Victory Nickel Inc. (TSX: T.NI, Stock Forum) said that it has completed an asset purchase agreement for the Seven Persons sand recycling facility located southwest of Medicine Hat, Alberta.
The 7P Facility is well located in an area populated with fracking companies, its customers, and is within only a few hours trucking distance of the well sites.
According to the Victory Nickel press release, at the meeting of shareholders held in June 2012, the company announced the creation of Victory Silica Ltd. (VSL). VSL was created to establish Victory Nickel's presence in the frac sand market prior to commencing production of both nickel and frac sand at the 100%-owned Minago mine in Manitoba.
The Minago feasibility study envisions production of up to 1.14 million tonnes per year of premium-quality frac sand from the Winnipeg Formation sandstone resource that overlies the Minago nickel deposit.
In order to establish Victory Nickel as a premier frac sand supplier today, VSL has planned a three-phase program. Phase 1 establishes production of 400,000 tons per annum of premium-quality Midwest frac sand from the 7P Facility by shipping partially-processed sand purchased in Wisconsin to the 7P Facility for final processing and distribution.
Next, Phase 2 will reduce costs and assure security of sand supply through the acquisition of a frac sand mine in Wisconsin.
Finally, in Phase 3, Victory Silica has identified a site in Winnipeg, Manitoba, where it plans to build a larger frac sand plant to process and distribute both imported and domestic sands, including sand mined at Minago.
Victory Nickel is focused on becoming a mid-tier nickel producer by developing its four existing properties and by evaluating opportunities to expand its nickel asset base.
On Wednesday, Victory Nickel soared 20% and was trading at $0.03 a share. The company has a market cap of $11.9 million, based on 395.8 million shares outstanding. The 52-week high and low was $0.08 and $0.02 respectively.