Stock Syndicate Select Sands Report June 2016

SYNDICATE REPORT ON SELECT SANDS CORP.
June 1st, 2016
Issued &
Outstanding
54,599,254
Warrants
8,588,416
Options
4,482,833
Fully Diluted
Ave Daily Volume
Market Cap ($0.28)
Cash
TSX Venture Symbol
OTC Symbol
67,670,503
71,391
$15.3 mill
$3 mill
SNS
CLICF
Silica Sand from Sandtown Project: 99% SiO2High roundness and high sphericity
INVESTMENT THESIS:
Intrinsic Value, Meet Production
Select Sands Corp. (TSX Venture: SNS.V, OTC:
CLICF) is developing a high quality “Tier 1” grade
commercial silica deposit called Sandtown in
Arkansas, USA with plans to ramp up service to
industrial and energy markets. The prime location
of Sandtown is a key factor for the logistical
advantage, with the property close to fracfriendly shale producers, and shipping hubs for
industrial customers.
“ Our aim is to be a profitable
business and it will take about
100,000 tons a year sale to cover our
SG&A. Our current capacity is about
600,000 tons per year but we can
certainly expand that when the time is
right. We believe at some point in
next year or two, we could probably
increase our capacity to 1.5 to 2
million tons per year.”
~ Ras ool M oham ma d, Pre sid ent
& C E O, Trad ers Board room
interv iew with Joe Bleak ley ,
M arch 8, 20 16
This is an exciting time for a $15 million market cap company, and the charts are indicating as much.
As per the June 2015 PEA, the Pre-Tax Net Present Value (NPV) of the Sandtown property is
estimated at US $160 million (8% discount rate), with an impressive 45% pre-tax IRR. The current
resource model estimates a Life of Mine of 16 years. It’s important to note, the PEA was completed
on only 40% of the drilled property, or 200 acres of the 520 acre property. Select Sands has done the
lions’ share of the dirty work on the way to full scale production, and now it’s time to watch the show.
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SYNDICATE REPORT ON SELECT SANDS CORP.
June 1st, 2016
With over $3 million in cash, monetization underway of gold assets (429,100 ounces of Au in
Saskatchewan Canada), no debt, a large, high quality, permitted Sand quarry in the USA, Select
Sands is hitting the radar on many a screen.
Why We Added Select Sands to the Portfolio
FLAGSHIP: Select Sands has a
very high quality asset that is
already in production. High purity
silica at Sandtown (99% SiO2) is
toll milled and turned into Whole
Grain silica products for sale to
Energy (oil and gas), and Industrial
markets. Industrial customers (i.e.
foundries) and specialty end users
(i.e.
solar,
wind
turbine
&
geothermal energy) all comprise
potential markets for Select Sands’ end product, as well as the close proximity shale
properties. Sandtown is only 3 miles to a major highway and infrastructure in place. They enjoy
a huge proximity advantage over their Wisconsin sand competitor: Sandtown is over 650 rail
miles closer to Texas, Louisiana and Oklahoma shale plays which saves $15/t in transport
costs.
SANDTOWN, Arkansas USA
Indicated Silica Sand Resource of 41.98 Million Tonnes grading 13% of 30/50 mesh, 32%
40/70 mesh and 58% 100 mesh. Life of mine revenues US $767 million.
DEMAND:
industrial
Global
sand
demand
will grow to approximately
291 million metric tons in
2018, with
a value of
$12.5 billion. Sandtown is
targeting 865,000 tons of
commercial silica product
a year and can scale up
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SYNDICATE REPORT ON SELECT SANDS CORP.
June 1st, 2016
when the time comes. To give further context to the opportunity, one Industrial buyer might be
in the market for between 24,000-240,000 tons a year.
POSITIVE ECONOMICS: The PEA was based on only 40% of the drilled project, and shows a
high IRR of 45%, (pre tax) NPV at 8% of $160 million- Production has commenced for their
first industrial customers and
the company is in ramp-up
sales mode; contracts in the
pipeline should start to create
many exciting news catalysts.
CASHED UP: Monetization of
their prime gold assets from a
previous incarnation (formerly La Ronge Gold Corp) is underway with Comstock Metal’s
proposed acquisition in exchange for 20 million post-consolidation common shares in the
capital of CSL.V. The company is cashed up with over $3 mill in the till already and more to
come if this plays out as we hope and expect.
THE TEAM: The team has depth in talent and
experience, lead by President & CEO Mr. Rasool
Mohammad, a mining engineer with over 20
years
experience
in
the
biz
for
sizeable
companies such as BHP and Miramar Mining;
the board is Chaired by Mr. Arnold Tenney, a
public company expert who has overseen many
diverse businesses and even served as a
Director for Mr. Carl Icahn’s Phillip Services Inc.,
a metals recycling company. We have faith in
this team’s ability to finance this property to full
scale production.
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SYNDICATE REPORT ON SELECT SANDS CORP.
