Rainmaker Resources Ltd. Acquires Bray Frac Sand Property, Arkansas; Receives Highly Encouraging Test Results
June 19 2014 - 5:00AM
Marketwired
Rainmaker Resources Ltd. Acquires Bray Frac Sand Property,
Arkansas; Receives Highly Encouraging Test Results
CALGARY, ALBERTA--(Marketwired - Jun 19, 2014) - Rainmaker
Resources Ltd. (TSX-VENTURE:RMG) ( "Rainmaker") is pleased to
announce that it has entered into a binding Letter Agreement with
Arkansas Silica LLC ("ASL") to acquire an Option to Purchase the
304-acre Bray Frac Sand property, located in NE Arkansas. ASL has
entered into an Option to Purchase Agreement (the "Option") with
the landowners, dated May 30, 2014. This Option gives ASL the right
to purchase the property outright for US$1,100,000 on or before
January 5, 2015.
Highly encouraging results have been received from testing on
sand samples obtained during a preliminary test drill program.
Prior to negotiating the terms, Company management and technical
representatives visited the property on several occasions to test
and sample the property. This included a two day drill program,
using an inexpensive water well rig, to drill three test holes. The
three drill holes demonstrated sand thicknesses of 80 ft., greater
than 90ft. and greater than 120 ft. respectively. Analytical work
on two composite samples yielded results that were better than the
industry standard recommended values for all parameters. Details
are presented below.
The Company will now commence a comprehensive sonic drill
program with the objective of completing an NI 43-101 compliant
resource estimate.
Test Drilling:
The drilling consisted of three mud-rotary holes to test the
thickness of the sand formation, and to collect sand material for
subsequent testing. The three holes were all collared in sand, and
intersected sand as follows:
Hole
B-1 |
depth
to base of sand 80 feet |
Hole
B-2 |
hole
stopped at 120 feet, still in sand |
Hole
B-3 |
lost
circulation at 100 feet, still in sand at 90 feet. |
Two composite sand samples were prepared from the drill
cuttings, and were submitted to Stim-Lab, Inc in Duncan, Oklahoma.
The samples were dried, weighed and washed through a 200 mesh
screen. The two composites were then tested for sphericity,
roundness, acid solubility, bulk density, apparent density and
crush resistance (K-value). The procedures followed were as stated
in ISO 13503-2:2006/API RP19C:2008.
The sieve test yielded the following results:
Percentage of sand within size fraction |
Size fraction |
Composite 1 |
Composite 2 |
20/40 |
6.1 |
5.7 |
30/50 |
28.4 |
26.2 |
40/70 |
58.0 |
56.2 |
70/140 |
33.0 |
35.3 |
Note - these percentages add up to more than 100% because the
ranges of the size fractions overlap.
It was decided that the full testing would proceed on the 30/50
size for Composite 1, and on the 40/70 size for Composite 2.
Results as are follows:
API test results |
|
|
|
|
Comp 1 30/50 size |
Comp 2 40/70 size |
Notes |
Sphericity |
0.8 |
0.7 |
minimum recommended value = 0.6 |
Roundness |
0.7 |
0.7 |
minimum recommended value = 0.6 |
Acid solubility |
1.45% |
1.30% |
maximum recommended value for 30/50 = 2.0%, for 40/70 = 3.0% |
Bulk density |
1.45 g/cm3 |
1.42 g/cm3 |
|
Apparent density |
2.63 g/cm3 |
2.64 g/cm3 |
|
K-value |
6K |
8K |
highest stress value generating no more than 10% crushed
material |
Director of Rainmaker, Alan Young, P.Eng, commented, "This sand
is an excellent quality frac sand that exceeds all the key
attributes as outlined by the ISO/API standards referenced above,
for the specified sand sizes. These attributes will make the sand a
solid technical contender for use in either US or Canadian fracture
stimulation applications. We are confident that the additional
delineation wells will serve to prove up the extent and potential
value of the play."
Letter Agreement:
ASL will assign its interest in and to the Option in
consideration of payment of $175,000 and the issuance of 2,500,000
shares of Rainmaker's capital stock, payable in five installments
over a four year period from the effective date of the agreement.
In addition, Rainmaker will pay ASL a royalty of $1.00 per short
ton of frac sand extracted, processed, sold and delivered.
Bray Property:
The Bray Frac Sand property is located in Izard County,
north-central Arkansas, and has excellent access from State
highways. The property is approximately 30 miles north of the city
of Batesville, AR. Rail access is available in Batesville, with
several potential loading sites present. The currently operating
Bluebird Sand LLC frac sand operation is located approximately 5
miles southwest of the Bray property.
The property is underlain by the St Peter Sandstone, of
Ordovician age, and is homogeneous pure quartz sand. The St Peter
sandstone (also known as the Ottawa sand in commercial operations)
is considered to be a major source of frac sand within the United
States, especially in Wisconsin. The Arkansas Geological Survey
reports that in the nearby Mt. Pleasant area the sand ranges from
135 - 150 feet in thickness. On the Bray property, drilling by
Rainmaker has demonstrated thicknesses in excess of 120 feet.
Bluebird Sand LLC produces frac sand from the same formation.
Rainmaker President and CEO, Rick Patmore commented, "The Bray
Frac Sand property is ideally situated to service the Eagle Ford,
Fayetteville and New Albany shale plays. The Ottawa sands are of a
top pedigree of frac sand in this industry. We look forward to
briskly moving this project toward development for the benefit of
all shareholders. With Mexico now lifting their moratoriums this is
another avenue Rainmaker could have for a client base. We are very
excited about this opportunity as we believe that the size of this
property could turn Rainmaker into a real contender in this arena
for years to come."
The transaction is subject to acceptance by the TSX Venture
Exchange.
Chris M. Healey, P.Geo, a Director of Rainmaker, is the
qualified person responsible for the technical content of this
release.
On behalf of the Board of Directors
Rick Patmore, President and CEO, Rainmaker Resources Ltd.
The TSX Venture Exchange Inc. has in no way passed upon the
merits of the proposed transaction and has neither approved nor
disapproved the contents of this press release.
The TSX Venture Exchange has not reviewed and does not
accept responsibility for the adequacy or accuracy of the content
of this News Release. WARNING: The Company relies on litigation
protection for "forward looking" statements. Actual results could
differ materially from those described in the news release as a
result of numerous factors, some of which are outside the control
of the Company. This news release does not constitute an offer to
sell or a solicitation of an offer to sell any of the securities in
the United States. The securities have not been and will not be
registered under the United States Securities Act of 1933,
as amended (the "U.S. Securities Act") or any state securities laws
and may not be offered or sold within the United States or to U.S.
Persons unless registered under the U.S. Securities Act and
applicable state securities laws or an exemption from such
registration is available.
Rainmaker Resources Ltd.Judy A. McCallCorporate
Communications604.638.8030news@rainmakerresources.cawww.rainmakerresources.ca
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