Duvernay Silica Sand
Location
Athabasca County, Alberta
Access
Primary and Secondary Highway Access
Description
AMI Silica, together with our geological partner, has identified a premium quality silica sand resource in the Athabasca region. As identified in the NI 43-101 technical report, there is a large resource of silica sand of 30 million tonnes.
In collaboration with a pending industrial partner, a competitive tender has been issued to five pre-qualified contractors in both Canada and the United States to bid on the Front-End Engineering & Development (FEED). When the project is fully sanctioned and permits are in place, the contract may be converted to an EPC (Engineer, Procure, Construct) contract. The current schedule aims to complete the FEED study in the second half of 2020. Based on the unique synergies with the pending industrial partner, AMI Silica aims at developing the ‘greenest’ silica sand processing facility in North America. Sand products and by-products will serve customer demand in the energy, construction materials and environmental remediation sectors.
In addition, AMI Silica has also secured an offtake agreement with Shell to provide premium quality domestic silica sand from the Duvernay Project. It is anticipated that the Agreement with Shell will serve to commercialize AMI Silica’s in-basin strategy in the Duvernay and Montney plays. The Agreement is underpinned by a committed volume requirement that de-risks AMI’s corporate and project financing options at an improved cost-of-capital.
The Shell Agreement carries a five-year term commencing on the later of mid-2021 or 30 days after the Duvernay Project facility has been commissioned. The Agreement allows Shell to procure a minimum volume of silica sand over five years or up to an annual maximum of frac sand that represents the majority of the Duvernay Project’s stated capacity.
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.