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Phoenix Metals Signs LOI on Titanium Project – Will Test the Titanium for Suitability as a Raw Material for use as a Hydraulic Fracturing Proppant

Posted by nexvucapital on July 16, 2014

Phoenix Metals Signs LOI on Titanium Project – Will Test the Titanium for Suitability as a Raw Material for use as a Hydraulic Fracturing Proppant

Vancouver, B.C.: Phoenix Metals Corporation (“Phoenix” or the “Company”) (TSX-V Symbol: PHC) is pleased to announce that it has executed a binding letter of intent (the “LOI”), pursuant to which the Company has been granted an option (the “Option”) to acquire a cumulative 100% interest in the 23 titanium/iron claims within the Dissimieux Lake Project (the “Property”) from Jourdan Resources Inc. (the “Optionor”).The Property is located 140 kilometres northwest of Baie-Comeau and 130 kilometres north of Forestville, Que., along the upper north shore of the St. Lawrence River.


The Company will have a period of 180 days (the “Due Diligence Period”) after receipt of regulatory approval to carry out due diligence procedures relating to the Property. The due diligence will test the mineralization from the Property for its suitability as a raw material source for hydraulic fracturing proppants. The Company will also test the suitability of the Iron mineralization for concentrate.

Phoenix is focused on the acquisition and development of raw material sources for hydraulic fracturing proppants.

The Company has the exclusive option to acquire a 100% interest in the titanium and iron in the Property (the “Option”) by completing the following, subject to TSX Venture Exchange approval: (i) paying to the Optionor $5,000 in cash upon the earlier of the execution of the Definitive Agreement and completion of the Due Diligence Period; (ii) issuing to the Optionor 2.3 million common shares on or before the expiry of the Due Diligence Period; and (iii) issuing to the Optionor another 2.3 million common shares upon commencement of production from the Property.

The Company shall be responsible for keeping the Property in good standing including the filing of required assessment work and completing regulatory work expenditures or making cash payments in lieu of work 180 days before the dates required under the rules of the jurisdiction.

The Property shall be subject to a 50 kilometre area of interest (the “AOI”) with the exception of existing claims held by the Optionor in the AOI. The Optionor will be the party designate for any further staking of claims in the AOI and will offer to the Company the titanium and iron interest in all potential titanium and iron prospects in the area where upon  the Company  will have 90 days in which to conduct due diligence on the additional claims following which the Company will have  the right to  acquire these additional claims  by refunding staking costs and issuing a further 100,000 common shares per claim to the Optionor.

The Optionor will have full access and ownership to the designated phosphate claims in the AOI while the Company will have full access and ownership to the designated titanium and iron zones on the claims within the AOI together with a reasonable area for mining activities. The Optionor will be the Operator on the Property until the commencement of development and will receive a 5% administrative fee for this service relative to the Property. The Property will be subject to a 4% gross royalty in favour of the Optionor.

Proppants and the Company’s Strategy

There are several classes of Oil and Gas Proppants:

–      Low-strength:               Sand and Resin-coated Sand

–      Medium-strength:      Ceramics

–      High-Strength:              Advanced Materials

The Company’s focus is on raw materials in the Medium and High-strength categories. The Company is currently working to acquire assets to serve the developed North American market and further assets that are proximal to large underdeveloped oil and gas resources that require hydraulic fracking proppants. The priority is on raw materials assets with known quantity and strong logistics and/or infrastructure.

Proppants have been critical to the major expansion of oil and gas production in North America. Ceramic proppants according to Accenture Research, represent 10% of the unit volume and 30% of expenditures in the US proppant market. Comprised of calcined bauxite, calcined kaolin or a mixture of both, ceramic proppants are often used in drilling deeper wells where the proppants can be subjected to higher pressure levels than in shallow wells. The majority of the North American ceramic proppants market is currently being served by products imported from China.

Market research from Freedonia Group, concluded that North American proppant demand has risen from $250 million in 2002 to nearly $5 billion in 2012 and overall demand is projected to reach over 100 billion pounds valued at $9.4 billion in 2017.


Phoenix will continue the Company’s non-brokered private placement of up to 10.0 million units at a price of five cents per unit ($0.05) to raise proceeds of up to $500,000. Each unit will consist of one common share and one common share purchase warrant (the “Unit Warrants”) with each Unit Warrant entitling the holder to acquire one additional common share at a price of 10 cents ($0.10) per share for one year from closing. The Unit Warrants are subject to the right of the Company to accelerate the exercise period for the Unit Warrants if the common shares of the Company trade above 20 cents ($0.20) for a period of 10 consecutive trading days. The proceeds of the private placement will be allocated toward general working capital purposes.

The Company may pay finders’ fees on the private placement proceeds to certain parties in accordance with the policies of and subject to the approval of the TSX Venture Exchange.

On behalf of the Board of Directors of

Phoenix Metals Corporation

“Brian Leeners”

Brian Leeners, CEO & Director

For further information please contact the Company

Tel: 604.568.1823

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.



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