Select Sands Reports First Quarter 2017 Results

VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 31, 2017) - Select Sands Corp. ("Select Sands" or the "Company") (TSX VENTURE:SNS)(OTCQX:SLSDF) today announced financial and operational results for the first quarter of 2017 and that it has filed its 2017 first quarter financial statements and associated management's discussion and analysis on www.sedar.com. All results are stated in Canadian dollars (CAD) unless noted otherwise as US dollars (USD). The average currency conversion used for the first quarter is $1 USD = $1.3238 CAD.

First Quarter 2017 Financial Highlights

• The Company achieved the ability to produce commercial quantities of frac and industrial sand and as a result, commercial production commenced at the start of the quarter.
• Total revenue for the quarter was $1.5 million; comprehensive loss was $2.8 million, or $0.04 basic and diluted loss per common share, including $2.2 million in non-cash share-based compensation.
• EBITDA loss was $0.8 million. EBITDA is a non-IFRS financial measure and is described and reconciled to net loss in the table under "Non-IFRS Financial Measures".
• Gross margin loss for the Company's Ozark Operations was $428,862 for the quarter, and showed a positive gross margin of $125,110 during March.
• Net investment in property, plant and equipment was $3.3 million, including $1.3 million for the purchase of the Bell Farm Property with 49.6 million tons of Inferred Mineral Resources (see press release dated April 13, 2017).
• As of March 31, 2017, cash and cash equivalents were $6.8 million. Warrants and option exercises generated cash of $1.1 million during the quarter.
• Inventory on hand at the end of the quarter was $0.8 million.

First Quarter 2017 Operational Highlights

• Sales volumes and average prices, net of transportation (in tons and USD per ton, respectively):

• Delivered first truck shipment of frac sand for the oil and gas sector in January and rail shipments began in February.
• The first nine rail cars arrived in February increasing to a total of 67 cars by March. Continued escalation of rail car count is expected for the remainder of 2017.
• Signed first long-term supply agreement that included quarterly price adjustments during the term of the agreement. Shipments started in March with one million ton commitments in 2018 and 2019.

Second Quarter Production Outlook

The Company expects second quarter 2017 total frac and industrial sand sales volumes to increase between 40% to 60% over the first quarter. The impact on production and related shipments from flooding during an approximate two-week period earlier in the second quarter is factored in.

Zig Vitols, President and Chief Executive Officer, commented, "Overall, we were pleased with our 2017 first quarter results and are encouraged to have all our products favorably received by the oil and gas sector. As expected, start-up costs and low initial volumes had a significant impact on the first half of the quarter, but by March our gross margin had turned positive. I am very appreciative with the efforts of our management team and particularly our production personnel in reconfiguring plants and maintaining a quality standard, considering that shipments to the oil and gas sector started less than a month after closing the Ozark acquisition. Meanwhile we have had no less than ten training sessions to instill a strong safety culture as we further assemble our team."

Ozark Operations

Since closing on the Ozark Premium Sand asset acquisition in December, the Company has been re-commissioning previously idled assets such as dryers and wet plants and acquiring additional operating assets, including the Newport Rail Loading Facility where the Company can load 25 rail cars within 24 hours. The Ozark Operations now consist of six operating components: Sandtown Mine, Bell Farm Holdings, Freeze Farm Wet Plant, Maple Springs Wet Plant, Possum Grape Dry Plant, and Newport Rail Loading Facility.

During the first quarter of 2017, Select Sand focused on transitioning the Ozark Operations from a brown sand excavation based process to a drill and blast quarry operation to mine premium Northern White frac sands. Improvements were also made in rail logistics, increased plant capacity and efficiencies. A partial list of the enhancements includes:

• Track mounted crushers installed at Sandtown;
• Installation of an additional cyclone and pump for capacity increases at Freeze Farm
• Refurbishment of previously dormant dryer with a new burner and re-flighting at Possum Grape Dry Plant;
• Additional transfer bunker capacity at Possum Grape and wet product storage at Freeze Farm;
• Lease to purchase of Newport Rail Facility;

Because of the substantial physical production capacity and the sustained production of commercial quantities of frac sand, management determined that commercial production had commenced. Accordingly, the capitalization of development costs ceased and the capital costs were transferred to property, plant and equipment. Revenue and expense from its operations are now recorded in operating results for the quarter.

