Welcome!

News Feed Item

La Ronge Signs Definitive Agreement to Acquire a Producing Frac Sand Asset in Western Canada Sedimentary Basin

VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 05/05/14 -- La Ronge Gold Corp. ("La Ronge" or the "Company") (TSX VENTURE: LAR) is pleased to announce that it has signed a definitive agreement to acquire the assets and business of Canfrac Sands Ltd., a private company producing and selling frac sand in the Western Canada Sedimentary Basin. Frac sands are a proppant used in hydraulic fracturing (fracking/fracing) of oil- and gas-hosting rock to keep fractures open (or "propped") after hydraulic pressure has broken the host rock to release the oil and gas. Canfrac, whose operations are located near Lloydminster, Saskatchewan, currently supplies frac sand to a number of nearby oil-field services companies.

The acquisition is at arm's length and is expected to constitute a fundamental acquisition. The agreement contemplates a cash purchase price of $4,500,000, subject to standard industry adjustments, plus re-imbursement of up to $1,000,000 in certain pre-approved capital expenditures made by Canfrac prior to the closing to improve the purchased assets for the benefit of La Ronge. Pursuant to the Agreement, La Ronge will deliver a $1,000,000 deposit into trust with Canfrac's lawyers. If La Ronge terminates the transaction, the deposit will be treated as a break fee payable to Canfrac in exchange for equity in the amount of 22% of Canfrac's issued common shares and a nominee to Canfrac's Board of Directors. If Canfrac terminates the transaction, the deposit will be returned to La Ronge. In the event that the acquisition is completed, the deposit will be applied to reimburse Canfrac in the amount of any pre-approved capital expenditures referred to above, with any excess returned to La Ronge. Completion of the transaction, expected on or before June 19, 2014, remains subject to a number of conditions, including the completion of financing and the receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange.

Pursuant to the acquisition, La Ronge will conduct a brokered private placement in two tranches to raise gross proceeds of up to $7,000,000, with an overallotment option for gross proceeds of up to an additional $1,000,000. The first tranche will consist of 4,000,000 common shares at a price of $0.25 per common share to raise gross proceeds of $1,000,000, which will be used to fund the $1,000,000 deposit payable under the acquisition.

The second tranche will consist of up to 24,000,000 subscription receipts at a price of $0.25 per subscription receipt to raise gross proceeds of up to $6,000,000, with an overallotment option for an additional 4,000,000 subscription receipts for gross proceeds of up to an additional $1,000,000. Each subscription receipt will, concurrently with the completion of the acquisition, automatically convert into a common share of La Ronge. The gross proceeds of the subscription receipts will be placed into escrow, for release to La Ronge upon the satisfaction of such condition and resulting conversion of subscription receipts into common shares. The proceeds from the subscription receipts will be used by La Ronge to pay the $4,500,000 acquisition price, to fund further capital expenditures, and for general working capital.

Canaccord Genuity Corp. has agreed to act as lead agent for the private placement on a commercially reasonable efforts basis. The securities issued will be subject to a 4-month hold period from the date of issue of the subscription receipts. The completion of the private placement and payment of any commission and fees remain subject to the receipt of all necessary approvals, including the approval of the Exchange.

About Canfrac

The Canfrac operation is located approximately 30 km to the northeast of the town of Lloydminster, Saskatchewan, and 4.8 km east and 3 km north of Hillmond, SK, in the rural municipality of Britannia Number 502. The area is highly developed by both the agriculture and oil industries.

Canfrac currently holds a total of eight quarrying leases with local freehold landowners, covering an aggregate of 1,440 acres, granting exclusive rights to explore for and extract frac sands or sand and gravel deposits on the leased lands. The current quarrying operations are restricted to one lease known as the "Thompson lease," although Canfrac's leased properties extend up to 20 km to the north and east. The property is located on a well-maintained gravel road and is mostly accessible via paved roads. Power to the site is currently sourced from the SaskPower electrical grid, and natural gas is provided to site by the SaskEnergy distribution pipeline. Water for processing operations is sourced from an adjacent slough located and supplemented by a water well on site.

