Athabasca Minerals is developing a major silica sand project located north of Fort McMurray, Alberta within the Wood Buffalo region of North East Alberta. This project is accessible via Highway 63, and is near water and power sources.
The Corporation holds Alberta Metallic and Industrial Minerals Leases on seven mineral leases covering 12,800 hectares (31,629 acres). The leases are situated in the Wood Buffalo region of Alberta, and contain silica sand resources which the Corporation plans to develop for the production of frac sand. Extensive independent laboratory testing has been performed to date on the silica sand,
testing for appropriateness in use as frac sand. The results are encouraging as the Corporation's frac sand is found to comply favorably with specifications and technical standards used in the fracking industry.
The Corporation completed a Preliminary Economic Assessment in early 2015 with the following results:
Pretax base-case economics indicate a net present value of $368-million at a 10-per-cent discount rate, with an internal rate of return of 68 per cent, using the base-case prices set forth as follows;
After-tax base-case economics indicate a present value of $268-million at a 10-per-cent discount rate, with an internal rate of return of 57 per cent, using the base-case prices set forth as follows;
The Firebag project has a project life of 25 years with an in situ inferred resource of 39.24 million tonnes;
Year 1 production commissioning is scheduled at 300,848 tonnes with a peak production of 921,588 tonnes and an average production rate of 897,072 tonnes annually;
Project sale of 22.73 million tonnes of frac sand product over a 25-year period;
Initial capital costs of $87.8-million, including 20-per-cent contingency;
Frac sand prices -- FOB (free on board) plant in the Edson area:
20/40 mesh -- $195 per tonne;
40/70 mesh -- $170 per tonne;
70/140 mesh -- $155 per tonne;
Gross revenue of $3.8-billion and operating cash flow (pretax) of $1.3-billion;
Operating cash flow (after tax) of $1-billion;
Payback of 1.6 years before income tax and 1.9 years after income tax.