Canadian Premium Sand Inc. Continues to Advance its Patterned Solar Glass Project to "Shovel Ready" Status

CALGARY, Alberta, June 13, 2022 (GLOBE NEWSWIRE) -- Canadian Premium Sand Inc. (“CPS” or the “Company”) (TSXV: CPS) is pleased to report the results from its Front End Engineering and Design (“FEED”) study and the receipt of a market report confirming the economic viability of manufacturing patterned solar glass at a site identified in Selkirk, Manitoba.

“These studies support our decision to build North America’s only patterned solar glass manufacturing facility,” stated Company President, Glenn Leroux. “The business strategy of integrating our high-quality solar spec sand, Manitoba’s inexpensive renewable hydroelectricity, and proximity to our North American customer base through the Winnipeg logistics hub, is a highly attractive business plan that others cannot easily replicate.”

The FEED study was carried out by cm.project.ing GmbH, an internationally recognized independent engineering firm, specializing in glass manufacturing facilities and processes. The market report specifically analyzed the North American market for patterned solar glass, and was completed by Clean Energy Associates, a global consulting firm specializing in the solar industry.

The market report conducted by Clean Energy Associates confirmed that patterned solar glass panels are the most efficient products on the market and can be expected to dominate industry demand for the next 20 years. Furthermore, the findings included a positive outlook for the long-term price of patterned solar glass in North America, further validating the Company’s business model.

Since the Company’s announcement of its intention to develop North America’s only patterned solar glass manufacturing facility, CPS has received strong levels of industry support for the project. The Company has commenced commercial discussions with the majority of solar panel manufacturers that have existing North American capacity, as well as a number of global manufacturing entities that are planning to establish a North American presence. To date, the Company has secured Expressions of Interest for the purchase of solar glass in excess of the first phase of planned facility output.

The FEED study focused on the design, capital needs and operating costs of a patterned solar glass manufacturing facility in Selkirk, Manitoba and a sand extraction facility located at the Company’s wholly owned and permitted Wanipigow Sand Quarry, approximately 150 kms to the North. In addition to preliminary engineering design, the FEED study also included plant and equipment selection, production output flow with various product specifications as well as logistics considerations for raw materials and finished products.

Taking the FEED study and market report into consideration, the Company is advancing plans to develop its integrated solar glass manufacturing project in multiple largescale phases. Highlights of the first phase of the project include:

• 550 to 600 tonnes per day patterned solar glass manufacturing and coating facility
  • Multiple production lines that accommodate tempered glass specifications ranging in thickness between 4.0mm and 1.8mm and the application of advanced anti-reflective and anti-soiling coatings
  • Capable of supplying up to 4 GW of annual solar panel manufacturing
    
    
• $400 to $500 million Class 4 capital cost estimate, which provides an 80% certainty level and includes costs for both solar glass manufacturing and sand extraction facilities
  • Includes capital for land and certain common operating infrastructure that will enable CPS to efficiently add future production capacity to accommodate the anticipated growth in solar glass demand
    
    
• Approximately $200 million of annual EBITDA based on full production capacity and current solar glass prices of approximately US$12/sq. m.
  • CPS expects to be the lowest cost provider of patterned solar glass to the North American market due to the use of low-cost renewable hydroelectric energy, proximity to customers and the integration of CPS’s wholly owned silica sand supply
  • Taking the current capital cost estimate into consideration and other factors this EBITDA estimate supports an unlevered before-tax NPV10 of approximately $800 million and internal rate of return (IRR) of approximately 25%

Based on the growth profile of the market and the size of the Company-owned silica sand resource, CPS sees the potential to construct up to three additional equally sized manufacturing facilities at the same site. Through leveraging investment in common infrastructure, the second phase of the project that incorporates a doubling of manufacturing capacity, would increase the unlevered before-tax NPV10 to over $1.5 billion, the IRR to over 30% and is expected to be financed organically. Construction of the initial manufacturing facility and the associated silica sand extraction operation is estimated to take approximately two years to complete.

