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CanAm Coal Corp. Acquires Alberta Metallic Permit


CanAm Coal Corp. has completed the acquisition of a 100 percent interest in an Alberta Metallic and Industrial Minerals Permit covering approximately 1,200 acres of land containing high-quality silica sand in Central Alberta, Canada.

The purchase price of the acquisition is $1.5 million, which will be settled by $215,000 in cash and the issuance of 25.7 million common shares of the company at a deemed price of $0.05 per common share. With the closing of this transaction, the company has now secured a property that will allow it to diversify and broaden its energy portfolio into the growing frac sand market, it said.

The property acquired by the company has a number of compelling attributes, according to the company:

  • Based on an historical resource calculation, the property may contain at least 10 million cu. yd. of sand. This estimate however is non NI 43-101 compliant and therefore cannot, and should not be relied upon.
  • Initial tests, performed by Loring Laboratories (Alberta) Ltd. and Global Energy Laboratories, indicated that the sand meets the ISO/API criteria for frac sand, which would make this a highly desirable product for the fracking industry. The company has initiated further testing and will release additional results as soon as they are available.
  • The Property's strategic location in Central Alberta provides it with a significant logistics cost advantage due to its relative proximity to major Western Canadian shale plays such as the Duvernay, Montney and Horn River. Industry experts estimate that logistics (transportation and handling/transloading) can account for 60%+ of the delivered cost to the end consumer and such costs could be as high as $150/ton for sand imported from the US. Currently, the majority of the sand used in the Canadian market is imported from the U.S. and can travel up to 3,000 km from the frac sand producing States of Wisconsin, Nebraska and Minnesota.

Jos De Smedt, CEO of CanAm, commented: "We are excited about completing this transaction as we can now strategically move forward towards exploration, development and permitting of the Property. Our objective is to put our frac sand property in production within two years and secure ourselves an additional stream of revenue and cash flow."