Smart Sand, Inc 10-K for FY2025
Smart Sand, Inc. (SND)
10-K
2026-02-26
For: 2025-12-31
View Original
Added on
April 07, 2026
About this 10-K
Smart Sand, Inc filed this 10-K on February 26, 2026, covering the fiscal year ended December 31, 2025 (FY2025).
Headline figures
Fiscal year ended December 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $330.15M
- up 6.0% from $311.37M a year earlier
- Net income
- $1.35M
- down 55.0% from net income of $2.99M a year earlier
- Diluted EPS
- $0.03
- down 62.5% from $0.08 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________________________
FORM 10-K
__________________________________________________
| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the Annual Period Ended December 31 , 2025
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the Transition Period from ___ to ___
Commission file number 001-37936
__________________________________________________________________________________________________________________________________________________________________________________________
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | ||||
( | |||||
| (Address of principal executive offices, zip code) | (Registrant’s telephone number) | ||||
| Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Securities registered pursuant to Section 12(g) of the Act: None | ||||||||||||||
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated Filer ☐ | Smaller reporting company | Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x
As of June 30, 2025, the last business day of the registrant’s second fiscal quarter of 2025, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $57,119,495 based on the closing price of $2.01 per share, as reported on NASDAQ on that date.
Number of shares of common shares outstanding, par value $0.001 per share as of February 19, 2026 was 43,538,189 .
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s proxy statement for the 2026 Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2025.
TABLE OF CONTENTS
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Certain Definitions
The following definitions apply throughout this annual report unless the context requires otherwise:
| “We”, “Us”, “Company”, “Smart Sand” or “Our” | Smart Sand, Inc., a company organized under the laws of Delaware, and its subsidiaries. | |||||||
| “shares”, “stock” | The common stock of Smart Sand, Inc., nominal value $0.001 per share. | |||||||
| “FCB ABL Credit Facility”, “FCB Credit Agreement”, “FCB Security Agreement” | The five-year senior secured asset-based credit facility entered into on September 3, 2024 (the “FCB ABL Credit Facility”) pursuant to: (i) a credit agreement among the Company, the subsidiary borrowers and guarantors party thereto, First-Citizens Bank & Trust Company, as issuing bank, swingline lender and agent, and certain other lenders from time to time party thereto (the “FCB Credit Agreement”); and (ii) a guarantee and collateral agreement among the Company, the subsidiary borrowers and guarantors party thereto and First-Citizens Bank & Trust Company, as agent (the “FCB Security Agreement”). | |||||||
| “VFI Equipment Financing” | The four-year Master Lease Agreement, dated May 9, 2024, between Varilease Finance, Inc. (“VFI”) and related lease schedule entered into on June 26, 2024 in connection therewith (collectively, the “VFI Equipment Financing”). The VFI Equipment Financing was structured as a sale-leaseback of specific SmartSystemsTM wellsite proppant storage equipment owned by the Company. The VFI Equipment Financing is considered a lease under article 2A of the Uniform Commercial Code but is considered a financing arrangement (and not a lease) for accounting and financial reporting purposes. | |||||||
| “Exchange Act” | The Securities Exchange Act of 1934, as amended. | |||||||
| “Securities Act” | The Securities Act of 1933, as amended. | |||||||
| “FASB”, “ASU”, “ASC”, “GAAP” | Financial Accounting Standards Board, Accounting Standards Update, Accounting Standards Codification, Accounting Principles Generally Accepted in the United States, respectively. | |||||||
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Disclaimer Regarding Forward-looking Statements and Risk Factor Summary
This Annual Report on Form 10-K contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact included in this Annual Report on Form 10-K are forward-looking statements. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate’’, “estimate’’, “expect”, “project”, “plan”, “intend”, “believe”, “may”, “will”, “should”, “can have”, “likely” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. For example, all statements we make relating to our estimated and projected costs, expenditures, cash flows, growth rates and financial results, our plans and objectives for future operations, growth or initiatives, strategies or the expected outcome or impact of pending or threatened litigation are forward-looking statements. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those expected, including without limitation:
•fluctuations in demand for frac sand;
•the cyclical nature of our customers’ businesses;
•operating risks that are beyond our control, such as changes in the price and availability of transportation, natural gas or electricity;
•production risks such as unusual or unexpected geological formations or pressures; pit wall failures or rock falls; or unanticipated ground, grade or water conditions at our mines;
•our dependence on our Oakdale mine and processing facility for a significant portion of our current sales;
•decreased usage of rail terminals that we operate;
•the level of activity in the oil and natural gas industries;
•the development of either effective alternative proppants or new processes which reduce or replace the need for frac sand in hydraulic fracturing;
•increased competition from new or existing sources of sand supply, including frac sand mines in areas located close to, or within, the oil and gas basins;
•federal, state and local legislative and regulatory initiatives relating to hydraulic fracturing and the potential for related regulatory action or litigation affecting our customers’ operations, including restrictions on oil and gas development and possible bans on hydraulic fracturing;
•potential negative litigation outcomes;
•changes in federal, state, local or international tax legislation;
•scarcity of supplies necessary to run our business;
•actions by major oil- and natural gas-producing countries, including OPEC members, Russia, Venezuela, Canada and the United States;
•our rights and ability to mine our properties and process sand and our renewal or receipt of the required permits and approvals from governmental authorities and other third parties;
•our ability to successfully compete in the sand or proppant delivery markets;
•loss of, or reduction in, business from our largest customers;
•increasing costs or a lack of dependability or availability of transportation services and transload network access or infrastructure, including the potential impact of train derailments;
•increases in the prices of, or interruptions in the supply of, natural gas, electricity, diesel fuel, or any other energy sources;
•loss of or diminished access to water;
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•our ability to successfully complete acquisitions or integrate acquired businesses;
•our ability to fully protect our intellectual property rights;
•our ability to make capital expenditures to maintain, develop and increase our asset base and our ability to obtain needed capital or financing on satisfactory terms;
•restrictions imposed by our indebtedness on our current and future operations;
•border restrictions;
•global pandemics;
•new or increased tariffs;
•contractual obligations that require us to deliver minimum amounts of frac sand or purchase minimum amounts of products or services;
•the accuracy of our estimates of mineral reserves and resource deposits;
•a shortage of skilled labor and rising costs in the frac sand mining and manufacturing industries;
•our ability to attract and retain key personnel;
•our ability to maintain satisfactory labor relations;
•our ability to maintain effective quality control systems at our mining, processing and production facilities and rail terminals;
•seasonal and severe weather conditions;
•the results of political and civil unrest;
•fluctuations in our sales and results of operations due to seasonality and other factors;
•interruptions or failures in our information technology systems, including cyber-attacks;
•the use and continued adoption of artificial intelligence (“AI”) technologies;
•the impact of international or domestic terrorism or an armed conflict, including the conflicts in Ukraine and the Middle East;
•extensive and evolving environmental, mining, health and safety, licensing, reclamation and other regulation (and changes in their enforcement or interpretation);
•silica-related health issues and corresponding litigation;
•our ability to acquire, maintain or renew financial assurances related to the reclamation and restoration of mining property; and
•other factors disclosed in Item I A. “Risk Factors” and elsewhere in this Annual Report on Form 10-K.
We derive many of our forward-looking statements from our operating budgets and forecasts, which are based on many assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the effect of known or unknown factors, and it is impossible for us to anticipate all factors that could affect our actual results. The risk factors summarized below could materially harm our business, operating results and/or financial condition, impair our future prospects and/or cause the price of our common stock to decline. These risks are discussed more fully under Item 1A, “Risk Factors” and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report on Form 10-K. Material risks that may affect our business, operating results and financial condition include, but are not necessarily limited to, the following:
•our business and financial performance depend on the level of activity in the oil and natural gas industry;
•a material portion of our revenues have been generated from sales with a limited number of customers;
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•we are exposed to the credit risk of our customers;
•our proppant sales are subject to fluctuations in market pricing;
•we face significant competition that may cause us to lose market share;
•we may be required to make substantial capital expenditures to maintain and grow our asset base and we may not realize enough of a return on such capital expenditures to cover their costs;
•the inability to obtain needed capital or financing on satisfactory terms, or at all;
•inaccuracies in estimates of volumes and qualities of our sand reserves could result in lower than expected sales and higher than expected cost of production;
•if we are unable to make acquisitions on economically acceptable terms, our future growth could be limited;
•restrictions in our FCB ABL Credit Facility may limit our ability to capitalize on potential acquisitions and other business opportunities;
•we face distribution and logistical challenges in our business;
•we may be adversely affected by decreased demand for frac sand due to the development of effective alternative proppants or new processes which reduce or replace frac sand in hydraulic fracturing;
•an increase in the supply of frac sand having similar characteristics as the frac sand we produce could make it more difficult for us to renew or replace our existing contracts on favorable terms, or at all;
•our long-term take-or-pay contracts may preclude us from taking advantage of increasing prices for frac sand or mitigating the effect of increased operational costs during the term of those contracts;
•our operations are subject to operational hazards and unforeseen interruptions for which we may not be adequately insured;
•our business relies significantly on railroads to deliver our products, and any delays in rail transportation could adversely impact our business;
•changes or consolidation within the rail industry could adversely affect our business by reducing competitive shipping options and potentially increasing transportation costs;
•increases in the price or a significant interruption in the supply of natural gas, electricity or any other energy sources, of which our production process consumes large amounts, could adversely impact our production costs;
•increases in the price of diesel fuel could adversely affect our transportation costs;
•a facility closure entails substantial costs, and if we close one of our facilities sooner than anticipated, our results of operations and cash flows may be adversely affected;
•our operations are dependent on our rights and ability to mine our properties and on our having renewed or received the required permits and approvals from governmental authorities and other third parties;
•a shortage of skilled labor together with rising labor costs in the excavation industry, which may further increase operating costs;
•our business may suffer if we lose, or are unable to attract and retain, key personnel;
•failure to maintain effective quality control systems at our mining, processing and production facilities may negatively affect our ability to conduct business;
•seasonal and severe weather conditions may reduce our ability to process and deliver our products;
•our cash flow fluctuates on a seasonal basis, which may limit our ability to operate;
•we do not own the land on which our transload facilities are located, which inherently limits our rights at those facilities;
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•a terrorist attack or armed conflict may affect our ability to conduct business;
•diminished access to water may affect our ability to process sand;
•we may be subject to interruptions or failures in our information technology systems, including cyber-attacks;
•if we are unable to fully protect our intellectual property rights, we may suffer a loss in our competitive advantage;
•we may be adversely affected by disputes regarding intellectual property rights of third parties;
•unsatisfactory safety performance may negatively affect our customer relationships and cause us to fail to retain existing customers or attract new customers;
•we may be subject to legal claims, such as personal injury and property damage;
•a financial downturn could negatively affect us;
•our future results will suffer if we do not effectively manage our expanded operations;
•federal, state and local legislative and regulatory initiatives or mandates relating to hydraulic fracturing, such as oil and gas leasing moratoriums, and the potential for related litigation could result in increased costs, additional operating restrictions or delays for our customers, which could cause a decline in the demand for our frac sand or restrict our ability to maximize profits;
•exposure to new or changing U.S. and foreign tariff policies, which could increase our costs, limit our ability to pass those costs on to customers, and create market volatility that affects demand, pricing, and global supply chain stability;
•we and our customers are subject to extensive regulations, including environmental and occupational health and safety regulations, that impose, and will continue to impose, significant costs and liabilities, and future regulations, or more stringent enforcement of existing regulations, could increase those costs and liabilities;
•we are subject to the Federal Mine Safety and Health Act of 1977, which imposes stringent health and safety standards on numerous aspects of our operations;
•our inability to acquire, maintain or renew financial assurances related to the reclamation and restoration of mining property may increase cash outlay or limit our ability to operate our processing facilities; and
•climate change legislation and regulatory initiatives could negatively affect our business.
