Athabasca Minerals (AMI) is to acquire strategic sand assets in the US from what it calls an independent arms-length vendor.
In support of the acquisition, JMAC Resources has agreed to purchase 7,375,000 AMI common shares at a price of $0.20 per Share for gross proceeds of C$1,475,000 in a non-brokered private placement.
AMI Silica, a 50%-owned subsidiary ofAMI, will complete the deal. The other half of AMI Silica is owned by JMAC Energy Services. Both JMAC Resources and JMAC Energy are controlled by Jon McCreary, a director of the corporation. Upon closing of the acquisition, each of AMI and Jon McCreary will hold an indirect 50% interest in the strategic assets.
AMI says the assets are comprised of real-estate, an operational sand mine and processing plant capable of up to two million tonnes production per year, fixed storage, two rail transloads (including unit-train capability) and mobile equipment.
The assets also include active supply chain contracts including rail cars, for cash consideration of US$1 million (approximately C$1.2 million) and the assumption of reclamation liabilities of approximately US$6.4 million.
The acquisition is expected to be a step forward for AMI Silica which is currently managing the assets under an operations agreement.
AMI CEORobert Beekhuizensays: “This strategic acquisition is part of the corporation’s planned growth and will expand AMI’s portfolio to include both US and Canadian resources and assets and will bring a new source of revenue to AMI. We see this targeted acquisition as a strategic bookend complementing AMI’s Prosvita Sand Project in Alberta. It has a proven supply chain with a history of product delivery to destinations across Alberta, British Columbia and select locations in the United States. We are very familiar with the assets being acquired, having had hands-on experience successfully managing and operating them for the past five months. We’re fully staffed and ready for a smooth transition, and excited to on-board new team members to the AMI family. We also look forward to serving our customers and community stakeholders with excellence and integrity.”