The deposit is described as a glacial till consisting of poorly sorted silts, very fine to very coarse grain sands, gravels, clay and silt.

Various types of proppants can be used in hydraulic fracturing, depending on site-specific conditions. Current products range from raw natural sand and coated sand to man-made ceramic products. The criteria for assessing the suitability of natural sand for use in hydraulic fracturing operations is set out in the American Petroleum Institute's Recommended Practice 19C and ISO13503-2:2006. Both standards provide recommended specifications that consider particle distribution, roundness and sphericity, turbidity, acid solubility, and crush resistance when assessing a sands potential for use as a proppant.

Exploration for frac sand began on the property in 2005 by Green Tree Engineering, a geological consulting company contracted by Canfrac. The focus of the program at that time was on identifying sources of -20/+40 mesh sand and resulted in Canfrac signing two lease agreements. A drill program was carried out on one of the leases, the Thompson lease, between June 23 and June 25, 2005. The purpose of the program was to determine the lateral continuity between the sand observed in trench. In total, 8 bore holes were drilled and spaced between 60 to 100 metres.

Based on favourable results from the 2005 program, Canfrac constructed a quarry operation on the Thompson lease. The quarry began producing a 20/40 mesh frac sand product in 2006. To date, Canfrac estimates that approximately 458,000 tonnes (of gross wet product) has been produced. The processing plant is now capable of producing over 100,000 tonnes/year of a wet gross product comprised of 16/30, 20/40, 30/50 and 40/70 mesh products, with sales to both large and small oil-field services companies in the Viking Oil Field in Alberta and Saskatchewan. Audited financial information for Canfrac's financial year ended December 31, 2013, indicates gross sales of $3.28 million on the sale of 32,990 tonnes of frac sand.

Canfrac has developed a two-staged approach to mining and processing the deposit. Stage one includes the mining and wet processing of the raw material to take place from late spring to early fall. Once the material has undergone wet processing, it is stockpiled according to size fraction. The second stage involves dry processing, final size refinement, and shipping to take place in the winter months using the wet stockpiles collected over the summer months. The limits of the sand deposit currently being exploited on the Thompson lease have not been fully defined from previous exploration programs. Potential exists for the deposit to extend to the northwest and to the south under the area of the existing processing plant. In addition, only limited prospecting and sampling work has been done on the other quarrying leases in the region.

Readers are cautioned that, although the Thomson lease is in production, there is no established mineral resource or mineral reserve for the property, or feasibility study demonstrating economic and technical viability.

Frac Sand Market

The Freedonia Group Inc. (Freedonia) completed a detailed market study in 2013 on proppant demand across Canada. Freedonia is a leading international business research company, founded in 1985, that publishes more than 100 industry research studies annually. Their industry analysis provides an unbiased outlook and a reliable assessment of an industry.

Freedonia indicates that the North American Proppant (frac sand) demand has risen sharply since 2002, rising from $250 million to nearly $5 billion in total sales in 2012. This is attributed largely to the fact that proppants (frac sand) have been critical to development of unconventional resources such as shale oil and gas in North America, which has set off a chain of events that is revitalizing the region's chemical processing and other industries. Although proppants have been used in oil and gas production for more than 60 years, the advent of horizontal drilling technology coupled with multistage hydraulic fracturing created new opportunities for growth starting around the mid-2000s. Freedonia expects that overall demand for proppants will reach over 100 billion lbs (45 million tonnes (mmt)) in 2017, with an estimated value of $9.4 billion (USD), at a selling price of $0.09/lb. The majority of proppant demand for North America is concentrated in the United States of America, with demand in 2017 estimated to be approximately 90 billion pounds (40.9 mmt). Freedonia estimates that proppant demand for Canada in 2017 will be about 12 billion pounds (5.44 mmt).

About La Ronge Gold Corp.