All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements as well as other cautionary statements that are made from time to time in our other filings with the Securities and Exchange Commission (the “SEC”) and public communications. You should evaluate all forward-looking statements made in this Annual Report on Form 10-K in the context of these risks and uncertainties.
We caution users of the financial statements that the important factors referenced above may not contain all of the factors that may be important to every user. In addition, we cannot make assurances that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect. The forward-looking statements included in this Annual Report on Form 10-K are made only as of the date hereof. We undertake no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
Additionally, certain information we may disclose either here or elsewhere (such as our website) is informed by certain third-party frameworks or the expectations of various stakeholders and, as such, may not necessarily be material for purposes of our filings with the Securities and Exchange Commission.
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PART I
ITEM 1. — BUSINESS
The Company
We are a fully integrated frac and industrial sand supply and services company. We offer complete mine to wellsite proppant supply and logistics solutions to our frac sand customers. We produce low-cost, high quality Northern White sand, which is a premium sand used as a proppant to enhance hydrocarbon recovery rates in the hydraulic fracturing of oil and natural gas wells and for a variety of industrial applications. We also offer proppant logistics solutions to our customers through our in-basin transloading terminals and our SmartSystemsTM wellsite proppant storage capabilities. In recent years, we have expanded our product line to offer Industrial Products Solutions (“IPS”) in order to diversify our customer base and markets we serve by offering sand for industrial uses.
We market our products and services to oil and natural gas exploration and production companies, oilfield service companies and diversified industrial and commercial customers. We believe that, among other things, the size and favorable geologic characteristics of our sand reserves, the strategic location and logistical advantages of our facilities, our proprietary SmartDepotTM portable wellsite proppant storage silos, our proprietary SmartPath® wellsite proppant management system, SmartBeltTM conveyor system, access to all Class I rail lines, and the industry experience of our senior management team make us as a highly attractive provider of sand and logistics services.
Operating Segments
Sand Segment
We sell our sand through short-term and long-term contracts or spot sales in the open market. We incorporated in Delaware in July 2011 and began operations at our Oakdale, Wisconsin facility in July 2012 with 1.1 million tons of annual processing capacity. After several expansions our current annual processing capacity at our Oakdale facility is approximately 5.5 million tons. This facility has access to both the Canadian Pacific Class I rail network (through an onsite, unit train capable rail facility) and the Union Pacific Class I rail network (through the nearby Byron, Wisconsin transload facility).
In September 2020, we acquired our Ottawa, Illinois mine and processing facility, which has annual processing capacity of approximately 1.6 million tons and access to the Burlington Northern Santa Fe Class I rail line through the nearby Peru, Illinois transload facility, as well as rights to use a rail terminal located in El Reno, Oklahoma. We began operating the Ottawa facility in October 2020.
In March 2022, we acquired our Blair, Wisconsin mine and processing facility, which has approximately 2.9 million tons of total annual processing capacity and contains an onsite, unit train capable rail terminal with access to the Class 1 Canadian National Railway. We commenced operations at the Blair facility in the second quarter of 2023.
We sell frac sand through a network of in-basin rail terminals. We directly control five in-basin transloading facilities and have access to third party transloading terminals in all operating basins. We operate a unit train capable transloading terminal in Van Hook, North Dakota, which became operational in April 2018, to service the Bakken Formation in the Williston Basin. In September 2020, as part of our acquisition of the Ottawa, Illinois mining facility, we obtained rights to use a rail terminal located in El Reno, Oklahoma. In January 2022, we began operations at a unit train capable transloading terminal in Waynesburg, Pennsylvania to service the Appalachian Basin, including the Marcellus and Utica Formations. We completed an expansion of this terminal in the fourth quarter of 2023. In December 2023, we acquired the rights to operate a unit train capable transloading terminal in Minerva, Ohio, which became operational in the second quarter of 2024. In January 2024, we acquired the rights to operate a unit train capable transloading terminal in Dennison, Ohio, which became operational in the third quarter of 2024. We completed an expansion of this terminal in the third quarter of 2025.
In late 2021, we started our IPS business to provide sand to customers for various industrial applications, such as glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail, and recreation. We believe this business provides us with the ability to diversify some of our sales into more stable, consumer-driven products to help mitigate some of the price volatility we are exposed to in the oil and gas markets that we serve. We completed an expansion of our IPS processing equipment at our Ottawa, Illinois plant in the fourth quarter of 2023 to provide blending and cooling capabilities to increase our product offerings in the industrial marketplace.
SmartSystems Segment
We provide wellsite proppant handling solutions services and equipment under flexible contract terms custom tailored to meet the needs of our customers. We offer our customers portable wellsite storage and management solutions through our
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SmartSystems products and services. Our SmartSystems enable customers to unload, store, and deliver proppant at the wellsite and rapidly set up, take down, and transport the entire system. This capability enhances our customers’ efficiency, safety, and reliability. Through our SmartSystems wellsite proppant storage solutions, we offer the SmartDepot® and SmartDepotXL™ silo systems, the SmartBelt™ conveyor, the SmartPath® wellsite proppant management system, and our rapid deployment trailers. The SmartDepot silos feature passive and active dust suppression technology and support gravity-fed operation. Our self-contained SmartPath wellsite proppant management system is a mobile sand transloading solution that works with bottom-dump trailers. These systems include a drive-over conveyor, surge bin, silo storage, bucket elevators, and integrated dust collection.
We have recently developed new dual bucket elevators to enhance our vertical material handling capabilities. We also increased our silo storage capacity and streamlined proppant delivery directly to the blender. This addition provides greater flexibility for customers with varying wellsite configurations while maintaining the efficiency, safety, and reliability that define our SmartSystems solutions. Our rapid deployment trailers are designed for quick setup, takedown, and transportation of the entire SmartSystem. They detach from the wellsite equipment, allowing for removal from the wellsite during operations. We believe our SmartSystems help customers reduce trucking and related fuel consumption, reducing the carbon footprint of their daily operations.
Market
Supply and demand fundamentals have been stable during the last three years and frac sand prices have recovered from previous historic lows. There have been modest pricing fluctuations over the periods presented, but we believe the fluctuation is consistent with other commodities in the oilfield services sector.
Events such as the ongoing conflicts in Ukraine and the Middle East, rapidly changing trade policies between the United States and other countries, and recent output changes by the Organization of the Petroleum Exporting Countries may affect oil and natural gas prices and create volatility in the oilfield service sector and could impact the drilling and completion of new oil and natural gas wells. Recent U.S. actions targeting Venezuelan oil exports — including expanded sanctions, restrictions on tanker movements, and evolving diplomatic and regulatory measures — have added uncertainty to global crude supply, pricing and market dynamics, which may indirectly affect demand for frac sand and related services. Since demand for frac sand is tied to new well completion activity which is impacted by current oil and natural gas prices, we cannot predict if frac sand prices will increase, decrease or stabilize.
The uncertainty of tariffs could also have an impact on frac sand demand. Our sales into Mexico and Canada are currently exempt from tariffs. Although our sales into Canada were subject to tariffs earlier this year, a recent Surtax Remission Order eliminated such tariffs on our sand. Should the tariff rates change, we anticipate that our customers would be responsible for the increased cost, which may result in customers reducing their activity due to higher sand prices or sourcing their sand needs from other suppliers within their own countries. We are currently unable to estimate the effect of current or future events on our future financial position and results of operations. Therefore, we give no assurances that these events will not have a material adverse effect on our financial position or results of operations.
We believe the demand for frac sand will continue to moderately increase, driven by increased lateral well lengths and increased volume of sand per linear foot of lateral well. In addition, demand may increase over the next five years as growth in liquified natural gas (“LNG”) export capacity and rising power generation requirements, particularly from artificial intelligence data centers, drive increased drilling and completion activity in natural gas basins.
Northern White frac sand, which is found predominantly in Wisconsin and limited portions of Minnesota, Illinois, and Missouri, is considered a premium proppant due to its favorable physical characteristics. We believe that regional sand will continue to affect the demand for Northern White sand in some of the oil and natural gas producing basins in which we market our products. However, we believe there will continue to be demand for our high-quality Northern White frac sand. In particular, we currently believe that Northern White frac sand has logistical advantages in the Marcellus, Utica and Bakken Formations in the shale basins of the United States, and the Montney and Duvernay shale basins in Canada. We expect demand for our frac sand to continue to be supported by customers who are focused on long-term well performance and ultimate recovery of reserves from the oil and natural gas wells they are completing, as well as those interested in the efficiency of their logistics supply chain and delivery of sand to the wellsite. Additionally, we believe market trends continue to support increased proppant usage per well drilled due to operator focus on well efficiencies through increasing lengths of drilling laterals, use of simul-fracking techniques and other well enhancement strategies. Finally, we believe that the adoption of our SmartSystems provides improved efficiencies in shipping and storing sand at the wellsite through reduced trucking requirements, which removes traffic from the roads and lowers diesel fuel consumption, thereby providing incremental value to our customers by reducing their carbon emissions.