June 1st, 2016
Technical Analysis
Technically speaking, Select Sands is straddling its 200-Day Moving Average (Weekly) seen
below. You’ll also notice that the RSI and the MACD have also both turned positive in the past
week. The blue lines indicate a textbook Fibonacci retracement to the .225 level, which is a
positive indicator that the correction from the high .40’s might be done, and an ascent up is
looking more and more possible if the indicators stay on our side.
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SYNDICATE REPORT ON SELECT SANDS CORP.
June 1st, 2016
About Silica Sand
North American demand for silica
sand is predicted to increase at a
faster annual pace than any other
regional market. US and Canada
will lead the way with regional
growth,
hydraulic
driven
by
expanding
fracturing
segments.
Resurgence of strength in the US
oilfields will boost demand for sand
proppants, alongside increases in
the number of fracturing stages per
well.
Excerpts below taken from the
National Industrial Sand
Association
Silica is the name given to a group
Select Sands Finished Product from June 2016
of minerals composed solely of silicon and oxygen, the two most abundant elements in the
earth’s crust. In spite of its simple chemical formula, SiO2, silica exists in many different
shapes and crystalline structures. Found most commonly in the crystalline state, it also occurs
in an amorphous form resulting from weathering or plankton fossilization. For industrial and
manufacturing applications, deposits of silica yielding products of at least 95% SiO2 are
preferred.
Oil and Gas Recovery: Known commonly as proppant, or “frac sand,” industrial sand is
pumped down holes in deep well applications to prop open rock fissures and increase the flow
rate of natural gas or oil. In this specialized application round, whole grain deposits are used
to maximize permeability and prevent formation cuttings from entering the well bore. Silica’s
hardness and its overall structural integrity combine to deliver the required crush resistance of
the high pressures present in wells up to 2,450 meters deep. Its chemical purity is required to
resist chemical attack in corrosive environments.
Glassmaking: Silica sand is the primary component of all types of standard and specialty
glass. It provides the essential SiO2 component of glass formulation and its chemical purity is
the primary determinant of color, clarity and strength.
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SYNDICATE REPORT ON SELECT SANDS CORP.
June 1st, 2016
Construction: Industrial sand is the primary structural component in a wide variety of building
and construction products. Whole grain silica is put to use in flooring compounds, mortars,
specialty cements, stucco, roofing shingles, skid resistant surfaces and asphalt mixtures to
provide packing density and flexural strength without adversely affecting the chemical
properties of the binding system.
Paint and Coatings: Paint formulators select micron-sized industrial sands to improve the
appearance and durability of architectural and industrial paint and coatings. High purity silica
contributes critical performance properties such as brightness and reflectance, color
consistency, and oil absorption.
Metal Casting: Industrial sand is an essential part of the ferrous and non-ferrous foundry
industry. Metal parts ranging from engine blocks to sink faucets are cast in a sand and clay
mold to produce the external shape, and a resin bonded core that creates the desired internal
shape.
Metal Production: Industrial sand plays a critical role in the production of a wide variety of
ferrous and non-ferrous metals. In metal production, silica sand operates as a flux to lower the
melting point and viscosity of the slags to make them more reactive and efficient.
Chemical Production: Silicon-based chemicals are the foundation of thousands of everyday
applications ranging from food processing to soap and dye production. In this case, SiO2 is
reduced to silicon metal by coke in an arc furnace, to produce the Si precursor of other
chemical processes
Ceramics & Refractories: Ground silica is an essential component of the glaze and body
formulations of all types of ceramic products, including tableware, sanitary ware and floor and
wall tile.
Filtration and Water Production: Industrial sand is used in the filtration of drinking water, the
processing of wastewater and the production of water from wells.
Recreational Products: Industrial sand even finds its way into sports and recreation. Silica
sand is used for golf course bunkers and greens as well as the construction of natural or
synthetic athletic fields.
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SYNDICATE REPORT ON SELECT SANDS CORP.
June 1st, 2016
Disclaimer
This report was not paid for, however we are shareholders and have served as advisory to Select Sands Corp. This
report should not be construed as investment advice and please ensure you do your own due diligence when
considering a trade or investment. Risk would be considered very high for any stock trading on a venture exchange.
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References
https://www.sfsa.org/meetings/spring12/Sand%20Market.pdf
http://www.selectsandscorp.com/
http://www.selectsandscorp.com/wp-content/uploads/2016/04/SNS-CorpPPT.pdf
https://tradersboardroom.com/2016/03/08/snsinterview/
http://www.freedoniagroup.com/DocumentDetails.aspx?ReferrerId=FG-01&studyid=3237
http://www.sand.org/what-is-industrial-sand
http://www.verdazo.com/blog/frac-analysis-in-visage-how-adding-more-stages-impacts-gas-production/
http://www.reuters.com/article/us-ussilica-demand-idUSKBN0HE12P20140919
http://www.pitandquarry.com/global-demand-for-silica-sand-reported-to-increase/
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