Project

Project Introduction

NAFS has leased approximately 30,000 acres of land from the Hutterian Brethren Church of Eagle Creek Inc. Eagle Creek is located approximately 60 kilometers west of Saskatoon, Saskatchewan.
By drilling, backhoeing and testing approximately 250 holes, NAFS has tested 1,100 Acres for frac sand to date.
Norwest Corporation has prepared a NI-43-101 Technical Report which states that there is approximately 8.6 million tons of inferred resource on the land tested to date.
Norwest Corporation has confirmed that the four most common sizes of frac sand in demand by the oil and gas industry has been verified as 20-40,30-50, 40-70 & 70-140 all of which meet API standards.

Critical characteristics of the Property and lease include the following:

  1. There is minimal overburden on the property;
  2. The lease is for renewable 10 year terms;
  3. The terms of the lease are as follows:
    • a) $1 per acre per year payable annually until production;
    • b) Base Royalty Payment of $5 per tonne;
    • c) Royalties can be increased by 10% of the difference of the selling price and the base price of $80 per tonne.

Key Advantages

  • Under the supervision of an Independent Engineer, the Company has drilled 66 core holes and 107 backhoe holes for a total 173 holes
  • Under the supervision of Norwest Corporation (the author of the NI 43-101 Technical Report), the Company drilled a further 33 core holes and tested sand samples to audit the work of the previous Independent Engineer
  • The sand samples were processed and tested at the lab and a research council to establish that the sand had the requisite qualities to meet API standards
  • The total area tested was 12.9 million square feet with an average sand thickness of 10.5 feet
  • Deposits contains all the most common sizes with a small amount of tailings
  • Central Location is strategically located in Western Canada and to a major centre providing logistical advantage to the entire Western Canada and Northwestern US markets.
  • Close to major city – available workforce, no seclusion pay, ease of maintenance resulting in limited down time
  • NAFS has 1100 acres tested under lease with an additional 28,000 acres under lease
  • Royalty payments are on a fixed per tonne basis for the first term (10 years) and for subsequent terms (each 10 year terms); there are provision for price escalations
  • There are no access or maintenance fees
  • All royalties are paid after sand is sold
  • Close proximity to transportation provider, both truck and rail
  • Production cost is expected to be low
  • Little overburden
  • Uniformed sand deposit
  • Reclamation cost is expected to be low
  • Established relationship with all the major well service companies including a number of large Oil & Gas companies
  • Have government and municipality support

FUTURE EXPLORATION & DEVELOPMENT

PHASE I
Completed core drill program with Norwest Corporation and confirmed inferred resource of approximately 8.6 million tonnes.

PHASE II
Prove out economic resource by continuing to drill and test property and by preparing a Preliminary Feasibility Assessment

PHASE III
Construct facility; commence marketing and production activities; and,continue to explore, test and establish additional frac sand tonnage on our lease.

NAFS’ MARKET FOR FRAC SAND

NAFS is strategically located in an area of numerous tight oil and gas plays. Currently, demand is approximately 3.5 million tons per year in Canada of which 70% is imported. NAFS wants to market its frac sand to the nearby Alberta, Saskatchewan, Manitoba, North Dakota, and Montana basins by eliminating mounting transportation costs and logistic delays. See map on tight oil and gas plays in map section, which indicates NAFS target market.

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