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Demand in the IPS business is stable as customers are spread over a wide range of industries, including glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail, recreation and more. The IPS business is primarily influenced by macroeconomic drivers such as consumer demand and population growth. We believe that as this business grows, it will provide us with the ability to diversify a portion of our sales into more stable, consumer-driven products to help mitigate the price volatility in the oil and gas industry.
Business Strategies
Our principal business objective is to be the premier provider of sustainable Northern White Sand supply and logistics solutions to our customers. We do this through supporting our existing customers, expanding our market share, being a low-cost producer of high-quality Northern White Sand, maintaining low debt leverage and managing efficient and sustainable supply chain logistics from the mine to the wellsite. In late 2021, we expanded our product line to offer IPS. We believe that by executing these business strategies, we will be able to increase long-term stockholder value. We expect to achieve this objective through the following business strategies:
•Diversifying our customer base to include Industrial Product Solutions. In late 2021, we expanded our product offering to provide IPS for industrial customers. IPS is currently approximately 5% of our business. We expect to continue to expand and diversify to serve the vital industrial markets throughout North America, including glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail, recreation and more.
•Expanding and optimizing our existing logistics infrastructure and developing additional origination and destination points. We expect to continue to capitalize on our Oakdale facility’s ability to ship on two Class I rail carriers to maximize our product shipments, increase our railcar utilization and lower our transportation costs. We have the ability to simultaneously accommodate multiple unit trains on-site with the Canadian Pacific rail network while also having the ability to ship our frac sand to our customers on a second Class I rail carrier through our transloading facility located on the Union Pacific rail network approximately three miles from our Oakdale operations. This access to two Class I rail carriers from Oakdale provides increased delivery options from our Oakdale site for our customers, greater competition between our rail carriers and potentially lower freight costs.
Our mine at Ottawa, Illinois and related transloading terminal in Peru, Illinois provide additional origination and destination points through access to a third Class I rail carrier, the BNSF.
Our Blair, Wisconsin mine, with onsite rail infrastructure, provides us with direct access to the Class 1 Canadian National Railway. With this access, we currently have access to all Class 1 rail lines within the United States and Canada. The Blair facility began operations in the second quarter of 2023.
We also operate several terminals throughout the United States, including a multiple unit train capable transloading terminal in Van Hook, North Dakota, which we believe allows us to be one of the most efficient and low-cost sources of Northern White frac sand in the Bakken Formation in the Williston Basin. Our Waynesburg, Pennsylvania terminal, which services the Appalachian Basin, including the Marcellus and Utica Formations, became operational in January 2022 and was expanded in the fourth quarter of 2023. We believe this terminal allows us to be one of the most efficient and low-cost sources of Northern White frac sand in the Appalachian Basin. Additionally, we obtained access, through a long term lease, to rail terminals in Minerva, Ohio and Dennison, Ohio, which we believe will broaden our ability to offer sand to our customers in the Utica Formation in an efficient and cost-effective manner. Both of the Ohio terminals became operational in 2024. In September 2025, we completed an expansion of the Dennison, Ohio terminal. Our El Reno, Oklahoma terminal provides us with the flexibility to send sand to the Woodford and SCOOP/STACK Basins as it is needed by our customers.
Additionally, our SmartSystems wellsite storage and proppant management systems allow us to offer expanded logistics services to our customers. We believe that our SmartSystems reduce trucking and related fuel consumption for our customers, helping them to reduce their carbon footprint in their daily operations.
The benefits of our long-term growth strategy for in-basin delivery of sand include expanding our customer base by marketing through our own terminals, more opportunity for spot sales by forward deploying sand and the opportunity to capture incremental margin on the sale of sand farther down the supply chain by managing the cost of rail, terminal and wellsite storage operations. Additionally, having a presence in-basin gives us an opportunity to have a base of operations from which to market and support our SmartSystems wellsite storage and proppant management solutions. Through the addition of new origination and destination options, we continue evaluating ways to reduce the landed cost of our products in-basin and to the wellsite for our customers while increasing our customized service offerings to provide our customers with additional delivery and pricing alternatives.
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•Focusing on organic growth by increasing the utilization of our mine and frac sand processing facilities. We intend to continue pursuing opportunities to maximize the value and the utilization of our Oakdale, Ottawa, and Blair facilities through the addition of new customers and increased sales volumes. Despite the emergence of regional sand in oil and natural gas producing basins, we believe the proppant market continues to offer attractive long-term growth fundamentals for Northern White frac sand in the key operating basins we currently serve due to the logistics advantages in these basins and its superior well results compared to regional sand alternatives. We believe that coupling our premium proppant with long-term sustainable logistics supply services may mitigate the potential cost savings of using regional sand.
Demand for frac sand declined moderately during 2025. According to Spears and Associates, Inc. (“Spears”), North America proppant demand decreased by approximately 2% compared to 2024. Despite lower drilling and completion activity during the year, overall frac sand demand remained relatively stable, supported by longer lateral well lengths and increased sand volume per linear foot of lateral well. Frac sand demand is expected to increase moderately in 2026. In addition, demand may continue to grow over the next five years, driven by expected increases in natural gas demand to support expanded LNG export capacity and potential incremental power demand from data centers.
•Focusing on being a low-cost provider and continuing to make process improvements. We continue to focus on being a low-cost provider, which we believe will allow us to compete effectively for sales of frac and industrial sand and to achieve attractive operating margins. Our low-cost structure results from a number of key attributes, including, among others, (i) our relatively low royalty rates, (ii) our majority of fine mineral reserve deposits, (iii) our access to all Class I rail lines within the United States and Canada, and (iv) our low levels of debt. We have strategically designed our operations to provide for low-cost production, including having dryers and wet plants enclosed in our Oakdale and Ottawa processing facilities that allow for year-round operation at both facilities. This allows us to more efficiently match our wet sand production with our drying capacity and to better utilize our workforce with a goal to reduce the overall cost of production. We continue to invest in capital projects and consider strategic acquisitions that increase efficiencies and offer the opportunity for a high return on investment. In addition, we seek to maximize our mining yields on an ongoing basis by targeting sales volumes that more closely match our reserve gradation in order to minimize waste in our processing. We also continue to evaluate other mining techniques to reduce the overall cost of our mining operations.
•Creating flexible sales activities. We believe that demand for our products will remain strong in basins where regional sand is not an attractive alternative due to the logistics and performance advantages of Northern White Sand, such as the Bakken in North Dakota, the Marcellus and Utica formations in the Appalachian Basin of the Northeast region of the United States, and the Montney and Duvernay shale basins in Canada. We continue to have discussions with operators in these regions regarding new relationships and growth opportunities. We also believe that the long-term benefits of high quality Northern White sand outweighs the short-term cost savings provided by regional sand in the Permian, Eagle Ford and SCOOP/STACK basins. We believe there are additional opportunities for customers in the Permian and other basins, which have regional supply, who are focused on the long-term performance of their production and on the long-term efficiency of their logistics.
While we continue to look for long-term contract opportunities, we intend to continue to focus on shorter term contracts and increase sales in the spot market given the reluctance of many customers to enter into long-term take-or-pay contracts in the current market environment. Having a greater portion of our activity on spot or short-term contracts allows us the opportunity to take advantage of pricing improvements quickly should market fundamentals improve.
Competitive Strengths
We believe that we will be able to successfully execute our business strategies because of the following competitive strengths:
•Long-lived, strategically located, high-quality reserve base. We believe our three active sand mines in Oakdale, Wisconsin, Ottawa, Illinois and Blair, Wisconsin have a uniquely desirable combination of large high-quality reserves of fine mesh sand that is contiguous to their production and primary rail loading facilities that are either on site or are in close proximity to the mines.
As of December 31, 2025, we have an estimated life of mine of approximately 71 years at Oakdale, 149 years at Ottawa, and 67 years at Blair, based on our current expected sales volumes. We have the ability to annually process up to approximately 10.0 million tons of sand and we believe our reserve base positions us well to take advantage of current market trends of increasing demand for finer mesh frac sand. We also believe that having our mines,
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processing facilities and primary rail loading facilities in close proximity provides us with an overall low-cost structure, which enables us to compete effectively for sales of Northern White frac sand and to achieve attractive operating margins.
•Intrinsic logistics advantage. We believe that we are one of the few frac sand producers with a network of facilities custom-designed for the specific purpose of delivering frac sand to all of the major U.S. oil and natural gas producing basins by having rail facilities that can simultaneously accommodate multiple unit trains on site or in close proximity to our mining and processing operations. Our transportation assets at Oakdale have access to two Class I rail lines, the Canadian Pacific and Union Pacific. We believe our customized on-site logistical configuration yields lower operating and transportation costs of product to our customers between the mine and in basin destinations.
Our Ottawa mine and nearby Peru transloading terminal in Illinois provides us with access to another Class I rail line, the Burlington Northern Santa Fe railroad. Additionally, we believe the location of our Ottawa, Illinois facility in close proximity to Greater Chicago and other major Midwestern metropolitan markets, and our ability to truck or rail our products from this location, allows us to be able to offer competitive pricing for industrial sand applications.
The addition of the Blair frac sand mine and related processing facility located in Blair, Wisconsin, which contains an onsite, unit train capable rail terminal with access to the Class 1 Canadian National Railway, has secured our access to provide sand on all Class I rail lines in the United States and Canada.
•Expanded logistics solutions. Our transloading terminal in Van Hook, North Dakota is capable of handling multiple unit trains simultaneously, and we have been providing in-basin sand at this terminal to our customers since operations began in 2018. This terminal has allowed us to expand our customer base and to offer more efficient delivery options to customers operating in the Bakken Formation in the Williston Basin.
In January 2022, we began operating a terminal in Waynesburg, Pennsylvania to service the Appalachian Basin, including the Marcellus and Utica Formations.
