Mr. Zig Vitols reports

SELECT SANDS REPORTS RESULTS FOR SECOND QUARTER 2023

Select Sands Corp. has released operational and financial results for the three months ended June 30, 2023 (Q2 2023), and will file its financial statements and associated management's discussion and analysis on SEDAR+ by end of day. All dollar references in this release are in U.S. dollars.

Key highlights:

• Sold 53,894 tons of frac and industrial sand during Q2 2023 compared with 83,027 tons in the three months ended March 31, 2023 (Q1 2023), and 83,207 tons in the three months ended June 30, 2022 (Q2 2022). As discussed in the company's Q1 2023 earnings release, Select Sand's guidance for Q2 2023 frac and industrial sand sales volumes was 45,000 to 60,000 tons.
• Recorded revenue of $3.2-million and a gross loss of $100,000 in Q2 2023 versus $5.1-million of revenue and gross margin of $400,000 in Q1 2023, and revenue of $5.3-million and gross margin of $1-million for Q2 2022.
• Reported a net loss of $1-million, or one cent per share, in Q2 2023 compared with a net loss of $500,000, or one cent per share, in Q1 2023 and net income of $100,000, or nil per share, in Q2 2022.
• Generated an adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss of $400,000 for Q2 2023 versus positive adjusted EBITDA of $100,000 in Q1 2023 and $700,000 for Q2 2022.
• As of June 30, 2023, cash and cash equivalents were $500,000, accounts receivable was $400,000, and inventory was $4.4-million. Of note, the company has received full payment on all of its accounts receivable balance outstanding on June 30, 2023.

Zig Vitols, president and chief executive officer, commented: "While clearly less than we would have liked, our second quarter sales volumes levels did come in above the midpoint of our guidance range. Substantially impacting second quarter sales tons was the continued evolvement of one of our largest customer's schedule of field development activities and previous product purchase obligations. The industry dry spell has affected any brokerage and transload opportunities at the George West facility as well. Unfortunately, this trend continued into the third quarter as U.S. rig activity levels measured last week declined 11 per cent from three months earlier and more than 15 per cent from this same time last year. We quickly reacted to the lower sales volumes backdrop by reducing staffing levels and temporarily halting certain production activities to save on cash outlays for blasting, electricity, fuel and other expenses until our sales outlook improved. I am pleased to report that we have just recently received an uptick in customer interest for products, although it is substantially for deliveries that will occur in the fourth quarter. In short, we look forward to an improved sales environment beginning in the fourth quarter based on recently scheduled frac sand jobs and additional scheduling conversations."

Financial summary

The attached table includes summarized financial results for the three months ended June 30, 2023, March 31, 2023, and June 30, 2022, as well as for the six months ended June 30, 2023, and June 30, 2022.

Select Sands sold 53,894 tons of frac and industrial sand during Q2 2023 compared with 83,027 tons in Q1 2023. Sales volume levels for Q2 2023 were below the full shipment capability of the company's Arkansas operations (approximately 150,000 tons per quarter). This presents the opportunity for continued improvement in sales volumes (and the ability to spread fixed costs over a wider base of tons produced) over time.

For Q3 2023, the company expects frac and industrial sand sales volumes to be forecasted the same as Q2 2023 at 45,000 to 60,000 tons. As previously discussed, the company has recently received an uptick in customer interest for products, although it is substantially for deliveries that will occur in the fourth quarter.

Outlook

Mr. Vitols concluded: "While our sales volumes levels for the second quarter and third quarter to date have been lower than we anticipated at the beginning of the year, we continue to have a positive outlook on the long-term dynamics of the oil and gas industry. Supporting this view is the U.S. EIA's projection that hydrocarbons will remain the most used energy source in the U.S. through 2050. We look forward to continuing to support oil and gas operators in their ongoing field development efforts designed to maximize the ultimate recovery of their inventory of assets through use of our premium Northern White sand product offerings that are located much closer to key oil basins in the Southern U.S. compared with the majority of other Northern White sand producers. As in the past, I want to thank our work force for their continued hard work and dedication. As important, we appreciate the support of our shareholders as we remain squarely focused on driving long-term value through our targeted sales efforts, efficient operations, and evaluation of external opportunities designed to prudently expand the business and provide a solid risk-adjusted return on investment."

About Select Sands Corp.

Select Sands is an industrial silica product company, which wholly owns a Northern White silica sands property and related production facilities located near Sandtown, Ark. Select Sands' goal is to become a key supplier of premium industrial silica sand and frac sand to North American markets. Select Sands' Arkansas properties have a significant logistical advantage of being significantly closer to oil and gas markets located in Oklahoma, Texas, Louisiana and New Mexico than the majority of sources of similar sands from the northern Midwest area such as Wisconsin. Select Sands also operates a transload facility in George West, Tex., in Live Oak county that serves customers operating in the Eagle Ford shale basin. The facility has a capacity for 180 rail cars and is equipped with two offload/loading stations with dedicated silos for a high-throughput capacity. In addition to transloading Select Sands products, the company sells other sand products from this facility and is able to offer transload services.

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