La Ronge is actively engaged in diversifying its mining assets portfolio into sectors other than precious metals. The intent of this strategy is to identify and acquire strategic investments that have the capability to generate cash flow with low capital expenditure costs. This mining asset diversification strategy is limited geographically to Canada at the present time. La Ronge is a Vancouver-based resource growth and development company. The Company owns high-grade gold deposits in one of Canada's emerging gold producing regions, the La Ronge Gold Belt, northern Saskatchewan. La Ronge also holds other gold projects located in Ontario and Saskatchewan.

For more information about La Ronge Gold Corp., please go to www.larongegold.com.

Cameron Bartsch, M.Sc., P.Geo., of Tetra Tech EBA, a Qualified Person as defined by National Instrument 43-101, has reviewed the scientific and technical information disclosed in this News Release and has approved its dissemination.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this Release.

FORWARD-LOOKING INFORMATION

This News Release includes forward-looking information and statements, which may include, but are not limited to, information and statements regarding or inferring the future business, operations, financial performance, prospects, and other plans, intentions, expectations, estimates, and beliefs of the Company. Information and statements which are not purely historical fact are forward-looking statements. Forward-looking information and statements involve and are subject to assumptions and known and unknown risks, uncertainties, and other factors which may cause actual events, results, performance, or achievements of the Company to be materially different from future events, results, performance, and achievements expressed or implied by forward-looking information and statements herein. Although the Company believes that any forward-looking information and statements herein are reasonable, in light of the use of assumptions and the significant risks and uncertainties inherent in such information and statements, there can be no assurance that any such forward-looking information and statements will prove to be accurate, and accordingly readers are advised to rely on their own evaluation of such risks and uncertainties and should not place undue reliance upon such forward-looking information and statements. Any forward-looking information and statements herein are made as of the date hereof, and except as required by applicable laws, the Company assumes no obligation and disclaims any intention to update or revise any forward-looking information and statements herein or to update the reasons that actual events or results could or do differ from those projected in any forward-looking information and statements herein, whether as a result of new information, future events or results, or otherwise, except as required by applicable laws.

Contacts:
La Ronge Gold Corp.
Rasool Mohammad, B.Sc. (Mining)
President & CEO
604 639-4533
604 685-3765 (FAX)
www.larongegold.com