We have also obtained access, through long term leases, to rail terminals in Minerva, Ohio and Dennison, Ohio. These terminals became operational in 2024. In September 2025, we completed an expansion of the Dennison, Ohio terminal.We believe the Waynesburg, Minerva and Dennison terminals allow us to be one of the most efficient and low-cost sources of frac sand in the Appalachian Basin.
We also operate a terminal located in El Reno, Oklahoma, which we acquired in 2020, to serve the Woodford and SCOOP/STACK Basins.
We are capable of delivering sand to substantially all onshore operating basins in the United States and Canada. We have direct access to four Class I rail lines in North America and indirect access to all Class I rail lines, which gives us an advantage over many of our competitors by allowing us to offer more competitive pricing and delivery options to our customers.
Our Smart Systems enable customers to unload, store, and deliver proppant at the wellsite and rapidly set up, take down, and transport the entire system. This capability enhances our customers’ efficiency, safety, and reliability. Through our SmartSystems wellsite proppant storage solutions, we offer the SmartDepot and SmartDepotXL silo systems, the SmartBelt conveyor, the SmartPath wellsite proppant management system, and our rapid deployment trailers. The SmartDepot silos feature passive and active dust suppression technology and support gravity-fed operation. Our self-contained SmartPath wellsite proppant management system is a mobile sand transloading solution that works with bottom-dump trailers. These systems include a drive-over conveyor, surge bin, silo storage, bucket elevators, and integrate dust collection. In 2024, we developed new dual bucket elevators to enhance our vertical material handling capabilities. We also increased our silo storage capacity and streamlined proppant delivery directly to the blender. This addition provides greater flexibility for customers with varying wellsite configurations while maintaining the efficiency, safety, and reliability that define our SmartSystems solutions. Our rapid deployment trailers are designed for quick setup, takedown, and transportation of the entire SmartSystem. They detach from the wellsite equipment, allowing for removal from the wellsite during operations. We believe our SmartSystems help customers reduce trucking and related fuel consumption, reducing the carbon footprint of their daily operations.
•Long-term liquidity and financial flexibility. We believe we have sufficient liquidity to support our operations and pursue our growth initiatives. In September 2024, the Company entered into a $30.0 million five-year senior secured asset-based credit facility with First-Citizens Bank & Trust Company. The FCB ABL Credit Facility provides for non-amortizing revolving loans in an aggregate principal amount of up to $30.0 million, subject to a borrowing base
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comprised of eligible inventory and accounts receivable. As of December 31, 2025, we had cash on hand of $22.6 million and undrawn availability under the FCB ABL Credit Facility of $30.0 million and no outstanding borrowings. The FCB ABL Credit Facility matures in September 2029. Our total available liquidity among cash and available borrowings was $52.6 million as of December 31, 2025.
•Experienced management team. The members of our senior management team bring significant experience to the market environment in which we operate. Their expertise covers a range of disciplines, including industry-specific operating and technical knowledge and experience managing businesses in a variety of operating conditions.
•Focus on safety and environmental stewardship. We aim to maintain a culture that prioritizes safety, the environment and our relationship with the communities in which we operate, actions we believe are critical to the success of our business. We are a Tier 1 participant in The Wisconsin Department of Natural Resources’ Green Tier program, which encourages, recognizes and rewards companies for voluntarily exceeding environmental, health and safety standards. Since 2016, Smart Sand has maintained International Organization for Standardization (“ISO”) ISO 9001 and ISO 14001 registrations for our quality management system and environmental management system programs, respectively, for our Oakdale facility. We earned initial ISO 9001 registration for our Ottawa, Illinois facility in 2022 and for our Blair, WI facility in 2024. We also have attained Green Professional status in Wisconsin’s Green Master sustainability recognition program. We are also members of the Wisconsin Industrial Sand Association, which promotes safe and environmentally responsible sand mining standards.
Our Customers
Our core customers are oil and natural gas exploration and production companies and oilfield service companies. In late 2021, we began diversifying our sand sales to include IPS. IPS customers represent a small but growing portion of our overall sand sales and we intend to continue increasing our expansion of IPS in 2026 and beyond. We sell frac sand under short- and long-term take-or-pay contracts as well as in the spot market, and provide proppant logistics solutions through our in-basin transloading terminals and SmartSystems wellsite proppant storage solutions and other logistics services.
Generally, customers under take-or-pay contracts are required to take minimum volumes of sand or make shortfall payments for a specified period of time. We recognize revenue in our results of operations in the period in which the obligation becomes due.
Currently many customers prefer to source their frac sand supply in the spot market or under short-term contractual arrangements at market prices. Should our customer base continue to limit their exposure to longer term contracts, we will continue to focus on shorter term contracts and increasing sales in the spot market.
Customers renting SmartSystems are able to tailor the contract, including adjusting the number of SmartDepot silos, SmartPath wellsite proppant management systems and SmartBelt conveyors to be supplied, to meet their short-term and long-term needs. We recognize rental revenue when the equipment is made available for the customer to use or other obligations in the contract are met.
For the year ended December 31, 2025, EQT Corporation and EOG Resources, Inc. accounted for 27.7% and 10.9%, respectively, of total revenue, and the remainder of our revenues were from 99 customers. For the year ended December 31, 2024, EQT Corporation, Encino Energy, and Liberty Oilfield Services accounted for 31.9%, 13.8% and 10.2%, respectively, of our total revenues, and the remainder of our revenues were from 82 customers. For the year ended December 31, 2023, EQT Corporation and Liberty Oilfield Services accounted for 30.2% and 11.4%, respectively, of our total revenues, and the remainder of our revenues were from 72 customers. Please read “Risk Factors—Risks Inherent in Our Business—A substantial majority of our revenues have been generated under contracts with a limited number of customers, and the loss of, material nonpayment or nonperformance by or significant reduction in purchases by any of them could adversely affect our business, results of operations and financial condition.”
Capital Plans
We expect 2026 capital expenditures to be between $15.0 million and $20.0 million, consisting primarily of capital for efficiency projects at our mine and processing facilities and our in-basin terminals, along with investments in our facilities to support incremental IPS activity. We expect to fund these capital expenditures with existing cash, cash generated from operations, or borrowings under the FCB ABL Credit Facility or other financing sources, such as equipment finance providers.
Industry Trends Impacting Our Business
Unless otherwise indicated, the information set forth under this section, including all statistical data and related forecasts, is derived from Spears’ “North American Proppant Market” published in the first quarter of 2026. While we are not aware of
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any misstatements regarding the proppant industry data presented herein, estimates involve risks and uncertainties and are subject to change based on various factors, including those discussed under the heading “Risk Factors.”
Demand Trends
Demand for frac sand declined moderately during 2025. According to Spears, North America proppant demand decreased by approximately 2% compared to 2024. Despite lower drilling and completion activity during the year, overall frac sand demand remained relatively stable, supported by longer lateral well lengths and increased sand volume per linear foot of lateral well. Frac sand demand is expected to increase moderately in 2026. In addition, demand may continue to grow over the next five years, driven by expected increases in natural gas demand to support expanded LNG export capacity and potential incremental power demand from data centers.
Supply Trends
There was considerable consolidation activity including mergers, acquisitions, closures of mines and bankruptcy filings among our peers from 2020 to 2025. Supply and demand for Northern white frac sand was relatively in balance from 2023 to 2025.
Supplies of high-quality Northern White frac sand are limited to select areas, predominantly in western Wisconsin and limited areas of Minnesota, Illinois and Missouri. We believe the ability to obtain large contiguous reserves in these areas is a key constraint for potential new Northern White frac sand supply and can be an important supply consideration when assessing the economic viability of a potential frac sand processing facility. Further constraining the supply and throughput of Northern White frac sand is that not all of the large reserve mines have on-site excavation, processing or logistics capabilities, which impact the long-term competitiveness of these mines due to lower efficiency and higher cost structures. Historically, much of the capital investment in Northern White frac sand mines was used for the development of coarser deposits in western Wisconsin, which is inconsistent with the increasing demand for finer mesh frac sand in recent years. As such, we’ve seen competitors in the Northern White frac sand market reduce their capacity by shuttering or idling operations as the shift to finer sands in hydraulic fracturing of oil and natural gas wells and to lower cost regional sand sources has eroded the ongoing economic viability of mines with coarser reserve deposits and inefficient mining and logistics facilities.
Permits
We operate in a regulated environment overseen by governmental regulatory and enforcement bodies at the local, state and federal levels. To conduct our operations, we are required to obtain permits and approvals that address environmental, land use and health and safety issues at our operating facilities. Our current and planned areas for excavation at our mining facilities are permitted for extraction of our proven reserves. Portions of our facilities lie in areas designated as wetlands, which will require additional local, state and federal permits prior to mining those areas.
We voluntarily meet the standards of the Wisconsin Department of Natural Resources’ Green Tier program. As of 2025, all three of Smart Sand’s active mines hold valid ISO 9001-2015 Quality Management System and ISO 14001-2015 Environmental Management System registrations. These voluntary requirements are tracked and managed along with our permits.
The cost of securing permits has not had a material adverse effect on our results of operations or financial condition. We cannot ensure that existing environmental, health and safety (“EHS”) laws and regulations will not be reinterpreted or revised or that new EHS laws and regulations will not be adopted or become applicable to us. Revised or additional EHS requirements that result in increased compliance costs or additional operating restrictions could have a material adverse effect on our business.
Competition
The proppant industry is highly competitive. Please read “Risk Factors—Risks Inherent in Our Business—We face significant competition that may cause us to lose market share.” There are numerous large and small producers in all sand producing regions of North America with whom we compete, many of which also offer solutions for unloading, storing and delivering proppant to the wellsite. Our main competitors include Badger Mining Corporation, Iron Oak Energy Solutions, LLC, U.S. Silica Holdings, Inc., Capital Sand Company, Source Energy Services and Solaris Energy Infrastructure, Inc.
