Industry

Real Assets

Company Type

Mining Non-Metals

Location

Washington, USA

Size

$102  Million

Investment Type

Equity
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Helping Great Companies Grow

Overview

  • Parsons Energy Group is seeking $102 million to develop a fracking sand mine in Wisconsin
  • Phase 1:  Pre-development, plant design:  $12,000,000
  • Phase 2:  Development:  $90,000,000
    • 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

CONTACT US

Hi. We're not around right now. But you can send us an email and we'll get back to you, asap.

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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