Tuesday, May 15, 2012

Commodities: "Midwest Sees a Sand Rush "

As I said in April's "What the Frack? U.S. Silica Up 24% since Feb. 1 IPO (SLCA)"
...The stock, at $21.16 is up a nickel today and 24.47% from the IPO... 
...What the frack?
Sand trades at a premium?

We have four fracking IPO's on our watch list and were going to patiently wait for the 180 days to pass, thinking that, what with the slowdown in gas drilling that we'd get a chance to swoop-n-scoop....
Well, with the downturn in the overall market and the drilling slowdown finally getting some traction, the stock closed at $13.11 on Monday.

From the Wall Street Journal:
Fracking Spurs Demand for the Stuff, Sparking a Mining Boom—and Vexing Some
Stephen Maturen for The Wall Street Journal
Freshly washed sand is sifted and sorted into piles at a Fairmount Minerals site in Menomonie, Wis. Next, it will be dried, stored and shipped.
WINONA, Minn.—Scouts armed with geological maps and elevations from Google Earth are knocking on doors in the upper Midwest in search of what seems too common to mine: sand.

The sedimentary material is in high demand among U.S. oil and natural-gas producers, setting off a sand rush in Wisconsin, Minnesota and other Midwestern states. While adding jobs, the mining boom is prompting pushback from some local residents, who are surprised by the frenzy and leery of its impact on their communities.

Sand mined in the Midwest is used in places such as North Dakota and Pennsylvania to tap oil and gas reserves. The U.S. producers' demand for sand reached 28.7 million tons in 2011, up from six million tons in 2007, according to independent laboratory PropTester Inc. and consultancy Kelrik LLC....MORE
As far as I knhow, U.S. Silica is still the only publicly traded name in the space