Although some of our competitors may have greater financial or natural resources than we do, we believe that we are well-positioned competitively due to our low cost of sand production, low debt levels, logistics infrastructure, high-quality, balanced reserve profile, service capabilities, transportation capabilities, and patented SmartSystems wellsite proppant storage solutions, which offer numerous benefits over our competition. Demand for frac sand and logistics solutions and the prices that we will be able to obtain for our products, to the extent not subject to a fixed price or take-or-pay contract, are closely linked to
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proppant consumption patterns for the completion of oil and natural gas wells in North America. These consumption patterns are influenced by numerous factors, including, among other things, the price for oil and natural gas, hydraulic fracturing activity, including the number of stages completed per well, the lateral length of horizontal wells being completed, and the amount of proppant used per stage. Further, these consumption patterns are also influenced by the location, quality, price and availability of frac sand and other types of proppants, such as resin-coated sand and ceramic proppant.
Seasonality
Our business is affected to some extent by seasonal fluctuations in weather that impact the production levels for a portion of our wet sand processing capacity. While our dry plants are able to process finished product volumes evenly throughout the year, our excavation and our wet sand processing activities at some of our mines have historically been limited to primarily non-winter months. As a consequence, we have experienced lower cash operating costs in the first and fourth quarter of each calendar year, and higher cash operating costs in the second and third quarter of each calendar year when we overproduced wet sand to meet demand in the winter months. These higher cash operating costs are capitalized into inventory and expensed when these tons are sold, which can lead to us having higher overall costs in the first and fourth quarters of each calendar year as we expense inventory costs that were previously capitalized. However, we have enclosed, indoor wet plants at our Oakdale and Ottawa processing facilities, which allow us to produce wet sand inventory year-round to support a large portion of our dry sand processing capacity, which may reduce certain effects of this seasonality. We may also sell frac sand for use in oil and natural gas producing basins where severe weather conditions may curtail drilling activities and, as a result, our sales volumes to those areas may be reduced during such severe weather periods. Severe weather can also impact the rail lines which we utilize to ship our sand to our customers in the operating basins and as a result could lead to reduced sales volumes during such severe weather periods. Additionally, over the last several years, exploration and production companies have become more disciplined in their spending patterns relative to their budgets, which has led to some of our customers completing their budgeted spending earlier in the year. This spending discipline could potentially lead to a slowdown in activity by our customers and lower sand demand in the fourth quarter of the year. For a discussion of the impact of weather on our operations, please read “Risk Factors—Seasonal and severe weather conditions could have a material adverse impact on our business, results of operations and financial condition” and “Risk Factors—Our cash flow fluctuates on a seasonal basis.”
Intellectual Property
Our intellectual property primarily consists of trade secrets, know-how and trademarks. We own patents and have patent applications pending related to our SmartSystems wellsite proppant storage solutions. All of the issued patents have an expiration date after August 2030. With respect to our other products, we principally rely on trade secrets, rather than patents, to protect our proprietary processes, methods, documentation and other technologies, as well as certain other business information. For a discussion of the impact of our intellectual property, please read “Risk Factors–If we are unable to fully protect our intellectual property rights, we may suffer a loss in our competitive advantage” and “Risk Factors–We may be adversely affected by disputes regarding intellectual property rights of third parties.”
Insurance
We believe that our insurance coverage is customary for the industry in which we operate and adequate for our business. As is customary in the proppant industry, we review our safety equipment and procedures and carry insurance against most, but not all, risks of our business. Losses and liabilities not covered by insurance would increase our costs. To address the hazards inherent in our business, we maintain insurance coverage that includes physical damage coverage, third-party general liability insurance, employer’s liability, business interruption, environmental and pollution and other coverage, although coverage for environmental and pollution-related losses is subject to significant limitations. For additional discussion regarding our insurance, please read “Risk Factors–Our operations are subject to operational hazards and unforeseen interruptions for which we may not be adequately insured.”
Environmental and Occupational Health and Safety Regulations
We are subject to stringent and complex federal, state, local and international laws and regulations governing the discharge of materials into the environment or otherwise relating to protection of worker health, safety and the environment. Compliance with these laws and regulations may expose us to significant costs and liabilities and cause us to incur significant capital expenditures in our operations. Any failure to comply with these laws and regulations may result in the assessment of administrative, civil and criminal penalties, imposition of remedial obligations, and the issuance of injunctions delaying or prohibiting operations. Private parties may also have the right to pursue legal actions to enforce compliance as well as to seek damages for non-compliance with environmental laws and regulations or for personal injury or property damage. In addition, the trend in environmental regulation is to place more restrictions on activities that may affect the environment, and thus, any changes in, or more stringent enforcement of, these laws and regulations that result in more stringent and costly pollution
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control equipment, the occurrence of delays in the permitting or performance of projects, or waste handling, storage, transport, disposal or remediation requirements could have a material adverse effect on our operations and financial position.
Future events, such as changes in existing laws or enforcement policies, the promulgation of new laws or regulations or the development or discovery of new facts or conditions adverse to our operations could cause us to incur significant costs. For example, policy shifts could impact our operations. President Trump has issued a series of executive orders and memoranda signaling a shift in environmental and energy policy in the United States, including the revocation of approximately 80 Biden-era executive orders related to public health, the environment, climate change and climate-related financial risks. President Trump also declared a “national energy emergency,” directing agencies to expedite conventional energy projects. While the extent of the Trump Administration’s changes to the environmental regulatory landscape in the United States is unknown at this time, it is possible that additional changes in the future could impact our results of operation and those of our customers. The following is a discussion of environmental and worker health and safety laws, as amended from time to time that relate to our operations or those of our customers that could have a material adverse effect on our business.
Air Emissions
Our operations are subject to the federal Clean Air Act (“CAA”) and related state and local laws, which restrict the emission of air pollutants and impose permitting, monitoring and reporting requirements on various sources. Over the next several years, we may be required to incur certain capital expenditures for air pollution control equipment or to address other air emissions-related issues. Changing and increasingly stringent requirements, future non-compliance, or failure to maintain necessary permits or other authorizations could require us to incur substantial costs or suspend or terminate our operations.
Climate Change
In recent years, the U.S. Congress has considered legislation to reduce emissions of greenhouse gases (“GHG”). We are unable to predict actions that may be taken by the Federal government; however, a number of states are addressing GHG emissions, primarily through the development of emission inventories or regional GHG cap and trade programs. Depending on the particular program, we could be required to monitor, report, or control GHG emissions or to purchase and surrender allowances for GHG emissions resulting from our operations. Independent of Congress, the U.S. Environmental Protection Agency (“EPA”) has adopted regulations controlling GHG emissions under its existing authority predicated on a finding that GHG emissions are harmful to human health. In February 2026, the current administration announced that it will repeal the so-called endangerment finding. Various organizations have indicated an intention to challenge this decision. The ultimate outcome of such action is uncertain, including the extent to which it may result in more stringent responses by other policymakers; however, compliance with new legislation or regulations may require us to incur substantial costs or suspend or terminate our operations. In addition, various policymakers, including the states of California, Illinois, and New York, have adopted or are considering adopting requirements for in-scope companies to disclose certain climate-related information, including on GHG emissions and climate risks. The SEC also previously finalized rules to mandate extensive disclosure of climate-related data, risks, and GHG emissions for certain public companies. However, these rules are stayed pending litigation before the Eighth Circuit.
Additionally, President Trump has directed the U.S. to withdraw from various international agreements, including the Paris Agreement (which withdrawal became effective in January 2026) and the underlying United Nations Framework Convention on Climate Change (“UNFCCC”). It is possible that other climate-related reporting regulations applicable to many U.S. companies will continue to take effect.
Water Discharges
The Clean Water Act (“CWA”) and analogous state laws impose restrictions and strict controls with respect to the discharge of pollutants, including spills and leaks of oil and other substances, into state waters or waters of the United States. The discharge of pollutants into regulated waters is prohibited, except in accordance with the terms of a permit issued by the EPA or an analogous state agency. The CWA and regulations implemented thereunder also prohibit the discharge of dredge and fill material into regulated waters, including jurisdictional wetlands, unless authorized by the Army Corps of Engineers (“Corps”) pursuant to an appropriately issued permit. In addition, the CWA and analogous state laws require individual permits or coverage under general permits for discharges of storm water runoff from certain types of facilities. Compliance with new rules and legislation could require us to face increased costs and delays with respect to obtaining permits for expansion activities. Federal and state regulatory agencies can impose administrative, civil and criminal penalties as well as other enforcement mechanisms for non-compliance with discharge permits or other requirements of the CWA and analogous state laws and regulations.
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Hydraulic Fracturing
We supply frac sand to exploration and production companies and oil field service companies that utilize hydraulic fracturing to complete new oil and natural gas wells. Hydraulic fracturing is an industry practice that is used to stimulate production of oil and natural gas from low permeability hydrocarbon bearing subsurface rock formations. The hydraulic fracturing process involves the injection of water, proppants, and chemicals under pressure into the formation to fracture the surrounding rock, increase permeability and stimulate production. Although we do not directly engage in hydraulic fracturing activities, our customers purchase our frac sand for use in their hydraulic fracturing activities.
From time to time, policymakers have adopted regulations restricting or otherwise regulating hydraulic fracturing operations, including the disposal of produced water from the hydraulic fracturing process. The adoption of new laws or regulations at the federal or state levels imposing reporting obligations on, or otherwise limiting or delaying, the hydraulic fracturing process could make it more difficult to complete natural gas wells, increase our customers’ costs of compliance and doing business, and adversely affect the hydraulic fracturing services they perform, which could negatively impact demand for our frac sand.
Non-Hazardous and Hazardous Wastes
The Resource Conservation and Recovery Act (“RCRA”) and comparable state laws control the management and disposal of hazardous and non-hazardous waste. These laws and regulations govern the generation, storage, treatment, transfer and disposal of wastes that we generate. In the course of our operations, we generate waste that is regulated as non-hazardous waste and hazardous waste, obligating us to comply with applicable standards relating to the management and disposal of such waste. In addition, drilling fluids, produced waters, and most of the other wastes associated with the exploration, development, and production of oil or natural gas, if properly handled, are currently exempt from regulation as hazardous waste under RCRA and, instead, are regulated under RCRA’s less stringent non-hazardous waste provisions, state laws or other federal laws. However, it is possible that certain oil and natural gas drilling and production wastes now classified as non-hazardous could be classified as hazardous waste in the future. A loss of the RCRA exclusion for drilling fluids, produced waters and related waste could result in an increase in our customers’ costs to manage and dispose of generated wastes and a corresponding decrease in their drilling operations, which developments could have a material adverse effect on our business.
