Sand miner is on a tear
Sand miner U.S. Silica Holdings (NYSE:SLCA) has doubled its share price year to date to $70.28 due to demand from the oil and gas industry.
The miner produces frac sand, high-purity quartz that is used to extract oil and gas. Just one hydraulic fracturing well can require a few thousand tons of sand.
This month U.S. Silica Holdings increased it guidance from $215 million to $225 million due to demand from hydraulic fracturing market. About half of U.S. Silica's sand goes to oil and gas operations. The Maryland-based company is the largest domestic producers of commercial silica.
The company is ramping up to meet demand. It plans to add 16 to 20 million tons of new capacity, a potential $1 billion capital investment. It estimates growth of two times EBITDA to $550-600 million by 2017 and between $900 million to $1 billion by 2020.
The company has 17 operating facilities throughout the eastern US with 366 million tons of reserves. U.S. Silica Holdings has over 1,000 employees.
Image of hydraulic fracturing operations by Simon Fraser University Press