Rock Products

MAY 2016

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16 • ROCK products • May 2016 www.rockproducts.com FRAC SAND INSIDER Athabasca Minerals Inc. announced its financial results for the fourth quarter and 12 months ended Dec. 31, 2015. Net loss during fiscal period ending Dec. 31, 2015, increased to $7.314 million from a net loss of $0.831 million in the prior 13-month period ending Dec. 31, 2014, an increase of $6.483 million. The primary contributing factors: • A $1.278 million reduction in aggregate management fees resulting from a 1,300,000 tons (17 percent) reduction in aggregate tons sold from Susan Lake. • A $5.600 million reduction in aggregate sales revenue resulting from a 186,883 (33 percent) reduction in aggre- gate tons sold from corporate pits. • Lower share-based compensation expense of $0.89 mil- lion due to the non-cash expense booked on the options issued in 2014 and 2015. • Other expenses of $7.79 million for inventory impairment of $2.87 million, Susan Lake goodwill impairment $2.54 million, exploration resource property write-down of $2.14 million and others netting to $0.24 million. • An income tax recovery of $1.17 million as a result of the losses. Susan Lake-managed sales volumes in 2015 of 6.2 million tons were 17 percent lower than 2014 managed sales vol- umes of 7.5 million tons. Management maintained oper- ations at historical base levels, with demand levels being impacted by lower oil prices in 2015. Athabasca maintains year-round operations at Susan Lake, and has cleared and stripped the majority of the pit. Corporate-owned pits aggregate sales in 2015 decreased to 384,610 tons from 571,493 tons in 2014. Management con- tinued the implementation of cost improvement strategies that enabled the corporation to produce gravel at a lower operating cost per ton. Through the optimization of produc- tion levels at the crusher, labor requirements were reduced and associated equipment hours were minimized reducing maintenance and operational costs. The corporation's Firebag silica sand project is located 95 km north of Fort McMurray, Alberta, Canada, and is accessi- ble via Highway 63. The planned operation is for the produc- tion of industrial proppants for use in the hydraulic fractur- ing of oil and gas wells. Independent testing by both Stim Lab and Proptester confirm a high quality product with crush strength meeting or exceeding American Petroleum Insti- tute and International Standards Organization standards for frac sand. A Preliminary Economic Assessment (PEA) confirmed that the corporation's Firebag Project has considerable potential for development as a frac sand resource, which includes the potential for a large, highly economical deposit with high margin, rapid payback and 25 years of open pit mining. The PEA was prepared by Norwest Corp., headquartered in Cal- gary, Alberta, Canada. With the uncertainty in oil prices the corporation will be lim- iting any capital spending on this project until greater cer- tainty surrounding pricing and domestic frac sand demand is established. Badger Mining Transload Facility Open for Business After a year of construction and several setbacks due to historic rainfall, Badger Mining Corp.'s (BMC) Erick, Okla., transload facility is now open for business, the company said. The wholly owned and operated site primarily serves the Anadarko Basin and sits in an area that BMC believes is cur- rently underserved. For the family-owned, decades-old sup- plier of Premium Northern-White industrial raw and coated silica sand, the stacked nature of the basin as well as the qual- ity of the reserves it contains speaks to the region's potential moving forward. Situated at the end of the Farmrail shortline railroad outside of Erick, the transload facility can accommodate up to 160 railcars of product on its 3,200 ft. of side rail and 7,400 ft. of working track. Material has already been shipped to the facil- ity and is currently on-site. "I started my career more than 10 years ago in western Okla- homa, so I'm particularly proud of our investment in Erick," said Adam Katz, vice president of sales and marketing. "The size and location of our new site is going to add value to our customers operating in the Anadarko Basin by reducing cost and minimizing miles to the wellhead, leading to a safer operation all around." BMC said it has had great partners in both the state of Okla- homa as well as the city of Erick as the project progressed. From its efforts to help find the ideal site to its assistance securing a grant to rehabilitate 12 miles of railroad, the state of Oklahoma has been eager to help since the beginning. Furthermore, the city of Erick and its people have welcomed Badger Mining with true hospitality and optimism, and BMC is proud to now have this tight-knit city as another one of its stakeholder communities. Athabasca Minerals Announces Financial Results

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