Nuinsco spun off three nickel projects
in 2007, Minago, Mel and Lac Rocher,
to create Victory Nickel. Victory Nickel
has one of Canada’s largest undeveloped
sulphide nickel inventories, and is also
fortunate to have a very valuable co-product
resource - frac sand - at Minago. Frac
sand is used in the oil and gas business
as a part of the hydraulic fracturing
process - a means of increasing flow to the
wellhead. Frac sand must have particular
characteristics, and is therefore a relatively
rare, and valuable, commodity. Vast
quantities of frac sand are consumed, and
more is needed all the time as shale gas
and oil plays in Canada and the US rise
to prominence.
In the absence of the financing necessary
to build a large-scale nickel/frac sand
mine at Minago, Victory Nickel created
subsidiary Victory Silica Ltd. to establish an
immediate presence in the frac sand market.
Victory Nickel expects to generate cash
flow in 2014 through the sale of premium-
quality frac sand imported from Wisconsin
(the highest quality frac sand available)
from its 500,000 TPY 7P plant located close
to customers in Medicine Hat, Alberta.
Margins on the sale of this frac sand are
expected to be greater than $25/ton.
In 2013, Nuinsco provided a secured
loan to Victory Nickel
(see news release
of March 26, 2013)
to assist in financing
the acquisition and construction of the 7P
V I CTORY N I CKEL / V I CTORY S I L I CA I NVESTMENT
ALBERTA, CANADA
Plant. Nuinsco can convert the outstanding
loan balance into a participating interest
in cash flow from frac sand sales at the
7P Plant. In addition to this revenue stream,
Nuinsco is a significant Victory Nickel
shareholder. This structure potentially
affords Nuinsco something that most of
its peer exploration companies don’t have
- the expected ability to self-finance its
exploration activities.
7P Plant, Medicine Hat, Alberta
Location:
Alberta, Canada
Ownership:
Strategic Investment
Commodity:
Nickel/Frac Sand
Project Status: Production
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