Why doesn't Victory capitalize on the frac sand?


With Minago's 11.2 million tonne frac sand deposit in the pit footprint and estimates of a possible 75 million tonne within the quarry license, (see page 4 of the MD&A of 3/31//2012) its easy to see the frac sand potential at Minago. With such potential Victory should invite an established Frac Sand Producer to drill the other frac sand deposits within the quarry license and when positive they can consider a JV.


The present NI-43-101 compliant 11.2 million tonne presently has an in ground value of about $700 million. Assuming that half of the estimated 75 million tonne in the quarry license is NI-43-101 compliant, Minago's total in ground frac sand could have a value of $3 billion.


Victory might then negotiate a JV covering the entire quarry license, but stipulate that excavation of overburden over the Minago pit footprint to be paid 100% by the JV partner, with the CAPEX for the Frac Sand Plant and Facilities shared according to the agreed upon JV percentages.

If such were the case, Victory would eliminate their cost oroverburden excavation, while the entire 11.2 million tonne of frac sand could be mined immediately and stored as per Victory's preliminary intention and be the by-product credit to nickel mining based on the JV percentage..