Site Remediation
The Comprehensive Environmental Response, Compensation, and Liability Act, as amended (“CERCLA”) and comparable state laws impose strict, joint and several liability without regard to fault or the legality of the original conduct on certain classes of persons that contributed to the release of a hazardous substance into the environment. These persons include the owner and operator of a disposal site where a hazardous substance release occurred and any company that transported, disposed of, or arranged for the transport or disposal of hazardous substances released at the site. Under CERCLA, such persons may be liable for the costs of remediating the hazardous substances that have been released into the environment, for damages to natural resources, and for the costs of certain health studies. In addition, where contamination may be present, it is not uncommon for the neighboring landowners and other third parties to file claims for personal injury, property damage and recovery of response costs. We have not received notification that we may be potentially responsible for cleanup costs under CERCLA at any site.
Endangered Species
The Endangered Species Act (“ESA”) restricts activities that may result in a “take” of the habitat of endangered or threatened species and provides for substantial penalties in cases where listed species are being harmed. Harm under the ESA includes acts that actually kill or injure wildlife as well as significant habitat modification or degradation that significantly impairs essential behavioral patterns, including breeding, feeding or sheltering. Take prohibitions also protect migratory birds under the Migratory Bird Treaty Act (“MBTA”). In November 2025, the Trump Administration published proposed rules that would revise the procedures taken to list species and to develop associated protections, including regarding interagency cooperation. The ultimate fate or impact of such rules remains uncertain.
The dunes sagebrush lizard is one example of a species whose listing could impact the operations of our customers. The dunes sagebrush lizard is found in the active and semi-stable shinnery oak dunes of southeastern New Mexico and adjacent portions of Texas, including areas where some of our customers operate. On May 20, 2024, the United States Fish and Wildlife Service (“USFWS”) listed the dunes sagebrush lizard as an endangered species. In turn the operations of our customers in any area that is designated as the dunes sagebrush lizard’s habitat may be limited, delayed or, in some circumstances, prohibited, and our customers could be required to comply with expensive conservation measures intended to protect the dunes sagebrush lizard and its habitat.
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Another species whose recent listing could impact our operations and the operations of our customers is the lesser prairie-chicken. In November 2022, the USFWS formally listed two Distinct Population Segments (“DPSs”) of the lesser prairie-chicken under the ESA. The Southern DPS, the habitat of which includes portions of southeast New Mexico and western Texas, was listed as endangered, while the Northern DPS, the habitat of which spans from northern Texas, through eastern Oklahoma, and into southeastern Colorado and southwestern Nebraska, was listed as threatened. The listed territory of the Southern DPS could overlap with the operating areas of some of our customers.
Mining and Workplace Safety
Our sand mining operations are subject to mining safety regulation. The U.S. Mining Safety and Health Administration (“MSHA”) is the primary regulatory organization governing frac sand mining and processing. Accordingly, MSHA regulates quarries, surface mines, underground mines and the industrial mineral processing facilities associated with and located at quarries and mines. The mission of MSHA is to administer the provisions of the Federal Mine Safety and Health Act of 1977 as amended by the Mine Improvement and New Emergency Response (MINER) Act of 2006 and to enforce compliance with mandatory miner safety and health standards. As part of MSHA’s oversight, representatives perform at least two unannounced inspections annually for each above-ground facility.
OSHA has promulgated rules for workplace exposure to respirable silica for several other industries. Respirable silica is a known health hazard for workers exposed over long periods. In April 2024, MSHA issued final rules regarding Lowering Miners’ Exposure to Respirable Crystalline Silica and Improving Respiratory Protection, which, among other updates, reduced the exposure limits, required immediate corrective actions if exposure limits are exceeded, required exposure sampling and no-cost medical surveillance, and updated respiratory protection requirements. While MSHA has indicated that it plans to reconsider certain aspects of the rules that are currently subject to litigation, the ultimate outcome and requirements are uncertain. Although we already engage in health and safety monitoring and provide protective equipment to workers, any more stringent requirements may result in additional costs or liabilities.
Environmental Reviews
Our operations may be subject to broad environmental review under the National Environmental Policy Act, as amended, (“NEPA”). NEPA requires federal agencies to evaluate the environmental impact of all “major federal actions” significantly affecting the quality of the human environment. The granting of a federal permit for a major development project, such as a mining operation, may be considered a “major federal action” that requires review under NEPA. As part of this evaluation, the federal agency considers a broad array of environmental impacts, including, among other things, impacts on air quality, water quality, wildlife (including threatened and endangered species), historic and archeological resources, geology, socioeconomics, and aesthetics. NEPA also requires the consideration of alternatives to the project. The NEPA review process, especially the preparation of a full environmental impact statement, can be time consuming and expensive. The purpose of the NEPA review process is to inform federal agencies’ decision-making on whether federal approval should be granted for a project and to provide the public with an opportunity to comment on the environmental impacts of a proposed project. Though NEPA requires only that an environmental evaluation be conducted and does not mandate a particular result, a federal agency could decide to deny a permit or impose certain conditions on its approval, based on its environmental review under NEPA, or a third party could challenge the adequacy of a NEPA review and thereby delay the issuance of a federal permit or approval. While the White House Council on Environmental Quality (“CEQ”) has historically issued implementing regulations for NEPA, on January 8, 2026, the CEQ issued a final rule rescinding its NEPA implementing regulations. However, various federal governmental agencies have published updated NEPA regulations that apply to such agencies’ actions. Over the years, there have been various proposals to revise the scope of NEPA or limit associated reviews, including certain streamlining provisions in the “One Big Beautiful Bill Act” (“OBBBA”) adopted in 2025, and we cannot predict what impacts, if any, they will have on our operations.
State and Local Regulation
We are subject to a variety of state and local environmental review and permitting requirements. Some states, including Wisconsin where our current projects are located, have state laws similar to NEPA; thus, our development of a new site or the expansion of an existing site may be subject to comprehensive state environmental reviews even if it is not subject to NEPA. In some cases, the state environmental review may be more stringent than the federal review. Our operations may require state-law based permits in addition to federal permits, requiring state agencies to consider a range of issues, many the same as federal agencies, including, among other things, a project’s impact on wildlife and their habitats, historic and archaeological sites, aesthetics, agricultural operations, and scenic areas. Wisconsin has specific permitting and review processes for commercial silica mining operations, and state agencies may impose different or additional monitoring or mitigation requirements than federal agencies. The development of new sites and our existing operations also are subject to a variety of local environmental and regulatory requirements, including land use, zoning, building, and transportation requirements.
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Demand for frac sand in the oil and natural gas industry drove a significant increase in the production of frac sand. As a result, some local communities expressed concern regarding silica sand mining operations. These concerns have generally included exposure to ambient silica sand dust, truck traffic, water usage and blasting. In response, certain state and local communities have developed or are in the process of developing regulations or zoning restrictions intended to minimize dust from becoming airborne, control the flow of truck traffic, significantly curtail the amount of practicable area for mining activities, provide compensation to local residents for potential impacts of mining activities and, in some cases, ban issuance of new permits for mining activities. To date, we have not experienced any material impact to our existing mining operations or planned capacity expansions as a result of these types of concerns. We would expect this trend to continue as oil and natural gas production increases.
In August 2014, we were accepted as a Tier 1 participant in Wisconsin’s voluntary Green Tier program, which encourages, recognizes and rewards companies for voluntarily exceeding environmental, health and safety legal requirements. Successful Tier 1 participants are required to demonstrate a strong record of environmental compliance, develop and implement an environmental management system meeting certain criteria, conduct and submit annual performance reviews to the Wisconsin Department of Natural Resources, promptly correct any findings of non-compliance discovered during these annual performance reviews, and make certain commitments regarding future environmental program improvements. Our most recent annual report required under the Tier 1 protocol was submitted to the Green Tier Program contact in April 2025.
Employees
As of December 31, 2025, we employed 318 people, of which 31 were employed under a collective bargaining agreement. The current collective bargaining agreements expire April 30, 2027. We offer competitive salaries and a comprehensive package of employee benefits, including bonuses, retirement savings plans, medical, dental, life and disability coverage. We consider our employee relations to be good.
Executive Officers of the Registrant
Charles E. Young
Charles E. Young was named Chief Executive Officer in July 2014. Mr. Young has also served as a director since September 2011. Mr. Young founded Smart Sand, LLC (our predecessor) and served as its President from November 2009 to August 2011. Mr. Young served as our President and Secretary from September 2011 to July 2014. Mr. Young has over 25 years of executive and entrepreneurial experience in the high-technology, telecommunications and renewable energy industries. He previously served as the President and Founder of Premier Building Systems, a construction, solar, geothermal and energy audit company in Pennsylvania and New Jersey from 2006 to 2011. Mr. Young serves as a director for Gravity Oilfield Services, Inc., a privately-held company. Mr. Young received a B.A. in Political Science from Miami University. Mr. Young is the brother of William John Young, our Chief Operating Officer, and James D. Young, our Executive Vice President, General Counsel and Secretary. We believe that Mr. Young’s industry experience and deep knowledge of our business makes him well suited to serve as Chief Executive Officer and Director.
Lee E. Beckelman
Lee E. Beckelman was named Chief Financial Officer in August 2014. From December 2009 to February 2014, Mr. Beckelman served as Executive Vice President and Chief Financial Officer of Hilcorp Energy Company, an exploration and production company. From February 2008 to October 2009, he served as the Executive Vice President and Chief Financial Officer of Price Gregory Services, Incorporated, a crude oil and natural gas pipeline construction firm until its sale to Quanta Services. Prior thereto, Mr. Beckelman served in various roles from 2002 to 2007 at Hanover Compressor Company, an international oilfield service company, until its merger with Universal Compression to form Exterran Holdings. Mr. Beckelman received his BBA in Finance with High Honors from the University of Texas at Austin.
William John Young
William John Young was named Chief Operating Officer in April 2018. Prior to that time, he served as Executive Vice President of Sales and Logistics from October 2016 to April 2018. Mr. Young served as Vice President of Sales and Logistics from May 2014 to September 2016 and Director of Sales from November 2011 to April 2014. Prior to joining us, Mr. Young was a Director of Sales for Comcast Corporation from 2002 to 2011. Mr. Young brings over 25 years of experience in the mining, commercial telecommunications and broadband industries. Mr. Young received a BSc in Biology from Dalhousie University. Mr. Young is the brother of Charles E. Young, our Chief Executive Officer and member of our board of directors, and James D. Young, our Executive Vice President, General Counsel and Secretary.
