34 www.resourceworld.com
j u n e / j u l y 2 0 1 4
M
odern, horizontal drilling technol-
ogy requires a special type of sand to
be injected into the wells. The tech-
nology has been widely implemented in the
oil and gas industry and numerous publicly-
trading, US-based, frac sand companies are
enjoying very high share values. Emerge
Energy Services LP [EMES-NYSE] is trad-
ing at about US $74/share and Hi-Crush
Partners LP [HCLP-NYSE] sells for US $41/
share.
Not just any sand can be used as frac
sand. Known as a "proppant," frac sand
is characterized by round crystals of silica
which "prop up" the fractures off a hori-
zontal drill hole and, being permeable,
allow the gas and/or oil to flow out of the
fractures to the well bore and on to the
surface.
Presently, there is great demand for frac
sand which, depending on the grade, sells
for about $100 per tonne. It takes about 25
rail cars of frac sand to service one well. In
the US, hydraulic fracturing, or fracking, is
so popular that several thousand wells are
awaiting frac sand crews to arrive. Of note,
there have been public protests in opposi-
tion to fracking due to fears of aquifer
contamination, even though an EPA study
concluded there hasn't been any. There are
number of publicly-trading, Canadian com-
panies entering the frac sand sector that we
have summarized below.
La Ronge Gold Corp. [LAR-TSXV],
which has been involved in developing
gold projects in the La Ronge region of
Saskatchewan, has recently diversified
into the frac sand sector. The company has
signed a definitive agreement to acquire
the assets and business of Canfrac Sands
Ltd., a private company producing frac
sand in the Western Canada Sedimentary
Basin that sells into the Canadian frac sand
market, particularly the Vulcan gas play,
and has fixed sales contracts with various
canadian frac sand companies just getting started
By Ellsworth Dickson
Victory Silica's Seven Persons (7P Plant)
near Medicine Hat, Alberta. Photo
courtesy Victory Silica Ltd.
