Duvernay Sand Project
Development
About
The Duvernay Sand Project is strategically located in Northeastern Alberta near
the Duvernay Basin with rail and road access to markets. The project will offer a Canadian-based solution with comparable premium quality sand, at a reduced
cost, versus a US-sourced product. This is a win-win for the Canadian market
in the face of dwindling global silica sand supply.
Recent Updates
Offtake Agreement with Shell
- Five-year term with minimum volume of frac sand over five years or up to an annual maximum of frac sand
Collaborating with International Industry Partner
- Unique synergies to co-develop one of the ‘greenest’ silica sand facilities in North America
- industrial land suitable for construction;
- access to industrial utilities, including process water and power opportunities that bring distinctive environmental benefits;
- access to transportation infrastructure that will broaden the economic distribution of product across Alberta and into Northeast British Columbia;
- additional premium domestic sand deposits located in close proximity to the proposed industrial location, clear of residential areas; and
- long-term employment, support for local businesses, and a more substantial, diverse tax base for the province and local economy.
Front-End Engineering and Development (FEED)
- FEED Completion first half of 2021
- Operational target in the first half of 2022 is subject to approved amendments to existing industrial licenses, regulatory approval for nearby sand deposits, and ratification of commercial operating agreements.
- Estimated 800,000 tonnes/year silica sand facility
Acquisition of 100% Interest In Duvernay Sand Resources(FEED)
- In February 2021, acquired remaining 50.4% for 100% interest
- Purchased for eight million AMI shares payable in three installments
Next Steps
- Mine and facility permitting
- Fully Sanction Financial Investment Decision (FID)
Development
Sand Properties
Market Analysis
NI 43-101 Technical Report
Open House Report
AMI Duvernay Sand
Duvernay Sand Project
Sand Properties
Frac sand is quartz sand that must be small, uniform particles that are
very well rounded, extremely hard and uniform. These properties
allow the sand to perform under very high pressure to increase
productivity in oil and gas wells.
AMI Duvernay Sand
Development
Sand Properties
Market Analysis
NI 43-101 Technical Report
Open House Report
Competitor 1
Competitor 2
Wisconsin – benchmark
Duvernay Sand Project
Market Analysis
Prior to the global COVID-19 pandemic, there remained a positive growing demand for premium quality silica sand in Western Canada. While the economic crash of the energy commodities market may have deferred demand, the need for gas and oil well proppant will still remain.
Development
Sand Properties
Market Analysis
NI 43-101 Technical Report
Open House Report
Source: AltaCorp, BMO, CIBC, Cormark, GMP, Peters and Company estimates
The Duvernay Sand Project will offer a Canadian-based solution with comparable premium quality, at a reduced cost, versus a US-sourced product. This is a win-win for the Canadian market in the face of dwindling global silica sand supply.
The Duvernay Sand Project offers a more efficient and greener logistics solution with reduced costs and risks versus US imported sand
Montney In-Basin Silica Sand
Location
Northwest Alberta and Northeast British Columbia
Access
Primary and secondary highway access
Size
Over 150,000 contiguous hectares
Description
AMI Silica, together with our geological partner, owns the Montney In-Basin Silica Sand Project in the vicinity of Dawson Creek, Alberta and Fort St John, British Columbia. This Project broadens the strategic growth and advancement of AMI Silica to become the ‘in-basin’ leader for the supply of premium domestic silica sand. AMI Silica has completed certified testing (STIM-LAB Inc. and Loring Laboratories Ltd.) on a 70/170 domestic sand sample with the following results:
| sphericity | 0.7 |
| roundness | 0.6 |
| acid solubility | 2.3% |
| Silicon Dioxide (SiO2) content | 98.5% |
| crush value | 8K |
These preliminary results indicate that the Montney In-Basin Project sand aligns with the specifications for sands used in hydraulic fracturing (API Standard 19C).
The Montney basin represents over 50% of the entire frac sand demand in Canada. In late 2019, AMI completed its first phase of delineation drilling for its proposed Montney In-Basin Premium Quality Domestic Sand Project. The Montney Silica Sand Delineation & Development program is being re-adjusted for cashflow management purposes, in relation to concurrent demands related to the Duvernay Project. Together with its existing joint-venture (JV) partner, the parties are taking a measured approach concerning expenditures in order to confirm the most suitable and cost-effective location for development within the 150,000 hectare area in which the JV holds mineral leases.
Firebag Silica Sand
Location
North of Fort McMurray, Alberta within the Wood Buffalo region of North East Alberta
Size
80 acres approved, 420 acres in application
Resource Estimate
Per the NI 43-101, the Athabasca Firebag Project has an indicated resource of 38.2 million tonnes with the following breakdown of products:
-
- 4.5 million tonnes of 20/40
- 19.3 million tonnes of 40/70
- 13.4 million tonnes of 70/140
- 1.0 million tonnes of 140/170
AMI Silica’s Firebag Project is located 95 km north of Fort McMurray, Alberta and is accessible via Highway 63. The planned operation is expected to produce industrial proppants for use in the hydraulic fracturing of oil and gas wells. Independent testing by both Stim Lab and Proptester confirmed a high-quality product with crush strength meeting or exceeding American Petroleum Institute and International Standards Organization standards for proppant.