WANIPIGOW SILICA SAND JANUARY 2020 INVESTOR PRESENTATION
Why Invest in CPS? CPS is uniquely positioned to succeed in a challenging Canadian market. • $30 CAD/MT cost advantage over largest importer • Northern White quality sand delivered to Montney at regional-mine cost-basis • Decades long resource of top-quality silica sand • First Nations participation 2
Wanipigow Quality CPS Wanipigow 3 rd Party Conductivity Results are similar to typical NWS Results Tier-1 and Tier-2 are commonly used terms in the industry and are used herein for illustration purposes only Conductivity at 8,000 psi, 150 o F and 2 lb/ft 2 for 50 hours between Ohio Sandstone Permeability at 8,000 psi, 150 o F and 2 lb/ft 2 for 50 hours, between Ohio Sandstone 5 6 350 20 7 6 5 1 Wisconsin (NWS) Wisconsin 1 7 40/70 Range 300 18 (NWS) CPS CPS 40/70 Range 40/70 40/70 4 2 2 3 Tier-1 (NWS) 4 250 16 md-ft Darcy Tier-2 (Regional) 10 8 200 14 Regional Tier-2 8 40/70 Sand 9 Regional Tier-2 10 150 12 40/70 Sand 11 11 9 Graph approximately to scale Conductivity of 40/70 sand Permeability of 40/70 sand StimLab Test Results for two samples from CPS Wanipigow Deposit Based on Wisconsin Sand Suppliers’ published data (Tier-1) Based on regional Alberta and Permian (TX) Suppliers’ published data (Tier-2) 1) US Silica NWS 4) BadgerFrac NWS T4070 7) Wisconsin Proppants LLC (WI) 8) Badger Pure Permian TM 11) Wisconsin Proppants LLC (TX) 9) Black Mountain Winkler White TM 2) Hi-Crush NWS 5) Covia (Fairmont) 3) Superior Silica NWS 6) BadgerFrac NWS FW4070 10) Athabasca Minerals Duvernay 3
Logistics Advantage & Current Market Rail access to all parts of Duvernay, Montney, Viking and Bakken activity Potential Unit-train access at 3 rd party transloads in Montney and Duvernay • Access to three Class 1 Railroads in Winnipeg with • Access to three Class 1 Railroads in Winnipeg with full-capacity rail (105 MT payload per car) full-capacity rail (105 MT payload per car) • Access to Western Canada and North Dakota demand • Access to Western Canada and North Dakota demand of over 11 million tonnes (2018 data) of over 11 million tonnes (2018 data) • Unit-train access into Montney & Duvernay 3 rd party • Unit-train access into Montney & Duvernay 3 rd party transloads transloads Lake Winnipeg Wanipigow Area Hub 4
Significant Cost Reductions Significant capital cost reductions achieved through: • Relocated dry-plant for direct rail-loading and natural gas access • Mobile plant configuration for ~1,260,000 MT/year • Reduced utility connection infrastructure at mine-site Associated operating cost reductions: • Cost-efficient transport between wet-plant and dry-plant • Utilize existing natural gas supply at dry-plant • Integrated dry-plant & rail load-out 5
Accomplishments since Q3-2018 Canadian Supplier of choice Secure funding to develop Wanipigow Establish CPS as the Q3 2020+ Achieve Final Investment Decision Detail design & subsequent revision to 43-101 Technical Report Q1-Q2 2020 Grow 3 rd party sales Establishing sales channels in Canada Q4 Value-add activities 2019 Generating revenue from 3 rd party sales Cultivated strategic partnership Streamlined Reduced capital Q3-Q4 with a large US-based frac-sand operations & & operating cost 2019 service provider logistics Q2 De-risking activities Completed 43-101 Technical Report demonstrating economic viability 2019 First Nations & local Government of Delineated the Obtained Q2 2019 stakeholders Manitoba’s Wanipigow Environmental - Q3 2018 participation support resource License 6
Convertible Debt Terms Offering Type Secured Amount $ 7 million to $ 10 million aggregate Deemed Price $1,000 per debenture Conversion Price $1.25 per share Annual Interest, accrued quarterly 12% Maturity 48 months Insider Participation of up to $2 million • Paramount Resources Ltd. • David Wilson (Kelt Exploration) • CPS Board & Management 7
Use of Convertible Debt Proceeds 1. Working capital to grow sales into Western Canada from Wisconsin mine 2. Bring Wanipigow Project to Final Investment Decision a. Update 43-101 Technical Report reflecting lower capital and operating costs b. Secure dry-plant site and apply for Development Permit 3 rd party transportation design and permitting c. 3. Definitive agreements with Hi-Crush Inc. for sand supply, equipment supply and project management 4. General corporate purposes 5. Brokerage costs 8
2-Year Share-Price Performance 250.00 CPS market-performance has followed the general trend seen in the frac-sand and oil-field services sectors at a macro level, not reflecting the value of CPS’ significant resource in close proximity to Western Canada 200.00 150.00 100.00 50.00 0.00 CPS CFW TCW SHLE SND HCR SLCA Canadian Calfrac Trican Source Smart Hi-Crush US Silica 9 Premium Sand Energy Sand
Board and Management Leadership Lowell Jackson, P. Eng Tom MacInnis , B.Comm., MBA, ICD.D Executive Chairman Director • 40+ years of technical, operational, and executive experience • Former Head of Financial Markets, Energy for National Bank in the oil and natural gas industry Financial, where he was responsible for leading the firm’s • Served as the CEO and President of both WestFire Energy Ltd. global energy practice and Real Resources Inc. • Previously co-founder and Managing Director of Tristone • Senior management roles at Grad & Walker Energy Capital Inc., an energy focused boutique investment bank Corporation from 1991 to 1997 Rod Sousa, B.Comm., CFA Todd Garman, B.Comm., MBA Director Director • Executive Vice-President, Corporate Development & Planning • President at Iron Horse Energy Services at Paramount Resources Ltd. • Previously spent several years as a partner and oilfield • Previously held senior executive roles as an oil and gas services analyst primarily at Peters & Co. Limited executive at TD Securities Inc. and Scotia Waterous Inc. John Assman Rick Williams, B.A., LLB Director Director • Serves as a third-generation owner, President & C.E.O. of • Serves as president of Blackwell Investor Relations and Landtran Systems Inc. Waseco Resources • Provides funding to young businesses in an angel investor • Served as a corporate lawyer, PR professional, and an capacity executive in the junior mining industry for the past 30 years Glenn Leroux, P. Eng Anshul Vishal, P. Eng President and Chief Executive Officer VP, Business Development • Seasoned oilfield services executive with over 40 years of • Experienced business and venture development executive with experience, most recently served as CEO of Nilex Inc., a leading background in developing financial models, business plans, and distributor of geo-synthetics & heavy civil construction products strategy for start-ups • Former CEO of BOS Solutions Inc. leading its revenue growth • Experience in frac sand markets & competitive landscape, logistics from $22mm to a peak of over $200mm costs as well as sand supply-demand dynamics in Western Canada • Previously responsible for startup & management of • Registered engineer with previous midstream and large EPC project international operations for a Calgary based oilfield services firm & construction experience, currently completing an MBA program 10
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