Rock Products

MAR 2017

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16 • ROCK products • March 2017 FRAC SAND INSIDER Dakota Plains Holdings Inc. and its wholly-owned subsidiaries, Dakota Plains Transloading LLC, Dakota Plains Sand LLC, Dakota Plains Marketing LLC, DPTS Marketing LLC, DPTS Sand LLC and Dakota Petroleum Transport Solu- tions LLC (together with the company, the debtors), filed a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Minnesota. The company will continue to operate its business as debtor-in-possession under the jurisdiction of the court and in accordance with the applicable provi- sions of the Bankruptcy Code and order of the court. On Jan. 27, 2017, the court approved a stalking horse asset-purchase agree- ment, dated Dec. 19, 2016, and amended Jan. 26, 2017 agreement, by and between the debtors and BioUrja Trad- ing LLC, to which, subject to the terms and conditions of the asset purchase agreement, the purchaser agreed to purchase substantially all of the assets of the debtors for a purchase price equal to approximately $10.85 million, which would be satisfied in cash and the assumption of certain specified liabili- ties, including payment of pre-petition cure costs of up to $50,000 required to be paid to Section 365 of the Bank- ruptcy Code and the remainder to be paid from the purchase price. The consummation of the transactions contemplated by the asset purchase agreement is subject to certain cus- tomary conditions as specified in the asset purchase agreement. In addition, the asset purchase agreement pro- vides for a termination fee payable to the purchasers upon the occurrence of certain events. Smart Sand Set to Increase Production at Oakdale Smart Sand Inc. announced that based on its assessment of increased demand for its products, particularly fine mesh sand, the company has decided to increase the wet and dry plant processing capacity at its Oakdale facility in order to produce up to approximately 4.4 million tons of raw frac sand per year. "We have also decided to expand rail and logistics infrastructure in Wiscon- sin to support this potential increase in customer demand," the company said. "Additionally, we continue to evaluate other proposed projects and related expenditures, such as investments in transload facilities located in the shale operating basins, in light of customer demand and energy market trends. There can be no assurance, however, that all or any of these initiatives will be executed or that the results there- from will be materially beneficial to our financial performance." The company said it currently in dis- cussions with certain existing and prospective customers in the pressure pumping, exploration and production industries to enter into long-term, take-or-pay agreements with minimum volume commitments, particularly for finer mesh sand. "We also have experienced a recent increase in interest for recurring spot sales in the open market and have conducted some spot sales on a select basis," the company said. "If we were to enter into any such long-term agree- ment or conduct additional spot sales, the additional volumes we sell could be material to our performance and prospects. We can provide no assur- ance, however, that we will be able to enter into any of these agreements or complete any such sales. Entry into the long-term contractual agreements is subject to, among other things, agree- ment on the purchase price for our frac sand and the negotiation and execution of definitive documentation, and entry into spot sales is subject to agreement on the terms of any such sale." North America Frac Sand to Study Leases North America Frac Sand Inc.'s CEO David Alexander confirmed that, as dis- closed in previous news releases and filings in quarterly reports on Form 10Q and Form 8K, the company has engaged Norwest Corp. to complete a NI-43-101 report. The purpose of the report is to evaluate the quantities and quality of the mineral resources on the company's frac sand leases, which are located in Saskatch- ewan, Canada. Norwest was chosen because of their expertise to develop and optimize mineral projects. Nor- west takes a comprehensive approach to help clients develop new ventures, Alexander said. They have expertise in all phases of project development from initial project planning through to the delivery of mineral products. The company's long-term frac sand leases are contiguous and cover over 39,000 acres. As part of the evaluation process, an auger drilling program of 35 drill holes and covering 700 acres, was completed. The samples taken from the drill holes were tested by independent labs. The results of the test samples have been assessed and evaluated and the NI-43-101 report is in the process of being finalized. Upon receipt of the NI-43-101 report from Norwest, an 8K will be filed and a news release will disclose this information to the public, according to the company. Dakota Plains Holdings Files Chapter 11

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