As reported on April 19, 2022, the Company has retained Green City Glass LLC to assist the Company in its selection of the key service providers needed to construct the Company’s solar glass manufacturing facility. Green City Glass will also provide oversight in vendor selection, plant design, construction management, commissioning, staffing and preparation for efficient and profitable plant operations. This process will result in a Class 2 capital cost estimate, which will provide a 90%+ certainty level, by the second half of 2022, and further validate the project’s strong economic returns for our current and future shareholders.

Additionally, the Company continues to advance other development initiatives that will bring the project to a shovel-ready status, by Q1 2023, including permitting, silica sand resource upgrading and testing and ongoing negotiations to secure firm commercial offtake agreements.

About Canadian Premium Sand Inc.
The Company is developing manufacturing capacity for ultra high-clarity patterned solar glass through a Company-owned facility to be located in Selkirk, Manitoba that utilizes the high-purity, low-iron silica sand from its wholly owned Wanipigow quarry leases and renewable Manitoba hydroelectricity. The Company is a reporting issuer in Ontario, Alberta and British Columbia. Its shares trade on the TSXV under the symbol "CPS".

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

CONTACT INFORMATION:

Forward Looking Information

Certain statements contained in this press release constitute forward-looking statements relating to, without limitation, expectations, intentions, plans and beliefs, including information as to the future events, results of operations and the Company’s future performance (both operational and financial) and business prospects. In certain cases, forward-looking statements can be identified by the use of words such as “expects”, “estimates”, “forecasts”, “intends”, “anticipates”, “believes”, “plans”, “seeks”, “projects” or variations of such words and phrases, or state that certain actions, events or results “may” or “will” be taken, occur or be achieved. Such forward-looking statements reflect the Company's beliefs, estimates and opinions regarding its future growth, results of operations, future performance (both operational and financial), and business prospects and opportunities at the time such statements are made, and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or circumstances should change. Forward-looking statements are necessarily based upon a number of estimates and assumptions made by the Company that are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Forward-looking statements are not guarantees of future performance. In particular, this press release contains forward-looking statements pertaining, but not limited, to: the market outlook and future pricing of solar glass; the plans to advance the first stage of the project; the capital cost estimate for the project; the ability to add future production capacity to accommodate the anticipated growth in solar glass demand; estimates of annual EBITDA; the expectation that CPS will be the lowest cost provider of patterned solar glass; NPV and IRR estimates; the potential to construct up to three additional equally sized manufacturing facilities at the same site and the benefits of such additional facilities; the timing for the construction of the initial manufacturing facility; the expectations that CPS will receive a Class 2 capital cost estimate and the timing for such estimate; the expectation that the project will provide for strong economic returns for our current and future shareholders; the other development initiatives the Company plans to advance; future development plans; industry activity levels; industry conditions pertaining to the solar glass manufacturing industry; the ability of and manner by which the Company expects to meet its capital needs; and the Company's objectives, strategies and competitive strengths. By their nature, forward-looking statements involve numerous current assumptions, known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to differ materially from those anticipated by the Company and described in the forward-looking statements.

