Select Sands has submitted a quarry mining permit application to the Arkansas Department of Environmental Quality for its Sandtown project in Northeast Arkansas.
The quarry mining permit includes reclamation bond instrument, five-year mine plan, and a public notice in an Arkansas daily newspaper.
Select Sands’ Sandtown project near Cave City, Arkansas is 99% pure silica (SiO2) and “high crush resistance” of 30/50 mesh 7K, 40/70 mesh 9K and 100 mesh of 10K (suitable to be used in the extraction of oil and gas as ‘Ottawa White’ Tier-1 frac sand), the company says.
“The high purity (99% SiO2) silica is also suitable for industrial use including float/flat glass (automotive windshield and architectural glass), solar glass, computer/cell phone screens, fiberglass, construction, and building products.
“Prices and volumes for industrial silica sand were higher in 2014 in the flat glass and fiberglass industry, where it is used in raw form to make glass. Overall demand growth is expected to continue in the flat glass, fiberglass, construction, and building products industries in the US aided by low regional energy (natural gas) costs.
“Growth is anticipated to remain the strongest in the US, including a further strengthening of the initial growth that started in 2014 in the non-residential construction, automotive, and photovoltaics (solar glass) sectors.
“Frac sand (used in the extraction of oil and gas) demand decline in 2014 due to low rig-counts in the US is partially offset by the sand use increase per well. The number of drilled but uncompleted wells (DUC) is still increasing in the US. Bringing these DUC wells onstream alone will require about 9MM tons – 18MM tons (and growing) Tier-1 frac sand.
The company is currently working with Tetra Tech to complete a mineral resource estimate and preliminary economic assessment prepared in accordance with NI 43-101 and based on the recently completed drill program. The assessment will provide an initial resource estimate and conceptual economic analysis, including projected Net Present Value and Internal Rate of Return.
“The study will take into account current pricing and marketing options related to the silica sand industrial and specialty products markets (glass, construction, and sports/recreation) as well as the frac sand market for use in oil and gas extraction.
The company expects to release the report next month.
“We are encouraged by the demand increase in the industrial silica sand market, offsetting decline in the frac sand market,” said Select Sand president, Rasool Mohammad.
“However, as per the recent IHS, Eagle Ford, Texas, DUC inventory of April 9, 2015, nearly 40 percent of the 1,400 DUCs (in Eagle Ford) are considered to have attractive economics (break-even costs below $30 per barrel); the demand for frac sand is expected to improve short-medium term.”