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Robert Kiszka
Robert Kiszka was named Executive Vice President of Operations in May 2014. Previously, Mr. Kiszka served as the Vice President of Operations from September 2011 to May 2014. Mr. Kiszka has over 25 years of construction, real estate, renewable energy and mining experience. Mr. Kiszka has been the owner of A-1 Bracket Group Inc. since 2005 and was a member of Premier Building Systems LLC from 2010 to 2011. Mr. Kiszka attended Pedagogical University in Krakow, Poland and Rutgers University.
Ronald P. Whelan
Ronald P. Whelan was named Executive Vice President of Last Mile Solutions in January 2025. Prior to that time, he served as Executive Vice President of Sales from June 2018 to December 2024, Executive Vice President of Business Development from April 2017 to June 2018, Vice President of Business Development from September 2016 to March 2017 and as Director of Business Development from April 2014 to August 2016. Prior to being named Director of Business Development, Mr. Whelan was the Operations Manager responsible for the design, development and production of the Oakdale facility from November 2011 to April 2014. Before joining Smart Sand, Mr. Whelan ran his own software design company from 2004 to 2011 and was a member of Premier Building Systems LLC from 2008 to 2009. Mr. Whelan has over 20 years of entrepreneurial experience in mining, technology and renewable energy industries. Mr. Whelan received a B.A. in Marketing from Bloomsburg University and M.S. in Instructional Technology from Bloomsburg University.
James D. Young
James D. Young was named Executive Vice President, General Counsel and Secretary in June 2017. Prior to joining us, Mr. Young was a partner of the law firm Fox Rothschild LLP, where he worked for thirteen years and served as our outside general counsel. Mr. Young received a J.D. from Rutgers University School of Law and a B.A. in History and Political Science from the University of Toronto. Mr. Young is the brother of Charles E. Young, our Chief Executive Officer and member of our board of directors, and William John Young, our Chief Operating Officer.
Available Information
Our website address is www.smartsand.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports are available on our website, without charge, as soon as reasonably practicable after they are filed electronically with the SEC. The SEC also maintains a website that contains reports, proxy and information statements and other information statements and other information regarding issuers who file electronically with the SEC. The SEC’s website address is www.sec.gov.
ITEM 1A. — RISK FACTORS
Risks Inherent in Our Business
Our business and financial performance depend on the level of activity in the oil and natural gas industry.
Substantially all of our revenues are derived from sales to companies in the oil and natural gas industry. As a result, our operations are dependent on the levels of activity in oil and natural gas exploration, development and production and prevailing oil and natural gas prices. More specifically, the demand for the proppants we produce and our wellsite storage and proppant management solutions is closely related to the number of oil and natural gas wells completed in geological formations where sand-based proppants are used in fracturing activities. These activity levels are affected by both short- and long-term trends in oil and natural gas prices, among other factors.
Oil and natural gas prices and, therefore, the level of exploration, development and production activity, experienced a high level of volatility in recent years. In addition, prices can be affected by a number of factors beyond our control, including weather conditions, seasonal trends, domestic and foreign supply of and demand for oil and natural gas, domestic, local and foreign governmental regulations, tariffs and taxes, including environmental and climate change regulation, among others.
A prolonged reduction in oil and natural gas prices or a sustained lack of key resources that affect drilling activity, whether due to recession, political developments or other events, would generally depress the level of oil and natural gas exploration, development, production and well completion activity and would result in a corresponding decline in the demand for the proppants we produce and our wellsite proppant storage solutions. Such a decline would have a material adverse effect on our business, results of operation and financial condition. The commercial development of economically viable alternative
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energy sources (such as wind, solar, geothermal, tidal, batteries, fuel cells and biofuels) could have a similar effect. In addition, certain U.S. federal income tax deductions currently available with respect to oil and natural gas exploration and development may be eliminated. Any future decreases in the rate at which oil and natural gas reserves are discovered or developed, whether due to the passage of legislation, increased governmental regulation leading to limitations, or prohibitions on exploration and drilling activity, including hydraulic fracturing, or other factors, could have a material adverse effect on our business and financial condition, even in a stronger oil and natural gas price environment.
A significant portion of our revenues have been generated with a limited number of customers, and the loss of, material nonpayment or nonperformance by or significant reduction in purchases by any of these customers could adversely affect our business, results of operations and financial condition.
A material portion of our revenues are generated from a limited number of customers. The ability or willingness of each of our customers to maintain their purchases from us will depend on a number of factors that are beyond our control and may include, among other things, the overall operations and financial condition of the counterparty, the condition of the U.S. oil and natural gas exploration and production industry, continuing use of frac sand in hydraulic fracturing operations and general economic conditions. In addition, in depressed market conditions, our customers may reduce the amount of sand they purchase from us or they may be able to obtain comparable products at a lower price. If our customers with long-term contracts experience a significant downturn in their business or financial condition, they may attempt to renegotiate our contracts. For example, certain of our contracts were adjusted in 2020 due to effects of the COVID-19 pandemic, resulting in a combination of reduced average selling prices per ton, adjustments to take-or-pay volumes and length of contract. If any of our major customers substantially reduces or altogether ceases purchasing our sand and we are not able to generate replacement sales of sand into the market, our business, financial condition and results of operations could be adversely affected until such time as we generate replacement sales in the market. In addition, as contracts expire, depending on market conditions at the time, our contracted customers may choose not to extend these contracts which could lead to a significant reduction of sales volumes and corresponding revenues, cash flows and financial condition if we are not able to replace these contracts with new sales volumes. Even if we were to replace any lost volumes, lower prices for our product could materially reduce our revenues, cash flow and financial condition. Additionally, consolidation and vertical integration of pressure pumpers and exploration and production companies continues in the industry and this trend could lead to fewer overall customers for us to market sand to and negatively impact our sales volumes.
We are exposed to the credit risk of our customers, and any material nonpayment or nonperformance by our customers could adversely affect our business, results of operations and financial condition.
We are subject to the risk of loss resulting from nonpayment or nonperformance by our customers. Our credit procedures and policies may not be adequate to fully eliminate customer credit risk. If we fail to adequately assess the creditworthiness of existing or future customers or unanticipated deterioration in their creditworthiness, any resulting increase in nonpayment or nonperformance by them and our inability to re-market or otherwise use the production could have a material adverse effect on our business, results of operations and financial condition. A decline in natural gas and crude oil prices could negatively impact the financial condition of our customers and sustained lower prices could impact their ability to meet their financial obligations to us. Further, our contract counterparties may not perform or adhere to our existing or future contractual arrangements. To the extent one or more of our contract counterparties is in financial distress or commences bankruptcy proceedings, contracts with these counterparties may be subject to renegotiation or rejection under applicable provisions of the United States Bankruptcy Code. Any material nonpayment or nonperformance by our contract counterparties due to inability or unwillingness to perform or adhere to contractual arrangements could adversely affect our business and results of operations.
We face significant competition that may cause us to lose market share.
The proppant industry is highly competitive. The proppant market is characterized by a small number of large, national producers and a larger number of small, regional or local producers. Competition in this industry is based on price, consistency and quality of product, site location, distribution and logistics capabilities, customer service, reliability of supply, breadth of product offering (including wellsite storage products and services) and technical support.
Some of our competitors have greater financial and other resources than we do. Also, certain of our competitors have emerged from bankruptcy in recent years and may be able to offer more attractive pricing as a result of lower debt obligations. In addition, our larger competitors may develop technology superior to ours or may have production facilities that offer lower-cost transportation to certain customer locations than we do. When the demand for hydraulic fracturing services decreases or the supply of proppant available in the market increases, prices in the frac sand market can materially decrease. Furthermore, oil and natural gas exploration and production companies and other providers of hydraulic fracturing services have acquired and in the future may acquire their own frac sand reserves to fulfill their proppant requirements, and these other market participants
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may expand their existing frac sand production capacity, all of which would negatively impact demand for our frac sand. In addition, increased competition in the proppant industry could have an adverse impact on our ability to enter into long-term contracts or to enter into contracts on favorable terms. For example, supplies of regional frac sand from our competitors became available in 2018, starting in the Permian Basin of West Texas, and have continued to expand to certain other basins in or near where we sell sand. Regional frac sand has had a negative impact on our ability to sell our Northern White Sand in the Permian Basin or other markets in close proximity to these regional mines. The reduced ability to sell sand in operating basins with regional sand supply has led to increased competition among our competitors in other basins and could lead to pressure to reduce prices to compete effectively.
We may be required to make substantial capital expenditures to maintain and grow our asset base. We may not realize enough of a return on such capital expenditures to cover their costs. Also, the inability to obtain needed capital or financing on satisfactory terms, or at all, could have an adverse effect on our business, results of operations and financial condition.
We rely on cash generated from our operations and the availability of credit to fund our capital expenditures. We have made significant capital expenditures, and expect to make additional capital expenditures in the future. We cannot provide any assurance that we will receive an adequate return on such capital expenditures.
In addition, our ability to maintain existing debt financing or to access the capital markets for future equity or debt offerings may be limited by our financial condition at the time of any such financing or offering, the covenants or borrowing base restrictions contained in our FCB ABL Credit Facility or other current or future debt agreements, adverse market conditions or other contingencies and uncertainties that are beyond our control. Our failure to obtain the funds necessary to maintain, develop and increase our asset base could adversely impact our business, results of operations and financial condition.
Even if we are able to maintain existing financing or access the capital markets, incurring additional debt may significantly increase our interest expense and financial leverage, and our level of indebtedness could restrict our ability to fund future development and acquisition activities. In addition, the issuance of additional equity interests may result in significant dilution to our existing common stockholders.
Inaccuracies in estimates of volumes and qualities of our sand reserves could result in lower than expected sales and higher than expected cost of production.
