There is a world away from stocks. Get in pre IPO in mining and commodity deals.
You are invited to participate in Project Black Diamond. You can find a short summary of the opportunity below along with a link to the data room containing all of the pertinent information. |
Deal Alert: Project Black DiamondJoin me in an exclusive opportunity to acquire a critical piece of U.S. oil and gas infrastructure, with reliable cash flow, at a 60% discount to construction costs.THE IDEAIn the fall of 2019, I found myself at a mining conference in Vail, Colorado strolling through the ski village with Nick D’Onofrio sipping coffee. Nick, halfway through a Master’s Degree at the Colorado School of Mines, had been working for me at Ri the last year – he’d recently convinced me to promote him from free intern to paid employee. This was our first time meeting in person. At the time, I was obsessed with a story about oil tycoon John D. Rockefeller that I couldn’t get out of my head or stop talking about. In Rockefeller’s pursuit of total U.S. oil domination he created a brilliant strategy for eliminating competitors. Controlling supply isn’t enough, you must also control movement. Back then, rail was the only way to deliver oil to market; without access to cheap transportation oil was stranded on site and essentially worthless. Instead of competing for oil fields, Rockefeller gained control of strategic rail networks and ruthlessly forced competitors to sell oil concessions to him at rock bottom prices, or be choked out of existence. “THIS!”I said to Nick, is what we need to bring to Ri. “Access to strategic energy infrastructure. And if you really want to succeed here you need to find it!”THE OPPORTUNITYTwo years later Nick was on a chairlift in Whistler, another ski town near his new home in Vancouver. He struck up a conversation with the guy crammed into his left – a man working for a mid-sized U.S. commodity trader. Part of his job was managing a frac sand terminal in North Dakota that he’d purchased out of bankruptcy and built into a thriving business. Nick’s ears perked up. Most people don’t know it, but frac sand is the critical input for U.S. onshore oil and gas production. “This asset is special,” he told Nick, “transportation makes up 70% of the cost of frac-sand in this part of the world. This terminal is the cheapest operator in the region and essentially sets the price. It’s so efficient it was profitable at the height of COVID when oil prices went negative!” Nick had one question: Is it for sale?THE EXECUTION The next Resource Insider deal is years in the making.Project Black Diamond is an investment in the lifeblood of the American economy Energy Infrastructure.We will be purchasing, along with the team at Glenorchy Capital & Capitalist Exploits, a frac sand terminal in the heart of U.S. oil country: North Dakota’s Bakken formation. |
It’s taken us years of searching and negotiation to bring this deal to Members. It’s the realization of the strategy we began implementing on the side of a ski hill in October 2019 – buying critical cash flowing U.S. infrastructure. Why am I doing this deal?The GREAT ONSHORING.Energy production is coming home to the USA, and I believe we are about to see a massive inflow of capital to develop the output of American energy. We’ve just seen the tip of the iceberg in the recent acquisitions of the frackers Pioneer & Hess by the super majors Exxon and Chevron. I might not be able to compete with Exxon buying oil wells, but, like Rockefeller, I can control critical infrastructure. Today, I can buy infrastructure for pennies on the dollar.I’m looking for:Exposure to energy;Exposure to the USA; Exposure to Cash Flow; Assets that have a unique and defensible moat; andExposure to an asset NOT listed on capital markets.I’m not looking to reinvent the wheel. We’re looking to make money by acquiring an asset with a dead simple business model, a capable team, and a proven track record.Let’s dig in… What is frac sand… and why should I care?Without frac sand there is no fracking. When an O&G well is fracked, high grade frac sand is mixed with water and pumped into the ground; the sand holds the fissures open, allowing oil and gas to flow out of the rock to the surface. Without frac sand there would not be any significant onshore O&G production in the USA.What is the Bakken?The Bakken Formation, located in North Dakota, Montana, and Canada, is the second largest oil and gas basin in North America behind only the Permian Basin in Texas. North Dakota ranks third in the nation, after Texas and New Mexico, in both crude oil reserves and production. It’s also where Hess (recently purchased by Chevron) has much of their U.S. operations. BUT, unlike the Permian, which is full of frac sand mines, there are no frac sand mines in the Bakken. This means: EVERY TONNE OF THIS CRITICAL MINERAL MUST BE SHIPPED IN. In this part of the world, transport accounts for up to 70% of the cost of frac sand. It is critical that miners and frackers move this critical element as cheaply as possible. And, as you likely know, the ONLY way to do that effectively over land is rail… which brings us to: What is a Frac Sand Terminal?Frac sand is shipped into the Bakken by rail.Once in North Dakota, rail cars drop the frac sand off at a terminal – a storage facility serving as the central hub where sand is unloaded, stored, and reloaded onto trucks for delivery to drill sites. Think of it as the hub and spokes model. |
The terminal owners never take ownership of the frac sand, they simply charge transloading and storage fees on the volume of sand that comes through the terminal. The sand is already pre-sold before it reaches the terminal, so the terminal’s job is purely to manage the logistics and operations of smooth delivery of the sand. Like I said: Simple. BUT, not all terminals are created equal.. So, what makes THIS terminal unique? 1. LOCATION, LOCATION, LOCATION This terminal is the only full-scale terminal on the Canadian Pacific (“CP”) railroad, which has a direct line from Wisconsin, hosting some of the highest quality sand mines in the world. Sand has to meet rigorous specs for it to be used in fracking. Frac sand must be composed of pure quartz grains to avoid chemical reactions, spherical to prevent clogging, uniform in size, and strong enough to withstand the high pressures in the well. There are no high-quality deposits in or near the Bakken. This means that it has to be imported, largely from Wisconsin, which has the closest deposits. |
To Read More about this deal and future deals Click Here