Company is projecting $25/ton gross margin based on the phase I Wisconsin sand. They think they will achieve that level in Q3, which is right now.
With the demand, I think they are likely to get a good price because the Wisconsin sand is higher quality than any Canadian sand, including their own Minago sand.
We should find out pretty quickly if they made their goal. My concern is that they hadn't hired a full 3rd crew as of the last PR so they may not hit 500,000 ton/yr rate for the whole Q3 and so will not have a full qtr of $25/ton gross margins. But we should be able to get a good indication if they are in the ballpark.
I think they have a pretty idea of the costs to build a new mine. After all, their partner is an existing miner and would not let them project unrealistic numbers for their own JV.
I think that just phase I results for a few quarters should bump up the price. When/IF they make good progress on phase II, the market should anticipate those bigger production numbers and give them some credit for the potential. Potential requires that they hit their projections and prove that they can sell all of their 500,000tons per year production at good prices.
The JV will make a lot of difference because they will have assured supplies.
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