ENP Newswire -
Release date- 15082014 -
Construction and refurbishment of the Company's dry frac sand processing plant in
During the commissioning period and until
To the end of
Total sales for the six months ended
Sales revenue totalled
Cost of goods sold during the second quarter was
Finished goods inventory at
Finished goods inventory as at
As a result, the Company incurred a loss on sales of
After general and administration, financing and amortization expenses and taxes, the Company incurred a net loss of
For the Quarter ended
The 7P plant is now operating well on a 12-hour-per-day, 7-day-per-week basis and producing at a rate of approximately 4,000 tons per week. As a result of a recent sales contract (see press release dated
The fourth and final production crew will be added as soon as sales justify the increased staffing. This is expected during the third quarter of 2014.
'We are pleased with the ramp up in frac sand production since commissioning began in March,' said
'With the completion of commissioning, Phase 1 of
Phases 2 and 3 will bring the eventual production target to 1,500,000 tons of frac sand per annum and are expected to improve these margins. On completion of all three phases, cash flow is expected to exceed
'The Company's focus over the past several quarters on establishing a presence in the frac sand market is in part to prove the value of the substantial NI 43-101-compliant frac sand resource at our
About Victory Silica
Victory Silica is a wholly-owned subsidiary of the Company and is charged with a phased plan to establish the Company in the frac sand market. In Phase 1, the Company has begun sales of premium quality mid western white frac sand from the 7P Plant by shipping partially-processed sand purchased in
The 7P Plant is well located in an area populated with fracking companies, its potential customers, and is within only a few hours' trucking distance of major oil or gas play well sites. Phase 2, which includes the construction of a frac sand wash plant in
In Phase 3, Victory Silica has identified a site in
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 and roundness, and it is therefore a relatively rare commodity. Vast quantities of frac sand are consumed, and more is needed all the time, as shale gas and oil plays in
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 may not be limited to the progress and success of the Company's projects, including the Company's goals and business plan with respect to the frac sand business and the future demand for frac sand.
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, the Company's future working capital requirements, the Company's ability to generate sufficient cash flow from operations and access existing credit facilities and capital markets to meet its future obligations, goals and business plan, future prices for frac sand and by-products and future demand for processed frac sand.
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 need to obtain required approvals and permits from regulatory authorities, the volatility of frac sand and by-product prices and demand and geological, technical, drilling and processing problems.
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
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