North America Frac Sand, Inc. Announces LOI With Urban Select
North America Frac Sand, Inc. Announces Its Next Proposed Action
Ossian, Indiana--(Newsfile Corp. - April 30, 2018) - North America Frac Sand, Inc. (OTCQB: NAFS) ("NAFS" or the "Company") ("NAFS") has entered into a Letter of Intent ("LOI") with Urban Select to sell 100% of the rights to approximately 29,900 leased acres located in the province of Saskatchewan, Canada, more commonly known as the Eagle Creek Property ("Eagle Creek" or the "Property"). Under the terms of the LOI, Urban will have an exclusive period of up to 60 days of signing the LOI to conduct its due diligence on Eagle Creek. Upon satisfactory due diligence, a Definitive Agreement will be executed pursuant to which Urban Select can acquire the Property in consideration of issuing 20 million common shares of Urban Select to NAFS. It is Urban Select's intention to assign its rights to the Property to a newly incorporated Saskatchewan subsidiary.
The transaction is subject to a number of conditions precedent first being met, including (i) TSX Venture Exchange approval, (ii) NAFS obtaining the approval of its shareholders, if required, and (iii) Urban Select completing a private placement to raise at least $500,000. Upon closing, NAFS Board of Directors shall distribute the Urban Select shares received to enhance its shareholder value.
Joe Kistler, NAFS CEO stated, "This is a great opportunity for NAFS to move the Eagle Creek project forward with an experienced investment management team located in Canada.
As previously announced, 9,130,000 common shares (of the Urban shares received) will be issued to the cash investors of Canadian Sandtech, Inc. The issuance of these shares will be in exchange for the return of and cancellation of 37,800,000 common shares of NAFS being held in escrow. The remaining Urban shares will be distributed (as determined by the Board of Directors)to enhance shareholder value. I am looking forward to bringing additional information and updates."
The Property is located approximately 50km by road northwest of Saskatoon. The Property has been explored for sand that can be used as a hydraulic fracturing proppant.
The Property is the subject of a technical report dated March 13, 2018 as prepared by Norwest Corporation. A copy of such report can be found under NAFS's SEDAR profile. Following Norwest's development of the mineral resource model, an in-place sand resource of commonly used frac sand size fractions in the tested area was calculated. A bulk density of 1.5 g/cm3 was used totalling 7,799 K Tonnes, (8,597 K Tons) the inferred mineral resource for each size fraction is:
- 20/40: 3,758 K Tonnes (4,142,000 Tons);
- 40/70: 3,155 K Tonnes (3,478,000 K Tons);
- 70/140: 886 K Tonnes ( 977,000 K Tons).
It is important to note that the explored area addressed in Norwest's report is less than five percent of the total acreage under quarrying leases held by NAFS.
"We are excited about this investment into fracturing sands," comments Min Kuang, president and CEO of Urban Select. "We see this transaction as an excellent base to build shareholder value. We look forward to updating shareholders on this Property, future acquisitions and investments."
About Urban Select Capital Corp.
Urban Select Capital Corp. is an investment issuer focused on investing growth capital in private and public companies in a broad range of sectors including natural resources, media & entertainment, education, healthcare and consumer retail services. Urban Select's management team is composed of investment professionals combining an Asian background with Western education and extensive experience in investment banking, venture capital and fund management in Canada, China and the U.S.
About North America Frac Sand, Inc.
North America Frac Sand, Inc. (OTCQB:NAFS) is headquartered in Ossian, Indiana, USA. With 29 900 acres of Frac sand leases, the Company's intent is to validate the true value of it's significant resource.
About Frac Sand:
Frac Sand is a proppant used in the oil and gas industry 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. It is therefore a relatively rare commodity.
Forward-Looking Information: 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 is not limited to, the ability of the Company to continue selling Frac sand in the future, on a spot basis or otherwise. 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, future prices for Frac sand and by-products, future demand for processed Frac sand and the ability of the Company to restructure its debts. 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 general volatility of Frac sand and by-product prices and demand, geological, technical, drilling and processing problems, future currency and interest rates, an unwillingness of the Company's lenders to refinance the Company's debts on terms favorable to the Company or at all and the ability of the Company to continue selling Frac sand. Additionally, if the Company is unable to obtain additional financing, the Company may be required to curtail activities and/or liquidate its assets or the Company's creditors may seek to seize its assets. 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.