A number of factors, risks and uncertainties could cause results to differ materially from those anticipated and described herein including, among others: the effects of competition and pricing pressures; effects of fluctuations in the price of glass products and raw materials input costs; risks related to indebtedness and liquidity, including the Company's capital requirements; risks related to interest rate fluctuations and foreign exchange rate fluctuations; changes in general economic, financial, market and business conditions in the markets in which the Company operates; the Company's ability to obtain, maintain and renew required permits, licenses and approvals from regulatory authorities; the stringent requirements of and potential changes to applicable legislation, regulations and standards; the ability of the Company to comply with unexpected costs of government regulations; liabilities resulting from the Company's operations; the results of litigation or regulatory proceedings that may be brought against the Company; uninsured and underinsured losses; risks related to the transportation of the Company's products, including potential rail line interruptions or a reduction in rail car availability; the geographic and customer concentration of the Company; the ability of the Company to retain and attract qualified management and staff in the markets in which the Company operates; labor disputes and work stoppages and risks related to employee health and safety; general risks associated with the glass manufacturing and sand quarry industries, loss of markets, consumer and business spending and borrowing trends; limited, unfavorable, or a lack of access to capital markets; uncertainties inherent in estimating quantities of products; processing problems; the use and suitability of the Company's accounting estimates and judgments; and the other risk factors outlined in CPS’s most recent Management’s Discussion and Analysis which is available on SEDAR at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in its forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will materialize or prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement. Readers should not place undue reliance on forward-looking statements. These statements speak only as of the date of this press release. Except as may be required by law, the Company expressly disclaims any intention or obligation to revise or update any forward-looking statements or information whether as a result of new information, future events or otherwise. Any financial outlook and future-oriented financial information contained in this press release regarding prospective financial performance, financial position, cash flows or EBITDA projections are based on assumptions about future events, including economic conditions and proposed courses of action based on management’s assessment of the relevant information that is currently available. Projected operational information contains forward-looking information and is based on a number of material assumptions and factors, as are set out above. These projections may also be considered to contain future oriented financial information or a financial outlook. The actual results of the Company's operations for any period will likely vary from the amounts set forth in these projections and such variations may be material. Actual results will vary from projected results. Readers are cautioned that any such financial outlook and future-oriented financial information contained herein should not be used for purposes other than those for which it is disclosed herein. The forward-looking information and statements contained in this document speak only as of the date hereof and the Company does not assume any obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable laws

Market, Independent Third Party and Industry Data

Certain market, independent third-party and industry data contained in this press release is based upon information from government or other independent industry publications and reports or based on estimates derived from such publications and reports. Government and industry publications and reports generally indicate that they have obtained their information from sources believed to be reliable, but the Company has not conducted its own independent verification of such information. This press release also includes certain data derived from public filings made by independent third parties. While the Company believes this data to be reliable, market and industry data is subject to variations and cannot be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any statistical survey. The Company has not independently verified any of the data from independent third-party sources referred to in this press release or ascertained the underlying assumptions relied upon by such sources.

Non-GAAP Financial Measures

In this press release, CPS has used the following term (a “Non-GAAP Financial Measure”) which is not defined by International Financial Reporting Standards (“IFRS”) but is used by management to evaluate the performance of CPS and its business: "EBITDA". EBITDA is defined as earnings before interest, taxes, depreciation and amortization. This measure may also be used by investors, financial institutions and others to assess CPS’s performance and ability to service debt. Non-GAAP Financial Measures do not have standardized meanings prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Securities regulations require that Non-GAAP Financial Measures are clearly defined, qualified and reconciled to their most comparable IFRS financial measures. Except as otherwise indicated, Non-GAAP Financial Measures are calculated and disclosed on a consistent basis from period to period. Specific items may only be relevant in certain periods. The intent of Non-GAAP Financial Measures is to provide additional useful information to investors and analysts, and the measures do not have any standardized meaning under IFRS. The measures should not, therefore, be considered in isolation or used in substitute for measures of performance prepared in accordance with IFRS. Other issuers may calculate Non-GAAP Financial Measures differently. Investors should be cautioned that EBITDA should not be construed as an alternative to net earnings, cash flow from operating activities or other measures of financial results determined in accordance with GAAP as an indicator of CPS’s performance.

Currency

All references to “$” in this press release are to Canadian dollars, unless otherwise noted.

Endnote

Internal financial modeling based on: capital and operating cost details from the FEED study; current solar glass price data from Singapore Solar Exchange and PV InfoLink; and logistics quotes for delivery costs of solar glass to North American locations. Implicit in forward-looking information in respect of the EBITDA projections contained in this press release are certain current assumptions, including, among others, that the Company will continue to execute on its strategy of developing manufacturing capacity for solar glass, attracting customers and end-users, realize operational efficiencies from its integrated sand quarry, and extract procurement and cost synergies on time and on budget. Additional assumptions include no changes to the current economic environment, no material changes in interest rates and foreign exchange rates, procurement, development or supply costs, access to equity and debt capital and sufficient cash flow for ongoing operations. These assumptions are based on the fact that funding for the construction of the facility will be obtained, the project will receive final investment decision approval from the CPS board and the ultimate construction of the facility will proceed as scheduled and on budget, markets for solar glass and access to end markets. See also “Forward Looking Information” above.