TSX-V: SNS | OTCQX: SLSDF Corporate Presentation | August 2018 First in Quality Uniquely Positioned for Success www.selectsands.com
TSX-V: SNS | OTCQX: SLSDF Disclaimer This presentation includes forward-looking information and statements, which may include, but are not limited to, information and statements regarding or inferring the future business, operations, financial performance, prospects, and other plans, intentions, expectations, estimates, and beliefs of the Company. Information and statements which are not purely historical fact are forward-looking statements. Forward-looking information and statements involve and are subject to assumptions and known and unknown risks, uncertainties, and other factors which may cause actual events, results, performance, or achievements of the Company to be materially different from future events, results, performance, and achievements expressed or implied by forward-looking information and statements herein. Although the Company believes that any forward-looking information and statements herein are reasonable, in light of the use of assumptions and the significant risks and uncertainties inherent in such information and statements, there can be no assurance that any such forward-looking information and statements will prove to be accurate, and accordingly readers are advised to rely on their own evaluation of such risks and uncertainties and should not place undue reliance upon such forward-looking information and statements. Any forward-looking information and statements herein are made as of the date hereof, and except as required by applicable laws, the Company assumes no obligation and disclaims any intention to update or revise any forward-looking information and statements herein or to update the reasons that actual events or results could or do differ from those projected in any forward-looking information and statements herein, whether as a result of new information, future events or results, or otherwise, except as required by applicable laws. All cash figures shown in this presentation are in US dollars unless otherwise noted. www.selectsands.com 2
TSX-V: SNS | OTCQX: SLSDF About Select Sands Select Sands’ goal is a supplier of Select Sands Corp. is an industrial Silica Sand products company in production on its q premium commercial silica sand and 100% owned project in Arkansas, U.S.A.; industrial frac sand to the North The company produces Northern White, finer mesh sand- 40/70 Mesh and 70/140 q American markets. Mesh (100 Mesh) and has a combined Inferred/Indicated Resources of ~90MM tons between its properties*; Strategically located to oil & gas (O&G) and industrial customers in Texas, Oklahoma, q Louisiana, Colorado, New Mexico and elsewhere; Year-round production and shipping capabilities with access to three modes of delivery q by truck, rail and barge; Fully funded expansion plans to 1,000,000 tons of production by the end of 2018. q *Includes Bell Farm of 49.6MM tons Inferred Mineral Resources (Keinfelder, April 2017) and Sandtown of 42.0MM tons Indicated Mineral Resources (Tetra Tech, February 2016). National Instrument 43-101 technical reports are available on www.sedar.com. www.selectsands.com 3
TSX-V: SNS | OTCQX: SLSDF Fra c S a n d D e m a n d & O u tlo o k US Onshore Frac Sand Demand In millions of tons 133 q Tudor, Pickering, Holt & Co. estimates approximately 112 million 140 tons of sand would be used in 2018, with 133 million tons in 120 112 2019; 100 q 2018 consumption forecast is a 47% increase over 2017; 76 80 q “The appetite for sand is strong, and the competitive new in- 54 60 basin supply is not coming online as quickly as initially projected. 44 37 36 So, we see prices continuing to move up at this point in the 40 29 25 cycle.” (Hi-Crush Q1 earnings call). 20 q Northern White sand is expected to see persistently strong 0 demand due to its superior characteristics and market 2011 2012 2013 2014 2015 2016 2017 2018e 2019e uncertainty over the effectiveness of alternatives Source: TPH & Co. Research, IHS Markit, Discussions with industry participants April 9, 2018 www.selectsands.com www.selectsands.com 4
