At Manigotagan, 170 km northeast of Winnipeg, Gossan continues to develop a silica sand deposit on the east shore of Lake Winnipeg. The Property, which after a June 3, 2010 grant of an additional lease encompasses 306 hectares, is directly across from Black Island where silica sand was extensively quarried prior to the island becoming a Provincial Park.
Drilling at Manigotagan has been successful in outlining substantial zones of silica sand with a thickness exceeding 5 metres and ranging to over 15 metres. Two zones, with lengths known to exceed 400m and 600m, are both open on one or more sides. The deposit has been outlined in three drill programs totalling over 60 holes.
Samples of Manigotagan silica sand have been subjected to a variety of tests that indicate it is of a high purity with few contaminants and that it is similar to the silica sands previously quarried at nearby Black Island.
Test results of Manigotagan silica sand have exceeded all of the minimum standards for frac sand proppant used by the oil and gas industry. Testing conducted by PropTester Inc. has resulted in samples of the 20/40, 30/50, 40/70 and 70/140 mesh fractions consistently meeting ISO 8K and 9K Proppant ratings. Pressure conductivity tests have also been conducted on samples of the 40/70 and 70/140 mesh fractions with positive results.
In the Fall of 2010, Gossan received the results of a marketing study conducted by World Industrial Minerals of Arvada, Colorado.The study establishes that the highest and best use of Manigotagan silica sand is as frac sand proppant used in the oil and gas sector. The sand is also suitable for the following markets: fiberglass, recreation, metallurgical, construction, filtration, and well pack. Demand for frac sand proppant is rebounding as the technology of drilling multi-fraced horizontal oil and gas wells utilizes large amounts of frac sand proppant. Additionally, the study provides an analysis of the 17 companies producing frac sand proppant in North America and an assessment of candidates suitable for a strategic partnership in Gossan’s Project.
The Manigotagan silica sand study makes five recommendations: investigate the feasibility of establishing a processing plant at mine site and the logistics of shipping by truck or barge to railhead; initiate a review and time line of required extraction and processing permits; complete a NI 43-101 report on the deposit; and initiate a prefeasibility study on the Project’s economics.
Gossan is actively examining the potential development of the Manigotagan Frac Sand Deposit and considering joint venturing the Property.