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Uniquely Positioned for Success www.selectsands.com TSX-V: SNS | - - PowerPoint PPT Presentation
Uniquely Positioned for Success www.selectsands.com TSX-V: SNS | - - PowerPoint PPT Presentation
TSX-V: SNS | OTC: SLSDF Corporate Presentation | February 2020 Uniquely Positioned for Success www.selectsands.com TSX-V: SNS | OTC: SLSDF TSX-V: SNS | OTC: SLSDF Disclaimer This presentation includes forward-looking information and
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www.selectsands.com
About Select Sands
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Select Sands Corp. is an industrial Silica Sand products company in production on its 100% owned project in Arkansas, U.S.A.;
❑
The company produces Northern White, finer mesh sand- 40/70 Mesh and 70/140 Mesh (100 Mesh) and has a combined Inferred/Indicated Resources of ~40MM tons* (2016);
❑
The Arkansas mine is strategically located to oil & gas (O&G) and industrial customers in Texas, Oklahoma, Louisiana, Colorado, and New Mexico;
❑
Year-round production and shipping capabilities with access to three modes of delivery by truck, rail and barge;
*Sandtown 42.0MM tons of Indicated Mineral Resources (Tetra Tech, February 2016). National Instrument 43-101 technical reports are available on www.sedar.com.
Select Sands is a supplier of premium commercial silica sand and industrial frac sand to the North American markets.
TSX-V: SNS | OTC: SLSDF
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❑ High quality sand available based on preferred O&G specifications ❑ NWS is predominantly mined in the North Midwestern US (Wisconsin, Minnesota and Illinois) and transported to basins in the Southern US ❑ E&P companies have continued to shift from coarser grains and vicious fluid to finer mesh and slickwater treatments to increase recoveries ❑ Select Sands provides a relatively spherical, preferred crush range product closer to the basins in the Southern U.S. than many Northern sources
Nor th ern Wh ite S ilica ( NWS ) : A S up er ior P roduct
ACC Thematics, AltaCorp Capital, Investing in the North American Proppant Industry, June, 2018
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Recent U p dates S ummar y
❑ Opening of transload facility in George West, Texas to service the Eagle Ford basin ❑ Long Term Contract with major E&P , announced in December 2019.
- Three years with a fourth-year option
❑ $4.5 million in new debt financing obtained from bank at 5.25%
- Reconfigure processing facilities for cost optimization
- Finalized purchase of Rail loading facility in Diaz, Arkansas by executing
- ption to purchase leased facility
- Reduce interplant transportation through consolidation of processing
facilities ❑ Continuing discussions to explore M&A opportunities*
❑ * There is no guarantee that the Company will be able to complete the M&A opportunities being reviewed
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Strategic Loca tion
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❑ Positioned closer to the most active onshore basins (Permian, Eagle Ford, Haynesville, etc.) relative to competing Northern White sand operations for lower mine-to-market transportation costs; ❑ Barging capabilities on Mississippi River allows for large (8-10k ton) cost-effective movements. ❑ Year-round production, combines favorably with Arkansas as a business friendly state. ❑ Majority of shipments go to the Texas Basins with the remainder heading to Colorado, Louisiana and Oklahoma
FRAC INDUSTRIAL Strategically located for rail, barge, and highway delivery
Destinations that have been shipped to:
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S elect S ands Assets
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- Indicated resource as per TetraTech 43-101 report February 2016
National Instrument 43-101 technical reports are available
- n www.sedaar.com
Location Sandtown Ozark Processing Diaz, AR George West, TX Facility Type
Mine Wet & Dry Processing Rail Loading Rail Transload
Capacity
40MM Tons* 600,000 Tons per Year 32 car holding or 20 car loading 180 car holding
- r 150 car
transloading
Status
Active Mine In Production Active Loading Active Transload Arkansas Mining & Processing George West Transload
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www.selectsands.com
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F inancial & O p era tiona l High ligh ts
Metric Performance Revenue and continued
- perations
Q3 2019 revenues of $1.1M (USD) with 39,669 tons
- sold. A 32% increase from Q3 2018 but industry
downturn continues to effect the frac sand market. 109,719 total tonnage sold in first three quarters of 2019. Cash Preservation Company remains focused on preserving cash during industry wide downturn through reducing staffing and
- ther related expenses. Recently announced sale of Bell
Farm asset for $700,000 to strengthen balance sheet.
