has drilled 173 holes. All holes were 300-foot spacing, except for 7 drill holes and 17 backhoe holes, which were 600-foot spacing. The average sand thickness per hole was 10.5 feet and the size of the tested area was approximately 12.9 million square feet. With respect to frac sand, there are approximately 75 lbs of frac sand per cubic foot. A summary of the exploration activity is as follows:
In August to October 2008:
CSI identified the property and determined that the sand qualities warranted further testing and;
CSI entered into lease agreements.
CSI tested 107 holes backhoed under the supervision of Independent Engineer Green Engineering Ltd. ("GEL) and;
CSI determined that significant quantities of suitable sand were present and that additional testing from an Independent engineer was required.
November – December 2009
CSI core drilled 66 holes under the supervision of Independent Engineer GEL and;
CSI began lab testing of core samples.
Saskatchewan Government confirmed CSI’s sand deposit (frac sands) fall under “Sand and Gravel” and are the property of the surface right holder. No disposition under the Quarry Regulations, 1957 was required to exploit the frac sand deposit.
November 2010 – January 2013
Further laboratory testing was conducted by SGS & Met Solve Labs and;
Results determined the sands tested passed American Petroleum Industry (API) standards.
January 2013 – Current
CSI began gathering production data, plant design and cost, financial data and compiled other data to assist in the preparation of a NI 43-101 report required for additional financing.
In the Report prepared by GEL dated December 15, 2014, GEL reported that GEL was retained by CSI to:
Observe sand mineral exploration excavation work completed by CSI in the winter of 2011 on a potential frac-sands industrial property, the “Eagle Creek Property” (the “target property”), on land located 30 kilometers west of Saskatoon, Saskatchewan:
Thirteen (13) back-hoe holes were located to obtain 60 lb pails of sand to send to SGS laboratories for floatation process testing, including the crush testing of floatation quartz sand concentrate and:
Thirty-one (31) back-hoe holes were located as mineral exploration holes at location on lease/optioned land on the target property where sand mineral could be expected to exist.
On samples taken from the target property, observe any laboratory testing at CSI’s facility in Saskatoon, Saskatchewan, including screening and crush testing and;
To provide a report with results of this field and laboratory work.
The summary report prepared by GEL indicated that of the 24 holes excavated, logged and sampled during mid-February 2011, that the holes were placed on a nominal 600 ft. spacing in a search for more sand mineral. All sample containers were sealed and retained by GEL.
Four composite samples were mixed and one single sample retained. These were placed in sample pails weighing 60 lb. each and were sealed by D. Green, PEng of GEL and sent to SGS laboratories. D. Green, PEng observed the laboratory testing at the CSI facility.
Further sampling was done in April 2012 on the target property and 5 composite samples were placed in sample pails sealed by D. Green, PEng and sent to Met-Solve Laboratories. Met-Solve processed the sand with acid treatment and scrubbing.
The following indicated the quality of the sand on tests conducted by Met-Solve:
The CSI crush test of floatation concentrate for -40/+70 size sand tested at average of 5.5% fines (3 tests) less than the 8% suggested maximum fines (API RP-56 standard).
SGS also crush tested the -40/+70 sample (1 test) and achieved 8% fines and;
SGS also crush tested a floatation concentrate -70/+140 sample (1 test) and achieved 4.4% fines which is less than 5.5% suggested maximum fines (API RP-56 standard).
Visually in a hand-held magnifier,
the sand mineral’s quartz was in the rage of 80%-95%, and;
spherical/ovaloid for all sand examined, within the range that likely could be floatation concentrated for the -40/+70 and -70/+140 sieve sizes and possibly for the -20/+40 size.
Met-Solve Laboratories/Stim-Labs Testing resulted in the following results:
For the size fraction -20/+40% fines test result: 9.8% (meets 14% for API RP-56)
For the size fraction -30/+50% fines test result: 4.6% (meets 10% for API RP-56)
For the size fraction -40/+70% fines test result: 7.2% (meets 8% for API RP-56)
In this report, GEL categorized estimated tonnages of mineral sand. These estimates were used in the News Releases. These tonnage estimates did not meet the requirement of NI 43-101 guidelines and should be disregarded.
About Green Engineering Ltd.: The Company has employed Donald Green, PEng., a consultant to the Company, to assist in the preparation and supervision of the technical information in this news release as per Section 3.1 of NI 43-101.
About Frac Sand: Frac Sand is a proppant used in the oil and gas business as a part of the hydraulic fracturing process – a means of increasing flow to the wellhead. Frac sand must have particular characteristics including achieving certain levels of crush resistance, sphericity, roundness and conductivity and it is therefore a relatively rare commodity.
CONTACT: North America Frac Sand, Inc. (OTCQB:NAFS)
Should you wish to receive Company news via email, please email at firstname.lastname@example.org and specify “North America Frac Sand” in the subject line.
Forward-Looking Information: This news release contains certain forward-looking information. All information, other than information regarding historic fact that addresses activities, events or developments that the Company believes, expects or anticipates will or may occur in the future is forward-looking information. Forward-looking information contained in this news release includes, but is not limited to, the ability of the Company to continue selling frac sand in the future, on a spot basis or otherwise. The forward-looking information contained in this news release reflects the current expectations, assumptions and/or beliefs of the Company based on information currently available to the Company. With respect to the forward-looking information contained in this news release, the Company has made assumptions regarding, among other things, future prices for frac sand and by-products, future demand for processed frac sand and the ability of the Company to restructure its debts. The forward-looking information contained in this news release is subject to a number of risks and uncertainties that may cause actual results or events to differ materially from current expectations, including the general volatility of frac sand and by-product prices and demand, geological, technical, drilling and processing problems, future currency and interest rates, an unwillingness of the Company’s lenders to refinance the Company’s debts on terms favourable to the Company or at all and the ability of the Company to continue selling frac sand. Additionally, if the Company is unable to obtain additional financing, the Company may be required to curtail activities and/or liquidate its assets or the Company’s creditors may seek to seize its assets. Any forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable law, the Company disclaims any obligation to update or modify such forward-looking information, either because of new information, future events or for any other reason. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.
Hedging programs that E&Ps have in place in 2016 vary considerably. The chart below shows the range of oil and gas production for several E&Ps covered by hedging contracts. Pioneer Natural Resources (ticker: PXD) and Cimarex Energy (ticker: XEC) have hedged the largest portions of their remaining production at 85/75 and 80/90 percent, respectively, for oil and gas. This chart[Read More…]
Oil & Gas 360® c/o EnerCom, Inc.
800 18th Street
Denver, CO 80202
Advertise on OAG360
OAG360 has multiple advertising opportunities. Reach your investors/buyers by advertising on the website, eMail campaigns, webcasts and videos.