TSX-V: SNS | OTCQX: SLSDF N o r th e r n W h ite S ilica : A S u p e r io r P ro d u c t High quality sand available based on extremely tight O&G and industrial sand q specifications and widely preferred over lower quality, alternative sands (such as regional or in-basin) Predominantly mined in the North Midwestern US (Wisconsin, Minnesota and q Illinois) and transported to basins in the Southern US Over the past decade E&P companies have shifted from coarser grains and q vicious fluid to finer mesh and slickwater treatments to increase recoveries 80% of the sand consumed in the U.S. is the finer grades of 40/70 and 100 q Least Restricted Angularity Impedes mesh. Source: IHS Markit February 2018 Hydrocarbon Flow Hydrocarbon Flow ACC Thematics, AltaCorp Capital, Investing in the North American Proppant Industry, June xx, 2018 www.selectsands.com www.selectsands.com 5
TSX-V: SNS | OTCQX: SLSDF S trate g ic L o catio n FRAC INDUSTRIAL q Positioned closer to the most active onshore basins (Permian, Eagle Ford, Haynesville, etc.) relative to competing Northern White sand operations for lower mine-to-market transportation costs; q Barging capabilities on Mississippi River allows for large (8-10k ton) cost-effective movements. q Year-round production, while northern mines halt production in extreme cold weather, combines favorably with a business friendly state. q Majority of shipment go to the Texas Basins with the remainder heading to Colorado, Louisiana and Oklahoma Strategically located for rail, barge, and highway delivery 6 www.selectsands.com 6
TSX-V: SNS | OTCQX: SLSDF S e le c t S a n d s A s s ets Sandtown 30 Miles Independence Ozark Independence Sandtown Bell Farm Operation Operation Wet Plant #1 Rail Loading Facility Capacity 42MM Tons* 49MM Tons** 600,000 TPY 400,000TPY Wet Plant #2 Type Mine Mine Wet & Dry Wet & Dry Processing Processing Status Active Mine Cleared & Ready In Full Under future mining Production Construction 2 Miles * Indicated resource as per TetraTech 43-101 report 2016 Dry Plant ** Inferred resource as per Kleinfelder 43-101 report 2017 Rail Serviced by the Union Pacific Railroad 7 www.selectsands.com 7
TSX-V: SNS | OTCQX: SLSDF Fu lly Fu n d e d E x p a n s io n / I n d e p e n d e n c e P ro p e r ty Phase 1 : Construction has begun on a 400,000 TPY stand alone processing Sandtown 30 Miles facility at Independence (estimated completion second half of 2018) q Anticipated mine-to-plant savings of approximately $4 per ton in transportations savings; Phase 2 : Move Ozark Premium operations/equipment to Independence to further increase transportation. (targeting project in 2019). Phase 3 : Option to build a rail loadout at Independence for efficient and economical loading of finished products. 2 Miles Phase 1 is fully funded through secured CAPEX loan & internal funding. 8 www.selectsands.com 8
TSX-V: SNS | OTCQX: SLSDF Sandtown (30 miles) Phase 1: 400,000 TPY stand alone facility (complete 2 nd half 2018) Phase 3: Option to construct rail loadout at Independence. Phase 2: Consolidate Ozark assets to Independence (targeting project in 2019) The Independence property will serve as a platform to support the company’s long-term operational and capacity expansion initiatives. www.selectsands.com 9
TSX-V: SNS | OTCQX: SLSDF TSX-V: SNS | OTCQX: SLSDF U n it Vo lu m e in To n s a n d E B I T DA $3,000 250 $2,500 200 $2,000 EBITDA ,000’s ,000’s $1,500 150 Tons $1,000 100 $500 * $0 50 -$500 -$1,000 0 Q1 Q2 Q3 Q4 Q1 Q2 2017 2018 Tons Adjusted EBITDA • Q4 Adjusted EBITDA restated for $270K bad debt expense collected in Q2 2018 • Q2 2018 Reverse adjustment to reflect collection noted above. www.selectsands.com 10
TSX-V: SNS | OTCQX: SLSDF TSX-V: SNS | OTCQX: SLSDF Fin a n c ia l H ig h lig hts Metric Performance Record revenues of $9.5M (USD) in Q2 2018, a 68% Revenue Growth increase from Q1 2018 and over 300% from Q2 2017 31% margins on adjusted EBITDA of $2.9M in Q2 2018 EBITDA and adjusted EBITDA growth of more than 100% from Q1 Average quarterly price increase of 3% Strong Pricing Plans to ramp up to 1 million tons by end of 2018 Continuing Growth www.selectsands.com 11
TSX-V: SNS | OTCQX: SLSDF TSX-V: SNS | OTCQX: SLSDF E B I T DA Reconciliation of Net Income (Loss) to EBITDA to Adjusted EBITDA * Restated in US Dollars using the average 2017 CAD/USD foreign exchange of 1.2986 www.selectsands.com 12
TSX-V: SNS | OTCQX: SLSDF Share Structure Data as of June 21, 2018 Shares Issued & Outstanding 83,313,316 Warrants 4,139,780 SNS Options 5,089,333 Fully Diluted 97,542,429 Market Cap $28M USD SLSDF q In March 2018, the Company increased its line of credit to $5M www.selectsands.com 13
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