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
StackIQ has announced the release of Stacki 3.2. Stacki is an easy-to-use Linux server provisioning tool. Stacki 3.2 delivers new capabilities that simplify the automation and integration of site-specific requirements. StackIQ is the commercial entity behind this open source bare metal provisioning tool. Since the release of Stacki in June of 2015, the Stacki core team has been focused on making the Community Edition meet the needs of members of the community, adding features and value, while ...
Qosmos has announced new milestones in the detection of encrypted traffic and in protocol signature coverage. Qosmos latest software can accurately classify traffic encrypted with SSL/TLS (e.g., Google, Facebook, WhatsApp), P2P traffic (e.g., BitTorrent, MuTorrent, Vuze), and Skype, while preserving the privacy of communication content. These new classification techniques mean that traffic optimization, policy enforcement, and user experience are largely unaffected by encryption. In respect wit...
For basic one-to-one voice or video calling solutions, WebRTC has proven to be a very powerful technology. Although WebRTC’s core functionality is to provide secure, real-time p2p media streaming, leveraging native platform features and server-side components brings up new communication capabilities for web and native mobile applications, allowing for advanced multi-user use cases such as video broadcasting, conferencing, and media recording.
SYS-CON Events announced today the Kubernetes and Google Container Engine Workshop, being held November 3, 2016, in conjunction with @DevOpsSummit at 19th Cloud Expo at the Santa Clara Convention Center in Santa Clara, CA. This workshop led by Sebastian Scheele introduces participants to Kubernetes and Google Container Engine (GKE). Through a combination of instructor-led presentations, demonstrations, and hands-on labs, students learn the key concepts and practices for deploying and maintainin...
SYS-CON Events announced today that Venafi, the Immune System for the Internet™ and the leading provider of Next Generation Trust Protection, will exhibit at @DevOpsSummit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Venafi is the Immune System for the Internet™ that protects the foundation of all cybersecurity – cryptographic keys and digital certificates – so they can’t be misused by bad guys in attacks...
The cloud market growth today is largely in public clouds. While there is a lot of spend in IT departments in virtualization, these aren’t yet translating into a true “cloud” experience within the enterprise. What is stopping the growth of the “private cloud” market? In his general session at 18th Cloud Expo, Nara Rajagopalan, CEO of Accelerite, explored the challenges in deploying, managing, and getting adoption for a private cloud within an enterprise. What are the key differences between wh...
ReadyTalk has expanded the capabilities of the FoxDen collaboration platform announced late last year to include FoxDen Connect, an in-room video collaboration experience that launches with a single touch. With FoxDen Connect, users can now not only engage in HD video conferencing between iOS and Android mobile devices or Chrome browsers, but also set up in-person meeting rooms for video interactions. A host’s mobile device automatically recognizes the presence of a meeting room via beacon tech...
Deploying applications in hybrid cloud environments is hard work. Your team spends most of the time maintaining your infrastructure, configuring dev/test and production environments, and deploying applications across environments – which can be both time consuming and error prone. But what if you could automate provisioning and deployment to deliver error free environments faster? What could you do with your free time?
Ixia (Nasdaq: XXIA) has announced that NoviFlow Inc.has deployed IxNetwork® to validate the company’s designs and accelerate the delivery of its proven, reliable products. Based in Montréal, NoviFlow Inc. supports network carriers, hyperscale data center operators, and enterprises seeking greater network control and flexibility, network scalability, and the capacity to handle extremely large numbers of flows, while maintaining maximum network performance. To meet these requirements, NoviFlow in...
Choosing the right cloud for your workloads is a balancing act that can cost your organization time, money and aggravation - unless you get it right the first time. Economics, speed, performance, accessibility, administrative needs and security all play a vital role in dictating your approach to the cloud. Without knowing the right questions to ask, you could wind up paying for capacity you'll never need or underestimating the resources required to run your applications.
It’s 2016: buildings are smart, connected and the IoT is fundamentally altering how control and operating systems work and speak to each other. Platforms across the enterprise are networked via inexpensive sensors to collect massive amounts of data for analytics, information management, and insights that can be used to continuously improve operations. In his session at @ThingsExpo, Brian Chemel, Co-Founder and CTO of Digital Lumens, will explore: The benefits sensor-networked systems bring to ...
Extreme Computing is the ability to leverage highly performant infrastructure and software to accelerate Big Data, machine learning, HPC, and Enterprise applications. High IOPS Storage, low-latency networks, in-memory databases, GPUs and other parallel accelerators are being used to achieve faster results and help businesses make better decisions. In his session at 18th Cloud Expo, Michael O'Neill, Strategic Business Development at NVIDIA, focused on some of the unique ways extreme computing is...
On Dice.com, the number of job postings asking for skill in Amazon Web Services increased 76 percent between June 2015 and June 2016. Salesforce.com saw its own skill mentions increase 37 percent, while DevOps and Cloud rose 35 percent and 28 percent, respectively. Even as they expand their presence in the cloud, companies are also looking for tech professionals who can manage projects, crunch data, and figure out how to make systems run more autonomously. Mentions of ‘data science’ as a skill ...
Cloud analytics is dramatically altering business intelligence. Some businesses will capitalize on these promising new technologies and gain key insights that’ll help them gain competitive advantage. And others won’t. Whether you’re a business leader, an IT manager, or an analyst, we want to help you and the people you need to influence with a free copy of “Cloud Analytics for Dummies,” the essential guide to this explosive new space for business intelligence.
Manufacturers are embracing the Industrial Internet the same way consumers are leveraging Fitbits – to improve overall health and wellness. Both can provide consistent measurement, visibility, and suggest performance improvements customized to help reach goals. Fitbit users can view real-time data and make adjustments to increase their activity. In his session at @ThingsExpo, Mark Bernardo Professional Services Leader, Americas, at GE Digital, discussed how leveraging the Industrial Internet a...