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EBIT DA
Reconciliation of Net Income (Loss) to EBITDA to Adjusted EBITDA
Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2019 2018 2019 2018
Net (Loss) Income
$ (1,992,381) $ (136,140) $ (5,876,712) $ 2,042,996
Add Back: Depreciation and depletion
276,748 243,818 829,234 704,344
Share-based compensation
- 60,910
74,700 488,154
Interest on long-term debt
49,313 44,840 138,036 117,750
Provision for income taxes
- (60,197)
- 526,075
Deferred income tax expense
- 1,754,361
- EBITDA*
$ (1,666,320) $ 153,231 $ (3,080,381) $ 3,879,319
Add Back: Share of loss of equity investee
111,291 17,815 287,283 67,548
Gain on extinguishment of debt
- (21,195)
- Adjusted EBITDA*
$ (1,555,029) $ 171,046 $ (2,814,293) $ 3,946,867
- See note re non-IFRS financial measures on second last slide
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Share Structure
Data as of September 30th, 2019
Shares Issued & Outstanding 88,563,316 Warrants Options (avg $0.68) 5,245,000 Fully Diluted 93,808,316
SNS SLSDF
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M anagement & Ch a irma n
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ZIGU GURD RDS R. VITOL OLS | President & CEO / Director
- Mr. Vitols has served as the President, Mid-South Division, of Martin Marietta Material Inc. Martin Marietta, an
American-based company and a member of the S&P 500 Index, is a leading supplier of aggregates and heavy building materials, with operations spanning 32 states, Canada and the Caribbean. Mr. Vitols worked as the Northeast Regional Manager for W. R. GRACE & Co, a publicly traded company which produces specialty chemicals and materials and operates in over 40 countries. Mr. Vitols has a Masters of International Business (MBA) from Heriot Watt University, Edinburgh, Scotland & studied Civil Engineering Technology at Mohawk College, Hamilton, Canada.
DANIEL A. GILLETT TT| Chairman of the Board
- Mr. Gillett brings over 30 years’ experience serving as a director, investment banker, consultant and senior
executive, including serving as chief executive officer and chief financial officer. Throughout his career, he has completed over $15-billion in financing, restructuring, and merger and acquisition transactions, with the majority
- f those efforts being across all sectors of the oil and gas industry. Mr. Gillett received his MBA from Harvard
Business School in finance and a BBA in accounting from Harding University.
DARREN N URQUH UHART / CPA, CA | Chief Financial Officer
- Mr. Urquhart is a chartered professional accountant with twenty years of experience working in public practice and
- industry. Mr. Urquhart operates his own public practice accounting firm offering chief financial officer and
accounting services to TSX Venture Exchange listed companies in Vancouver. He has also served as director for some of his corporate clients. Mr. Urquhart began his career working as an audit accountant with Grant Thornton LLP, then later worked as a senior tax accountant with Lohn Caulder Chartered Accountants. Mr. Urquhart
- btained his chartered accountant designation in 2001 and is a member of the Chartered Professional
Accountants of British Columbia. In 1995, Mr. Urquhart graduated from the University of British Columbia with a Bachelor degree of Applied Science in Electrical Engineering.
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Non-IFRS Financial Measures The following information is included for convenience only. Generally, a non- IFRS financial measure is a numerical measure of a company’s performance, cash flows or financial position that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with IFRS. EBITDA and Adjusted EBITDA are not recognized measures of financial performance (nor do they have standardized meanings) under IFRS. In evaluating non-IFRS financial measures, investors should consider that the methodology applied in calculating such measures may differ among companies and analysts. The Company uses both IFRS and certain non-IFRS measures to assess
- perational
performance and as a component
- f
employee remuneration. Management believes certain non-IFRS measures provide useful supplemental information to investors in order that they may evaluate Select Sand’s financial performance using the same measures as
- management. Management believes that, as a result, the investor is afforded
greater transparency in assessing the financial performance
- f
the
- Company. These non-IFRS financial measures should not be considered as a
substitute for, nor superior to, measures of financial performance prepared in accordance with IFRS. EBITDA and Adjusted EBITDA The Company defines EBITDA as net income (loss) before finance costs, income taxes, depreciation and amortization and non-cash share-based compensation. The Company defines Adjusted EBITDA as net (loss) income before finance costs, income taxes, depreciation and amortization, non-cash share-based compensation, share of loss of equity investee and provision for impairment in investment in affiliate. Select Sands uses Adjusted EBITDA as a supplemental financial measure of its operational performance. Management believes Adjusted EBITDA to be an important measure as it excludes the effects of items that primarily reflect the impact of long-term investment and financing decisions, rather than the performance
- f
the Company’s day-to-day
- perations.
As compared to net income according to IFRS, this measure is limited in that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in the Company’s business, the charges associated with impairments, termination costs or Proposed Transaction costs. Management evaluates such items through other financial measures such as capital expenditures and cash flow provided by
- perating activities.
The Company believes that these measurements are useful to measure a company’s ability to service debt and to meet other payment obligations or as a valuation measurement.
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