The frac sand report of Oct 31, 2008
https://www.marketwire.com/press-release/Victory-Nickel-Inc-TSX-NI-915618.html
Minago could produce 1,017,953 tonnes of frac sand per annum.
Assume Frac Sand at Can $60.00/tonne
Victory JV’s Frac Sands at 50/50 with another company who arranges the Can $70.6 million loan at 12% annually over 5 years.
Annual P & I Cost to Victory
35.30 x 0.2774097, or Can $9.8 million.
Sales 1,017,953 tonnes at $60/tonne, about $61.08 million Canadian,
or $30.54 million, in sales to Victory’s credit.
Cost of Sales
(1,017,953 x $8.99/tonne)/2, or Can $4.58 million to Victory.
Dollar value to Victory before depletion, depreciation, administration and taxes.
30.54 – (9.79 + 4.58) = Can $ 16.17 million
For Lower or Higher Prices per Tonne Frac Sand, multiply $30.54 million Sales by:
For Can $40/tonne - 0.667
For Can $50/tonne - 0.800
For Can $70/tonne - 1.167
For Can $80/tonne - 1.333
and subtract the Cost of Sales (Can $ 14.37 million)
Pluses
Money earned by Frac Sand operation can be applied to increasing Nickel Reserves, Resources and Recoveries at Victory's various properties.
Also removal of overburden at Minago could help in expediting future mining operations.