Exploring and Mining Sand
When we think about junior mining companies we always seem to think gold and silver explorers. Then after that we head down the list to base metals like copper, zinc and nickel. Then we go down the list even more and we find rare earths, graphites and if we go deeper we find potash and phosphates. That would be the extent of so called mining and exploration to most.
With the down turn in metals we are seeing a lot of juniors jump onto the marijuana and cannibas bandwagon. It's alot like in the early 1990's when some juniors re-invented themselves into tech ventures. But now there is a whole new industry that is springing up. Not very many people are even aware of it but this something is the mining of sand. Not ordinary sand but special grades of sand for fracking wells. With the oil patch drilling deeper into the so called shale plays like the Bakken, the Marcelus, or in Canada the Monteny, these wells need to be fracked in order to produce gas and fracking takes a lot of sand. Just to frack one well can take as much as 12 or more rail cars of frack sand. With thousands of wells being slated to be fracked, that is a lot of sand.
Sand producers in the US are running a full capacity and the stocks of these companies have gone through the roof. US Silica SLCA is an excample of what kind of price you pay for a sand stock in the US. In Canada there is no so called major player yet as most sand is mined by private companies like Winnbay in Saskatchewan. Now of course with the down turn in metals a few juniors are regrouping and looking into the frac sand business as a viable alternative in mining and exploration.
Victory Nickel NI is one such junior that has gotten involved in the production of frack sand. The company has its own sand plant in the Medicine Hat region of Alberta. Another company is Athabasca Minerals ABM who has sand and aggregates in the Fort MacMurray area of Alberta.
Another company which is a gold explorer, La Ronge Gold LAR is also getting into the sand business. In a recent news release the company stated that they were looking at buying a private company called CanFrac. This company already is set up and producing the sands required for well fracking and best of all the location is right in the heart of the oil patch with all infastructure already in place. The stock is halted at the moment.
So if you have confidence in the oil and gas sector and are down and out on metals these types of stocks may be appealing. I am sure there will be news out in the near future of another junior looking at getting into the sand mining business.
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