The Company advises that the production decision on the Sandtown deposit was not based on a Feasibility Study of mineral reserves, demonstrating economic and technical viability, and, as a result, there may be an increased uncertainty of achieving any level of recovery of minerals or the cost of such recovery, including increased risks associated with developing a commercially mineable deposit. Historically, such projects have a much higher risk of economic and technical failure. There is no guarantee that production will occur as anticipated or that anticipated production costs will be achieved.

Elliott A. Mallard, PG of Kleinfelder is the qualified person as per the NI-43-101 and has reviewed and approved the technical contents of this news release.

About Select Sands Corp.

Select Sands Corp. is an industrial Silica Product company developing its 100% owned, 520-acre Northern White, Tier-1, silica sands project located in Arkansas, U.S.A. Select Sands' Arkansas property has a logistical advantage of being significantly closer to oil and gas markets located in Oklahoma, Texas, New Mexico, and Louisiana than Wisconsin sources. The Tier-1 reference above is a classification of frac sand developed by PropTester, Inc., an independent laboratory specializing in the research and testing of products utilized in hydraulic fracturing & cement operations, following ISO 13503-2:2006/API RP19C:2008 standards.

Forward-Looking Statements

This news release includes forward-looking information and statements, which may include, but are not limited to, information and statements regarding or inferring the future business, operations, financial performance, prospects, and other plans, intentions, expectations, estimates, and beliefs of the Company. Information and statements which are not purely historical fact are forward-looking statements. The forward-looking statements in this press release relate to the continued escalation of rail car count and second quarter 2017 frac and industrial sand sales volumes. Forward-looking information and statements involve and are subject to assumptions and known and unknown risks, uncertainties, and other factors which may cause actual events, results, performance, or achievements of the Company to be materially different from future events, results, performance, and achievements expressed or implied by forward-looking information and statements herein. Although the Company believes that any forward-looking information and statements herein are reasonable, in light of the use of assumptions and the significant risks and uncertainties inherent in such information and statements, there can be no assurance that any such forward-looking information and statements will prove to be accurate, and accordingly readers are advised to rely on their own evaluation of such risks and uncertainties and should not place undue reliance upon such forward-looking information and statements. Any forward-looking information and statements herein are made as of the date hereof, and except as required by applicable laws, the Company assumes no obligation and disclaims any intention to update or revise any forward-looking information and statements herein or to update the reasons that actual events or results could or do differ from those projected in any forward-looking information and statements herein, whether as a result of new information, future events or results, or otherwise, except as required by applicable laws.

Non-IFRS Financial Measures

The following information is included for convenience only. Generally, a non-IFRS financial measure is a numerical measure of a Company's performance, cash flows or financial position that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with IFRS. EBITDA is not a measure of financial performance (nor does it have a standardized meanings) under IFRS. In evaluating non-IFRS financial measures, investors should consider that the methodology applied in calculating such measures may differ among companies and analysts.

The Company uses both IFRS and certain non-IFRS measures to assess operational performance and as a component of employee remuneration. Management believes certain non-IFRS measures provide useful supplemental information to investors in order that they may evaluate Select Sand's financial performance using the same measures as management. Management believes that, as a result, the investor is afforded greater transparency in assessing the financial performance of the Company. These non-IFRS financial measures should not be considered as a substitute for, nor superior to, measures of financial performance prepared in accordance with IFRS.

Reconciliation of Net Loss to EBITDA for 2017 first quarter:

The Company defines EBITDA as net income (loss) before finance costs, income taxes, depreciation and amortization and share-based compensation. Select Sands uses EBITDA as a supplemental financial measure of its operational performance. Management believes EBITDA to be an important measure as they exclude the effects of items that primarily reflect the impact of long-term investment and financing decisions, rather than the performance of the company's day-to-day operations. As compared to net income according to IFRS, this measure is limited in that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in the company's business, the charges associated with impairments, termination costs or Proposed Transaction costs. Management evaluates such items through other financial measures such as capital expenditures and cash flow provided by operating activities. The company believes that these measurements are useful to measure a company's ability to service debt and to meet other payment obligations or as a valuation measurement.

Contact

Select Sands Corp.
Zigurds Vitols
President & CEO
(604) 639-4533
www.selectsandscorp.com