Industry

Real Assets

Company Type

Mining Non-Metals

Location

Washington, USA

Size

$65  Million

Investment Type

Equity
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Helping Great Companies Grow

Overview

  • Parsons Energy Group is seeking $65 million to develop a fracking sand mine in Wisconsin
  • Phase 1:  Pre-development, plant design:  $9,000,000
  • Phase 2:  Development:  $53,500,000
    • Expected to supply long term sustainable fracking sand at best value from over 110 million tons of Northern White frac sand reserves
    • Size of deposit and favorable production conditions expected to produce a minimum of 2.5 million tons per year at economical cost per ton, with additional egress options of the mine to increase production to 10 million tons per year
    • Location of deposit has near access to the Mississippi River and four Class 1 Rail Lines provide excellent access to US and international markets
    • Parsons Energy has an Exclusive Supplier Agreement with a Native American-owned supplier providing a competitive advantage in the Bakken Region through TERO Regulations
Helping Great Companies Grow

Opportunity

  • Northern White Frac Sand
    • Recognized worldwide as the preferred fracking sand due to its superior quality – equating to superior performance
    • Significant demand
    • Limited future deposits that can be mined and transported economically
    • Deposits with economic access to multiple rail and barge transportation have a built-in market advantage
  • Established, mature markets in the U.S.
    • Bakken Market – Ft. Berthold Indian Reservation (A sovereign nation unaffected by US Government directives)
      • Forecasted 2021 demand for frac sand is 11.2 million tons (on reservation)
      • MHA Nation TERO regulations require companies to do business with Native American entities at preferred pricing opportunities
      • Native American frac sand suppliers have a captive market vs Non-Native supplier
    • Marcellus Market
      • Sand can be barged to the Marcellus resulting in less expensive product vs rail transportation via other suppliers
Helping Great Companies Grow

Solution/Strategy

  • Leverage PEG’s competitive advantages to gain a profitable share of the frac sand market
  • Leasehold rights to 110 million tons of Northern White reserves near Independence, Wisconsin
  • Develop a 2.5 million ton per year facility and make it scalable up to 10 million tons per year
  • Shallow overburden, pre-approved reclamation plan, all required permits, full municipality support
  • Access to four Class 1 Rail Lines and major river transportation via barge
  • Exclusive supplier agreement with a Native American-owned supplier licensed to conduct business on the Ft. Berthold Indian Reservation in the Bakken Region in North Dakota
  • Only TERO certified supplier of frac sand on the reservation – regulatory pricing advantage and regulatory preferred provider status over its competitors
  • Providing product on the reservation should lead to “supply demand creep” to the same customers producing oil on the land surrounding the reservation 
  • Barge access on the Mississippi River opens up oil & gas markets in the Marcellus Region in the eastern US, as well as international markets​​

 

Helping Great Companies Grow

Management

Rick Parsons

  • Extensive business knowledge and experience in all disciplines of engineering and construction
  • Founder and President of Northcon Inc., a successful and award-winning EPCM & GC organization successfully performing work since 1992, currently exceeding $75 million annually nationwide
    • Completed over 1,700 construction projects while leading Northcon’s growth from a small business to a large business, providing a trusted partner in project completion for its customer

Randy Smith

  • Extensive business knowledge and experience in all disciplines of engineering and construction
  • Founder and President of Northcon Inc., a successful and award-winning EPCM & GC organization successfully performing work since 1992, currently exceeding $75 million annually nationwide
  • Completed over 1,700 construction projects while leading Northcon’s growth from a small business to a large business, providing a trusted partner in project completion for its customers
Helping Great Companies Grow
Learn More About This Transaction

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Thanks, Ken

Ken Margolis | Managing Partner Castle Placement, LLC
1460 Broadway Street, Rte 400
New York, New York 10036
(212) 418-1188 | C: (516) 712-7784
kmargolis@castleplacement.com

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