Athabasca Minerals Inc.

For the 3 months ended September 30, 2022, revenue net of royalties was $11.5 million, up $7.2 million or 166% from $4.3 million in Q3 2021. For the 9 months ended September 30, 2022, revenue net of royalties was $25.8 million versus $8.6 million in 2021. Q3 gross loss was $0.8 million versus gross profit of $0.4 million in Q3 2021; excluding noncash depreciation, depletion and amortization, gross profit was $0.3 million. For the 9 months ended September 30, 2022, gross loss was over $18,000 versus gross profit of $1 million in 2021; excluding noncash DDA, gross profit was $2.1 million. Q3 net loss was $2.2 million versus $0.4 million a year ago. Management did not provide formal next-quarter or full-year financial guidance, but said Western Canada frac sand prices have seen continued upward pressure quarter over quarter and that Q4 and Q1 pricing trends appear similar. They also said Wisconsin transload capacity could rise from about 80,000 to 90,000 tonnes per month to 120,000 to 130,000 tonnes per month, and they expect another 100 railcars in the next 90 days and another 100 in Q2.

Dana Archibald said the company has been reset around shareholder feedback and is now focused on AMI Silica as the central growth engine. He emphasized progress in the Wisconsin sand business, including over 1 million tonnes dried and over 2 million tonnes mined and washed since the March acquisition, while also highlighting a transload agreement with CRL as an early step to expand into the Canadian Western Basins. His tone was constructive but realistic, repeatedly acknowledging logistics as a key challenge and noting that the business is being built through capacity, customer access, and a broader transload network.

David Churchill framed Q3 as a strong revenue quarter with lower profitability because of the earnings profile of the new Wisconsin assets and logistics-related costs. He pointed to $11.5 million in Q3 revenue net of royalties, $25.8 million year to date, a $0.8 million Q3 gross loss, and a $2.2 million net loss, explaining that over $1.1 million of Q3 DDA and $2.2 million year-to-date DDA weighed on results. He also said G&A rose to $1.2 million from $0.5 million due mainly to headcount in RockChain, and noted the company is reducing G&A in noncore businesses while expecting no significant issues from the Wisconsin acquisition beyond possible noncash audit-related purchase price adjustments.

Analysts asked about Western Canada frac sand pricing, and management said pricing has shown quarter-over-quarter upward pressure since March and that the trend continued into Q4 and looks similar for Q1 next year. On transload capacity, management said Wisconsin can currently move about 80,000 to 90,000 tonnes per month, with upgrades potentially lifting that to 120,000 to 130,000 tonnes per month. Questions on write-offs and clean P&L drew a response that there were no Q3 write-offs tied to Wisconsin, while rail disruptions, a possible strike threat, and a bridge fire were described as hard-to-predict external issues; management also said sales are still mostly spot, with volume commitments being pursued rather than price commitments.