Victory Nickel Inc. announced it has entered into an option to acquire a 100 percent interest in a land package totaling more than 300 acres in southwestern Wisconsin. The company is specifically targeting a 100-acre ridge that has been determined to contain one of the highest quality frac sand deposits in North America.
This is a Jordan formation sandstone located close to road and rail transportation links. Typically, 40 acres of ridge contains 8,000,000 tons of sandstone. The company expects to realize 4,000,000 tons of coarse high-quality Jordan formation sand from each 40-acre parcel.
The option agreement provides for a cash payment on signing of the agreement, a second cash payment on delivery of permits and a third cash payment on exercise of the option. The option is valid for six months with two equivalent extensions available under certain circumstances.
Prior to production the company will be required to pay $40,000 per annum as advance royalties on the initial 20,000 tons of sand production. Once the property is in production, the company will be required to pay a royalty of $2.00 per ton of frac sand sold from the property.
"This agreement establishes Victory Nickel as a property owner in what is recognized as one of the best quality frac sand producing areas in the world," said Ken Murdock, CEO of Victory Nickel's 100 percent-owned subsidiary Victory Silica Ltd. "We have now secured a supply of premium-quality Wisconsin frac sand and continue to actively pursue Phase 2 of our business plan which includes the finalization of joint venture partnerships to combine this property with other known high-quality deposits of Northern White frac sand."