We rely on our independent reserve engineers’ prepared estimates of our reserves based on engineering, economic and geological data assembled and analyzed by our personnel. However, frac sand reserve estimates are by nature imprecise and depend to some extent on statistical inferences drawn from available data, which may prove unreliable. There are numerous uncertainties inherent in estimating quantities and qualities of reserves and non-reserve frac sand deposits and costs to mine recoverable reserves, including many factors beyond our control. Estimates of economically recoverable frac sand reserves necessarily depend on a number of factors and assumptions, all of which may vary considerably from actual results, such as:
•geological and mining conditions and/or effects from prior mining that may not be fully identified by available data or that may differ from experience;
•assumptions concerning future prices of frac sand, operating costs, mining technology improvements, development costs and reclamation costs; and
•assumptions concerning future effects of regulation, including wetland mitigation requirements, the issuance of required permits and the assessment of taxes by governmental agencies.
Any inaccuracy in our independent reserve engineer’s estimates related to our frac sand reserves or non-reserve frac sand deposits could result in lower than expected sales or higher than expected costs. For example, estimates of our proven and probable recoverable sand reserves assume that our revenue and cost structure will remain relatively constant over the life of our reserves. If these assumptions prove to be inaccurate, some or all of our reserves may not be economically mineable, which could have a material adverse effect on our results of operations and cash flows. In addition, our current customer contracts require us to deliver frac sand that meets certain specifications. If estimates of the quality of our reserves, including the volumes of the various specifications of those reserves, prove to be inaccurate, we may incur significantly higher excavation costs without corresponding increases in revenues, we may not be able to meet our contractual obligations, or our facilities may have a shorter than expected reserve life, any of which could have a material adverse effect on our results of operations and cash flows.
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Our sand is currently produced at three facilities and our sales are dependent on delivery by railroads. Any adverse developments at our production facilities, rail terminals, or on any rail line could have a material adverse effect on our business, financial condition and results of operations.
All of our sand sales are currently produced at our facilities near Oakdale, Wisconsin, Ottawa, Illinois and Blair, Wisconsin. We ship a substantial portion of our sand through our rail terminals. Any adverse development at these facilities, our rail terminals, or on any of the rail lines we use to deliver our sand due to catastrophic events, weather, or any other event that would cause us to curtail, suspend or terminate operations at such facilities or terminals, could result in us being unable to meet our contracted sand deliveries. Although we have access to more than one Class I rail line, we may not be able to facilitate all shipments of product from one facility. We maintain insurance coverage to cover a portion of these types of risks; however, there are potential risks associated with our operations not covered by insurance. There also may be certain risks covered by insurance where the policy does not reimburse us for all of the costs related to a loss. Downtime or other delays or interruptions to our operations that are not covered by insurance could have a material adverse effect on our business, results of operations and financial condition. In addition, under our long-term take-or-pay contracts, if we are unable to deliver contracted volumes and a customer arranges for delivery from a third party at a higher price, we may be required to pay that customer the difference between our contract price and the price of the third-party product.
Changes or consolidation within the railroad industry could adversely affect our business, operations, and competitiveness.
The North American rail industry has experienced, and may continue to experience, significant consolidation. Any future mergers or acquisitions among Class I railroads could reduce the number of carriers available to us, limit competitive shipping options, and increase our transportation costs, result in reduced rail access, diminished service levels, or unfavorable changes to routing options.
A consolidation affecting these carriers could also materially impact our operations by restricting our ability to move unit trains out of key origin points. Loss of access or reduced service in these corridors would affect all three of our operating sites unless conditions were imposed in the merger approval process to preserve open access. Such constraints could impair our ability to efficiently ship product to customers, increase transportation costs, and negatively affect our competitiveness relative to mines or transload facilities served by the surviving railroad. Any of these developments could have a material adverse effect on our business, financial condition, and results of operations.
If we are unable to make acquisitions on economically acceptable terms, our future growth could be limited.
A portion of our strategy to grow our business is dependent on our ability to make acquisitions. If we are unable to make acquisitions from third parties because we are unable to identify attractive acquisition candidates or negotiate acceptable purchase contracts, we are unable to obtain financing for these acquisitions on economically acceptable terms or we are outbid by competitors, our future growth may be limited. Any acquisition involves potential risks, some of which are beyond our control, including, among other things:
•mistaken assumptions about revenues and costs, including synergies;
•inability to integrate successfully the businesses we acquire;
•inability to hire, train or retain qualified personnel to manage and operate our business and newly acquired assets;
•the assumption of unknown liabilities;
•limitations on rights to indemnity from the seller;
•mistaken assumptions about the overall costs of equity or debt;
•diversion of management’s attention from other business concerns;
•unforeseen difficulties operating in new product areas or new geographic areas; and
•customer or key employee losses at the acquired businesses.
If we consummate any future acquisitions, our capitalization and results of operations may change significantly, and common stockholders will not have the opportunity to evaluate the economic, financial and other relevant information that we will consider in determining the application of these funds and other resources.
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Restrictions in our FCB ABL Credit Facility may limit our ability to capitalize on potential acquisition and other business opportunities.
The operating and financial restrictions and covenants in our FCB ABL Credit Facility could restrict our ability to finance future operations or capital needs or to expand or pursue our business activities. For example, our FCB ABL Credit Facility restricts or limits our ability to:
•grant liens;
•incur additional indebtedness;
•engage in a merger, consolidation or dissolution;
•enter into transactions with affiliates;
•sell or otherwise dispose of assets, businesses and operations;
•materially alter the character of our business as conducted at the time of filing of this annual report; and
•make acquisitions, investments and capital expenditures.
Furthermore, the borrowing base under our FCB ABL Credit Facility is recalculated from time to time based on our eligible accounts receivable and inventory. Decreases in our eligible accounts receivable and inventory may limit our available borrowing levels and may require us to comply with certain financial ratios.
We face distribution and logistical challenges in our business.
Transportation and logistical operating expenses comprise a significant portion of the costs incurred by our customers to deliver frac sand to the wellhead, which could favor suppliers located in close proximity to the customer. As oil and natural gas prices fluctuate, our customers may shift their focus to different resource plays, some of which may be located in geographic areas that do not have well-developed transportation and distribution infrastructure systems, or seek contracts with additional delivery and pricing alternatives including contracts that sell product on an “as-delivered” basis at the target shale basin. Serving our customers in these less-developed areas presents distribution and other operational challenges that may affect our sales and negatively impact our operating costs and any delays we experience in optimizing our logistics infrastructure or developing additional origination and destination points may adversely affect our ability to renew existing contracts with customers seeking additional delivery and pricing alternatives. Disruptions in transportation services, including shortages of railcars, lack of developed infrastructure, weather-related problems, flooding, drought, accidents, mechanical difficulties, strikes, lockouts, bottlenecks, environmental restrictions or other events could affect our ability to timely and cost effectively deliver to our customers and could temporarily impair the ability of our customers to take delivery and, in certain circumstances, constitute a force majeure event under our customer contracts, permitting our customers to suspend taking delivery of and paying for our frac sand (and in some cases terminating the agreement after a period of time). Additionally, increases in the price of transportation costs, including freight charges, fuel surcharges, transloading fees, terminal switch fees and demurrage costs, could negatively impact operating costs if we are unable to pass those increased costs along to our customers. Accordingly, because we are so dependent on rail infrastructure, if there are disruptions of the rail transportation services utilized by us or our customers, and we or our customers are unable to find alternative transportation providers to transport our products, our business and results of operations could be adversely affected. Further, declining volumes could result in railcar over-capacity, which would lead to railcar storage fees while, at the same time, we would continue to incur lease costs for those railcars in storage. Failure to find long-term solutions to these logistical challenges could adversely affect our ability to respond quickly to the needs of our customers or result in additional increased costs, and thus could negatively impact our business, results of operations and financial condition.
We may be adversely affected by decreased demand for frac sand due to the development of effective alternative proppants or new processes to replace hydraulic fracturing.
Frac sand is a proppant used in the completion and re-completion of oil and natural gas wells to stimulate and maintain oil and natural gas production through the process of hydraulic fracturing. Frac sand is the most commonly used proppant and is less expensive than other proppants, such as resin-coated sand and manufactured ceramics. A significant shift in demand from frac sand to other proppants, or the development of new processes to make hydraulic fracturing more efficient that could replace it altogether, could cause a decline in the demand for the frac sand we produce and result in a material adverse effect on our business, results of operations and financial condition.
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An increase in the supply of frac sand having similar characteristics as the frac sand we produce could make it more difficult for us to maintain sales with existing customers or obtain new customers on favorable terms, or at all.
If significant new reserves of frac sand are discovered and developed, and those frac sands have similar characteristics to the frac sand we produce, we may be unable to maintain sales with our existing customers, obtain new customers on favorable terms, or at all. Specifically, if frac sand is oversupplied, our customers may reduce their sales volumes, may not be willing to purchase sand from us, or may demand lower prices, and any one or combination of the preceding could have a material adverse effect on our business, results of operations and financial condition. For example, new supplies of regional frac sand from our competitors became available in 2018, primarily in the Permian Basin of West Texas. Since then, other regional frac sand mines have opened in or near additional basins where we sell sand. These new supplies have had a negative impact on our ability to sell our Northern White Sand in the Permian Basin or other markets in close proximity to these regional mines.
Our operations are subject to operational hazards and unforeseen interruptions for which we may not be adequately insured.
Our operations are exposed to potential natural disasters, including blizzards, tornadoes, storms, floods, other adverse weather conditions and earthquakes. In addition, our employees could be subject to another pandemic similar to COVID-19 or another outbreak at one or more of our facilities. If any of these events were to occur, we could incur substantial losses because of operational downtime, personal injury or loss of life, severe damage to and destruction of property and equipment, and pollution or other environmental damage resulting in curtailment or suspension of our operations.
We are not fully insured against all risks incident to our business, including the risk of our operations being interrupted due to severe weather and natural disasters. Furthermore, we may be unable to maintain or obtain insurance of the type and amount we desire at reasonable rates. As a result of market conditions, premiums and deductibles for some of our insurance policies have increased and could escalate further. In addition, sub-limits have been imposed for certain risks. In some instances, certain insurance could become unavailable or available only for reduced amounts of coverage. If we were to incur a significant liability for which we are not fully insured, it could have a material adverse effect on our business, results of operations and financial condition.
Our production process consumes large amounts of natural gas and electricity. An increase in the price or a significant interruption in the supply of these or any other energy sources could have a material adverse effect on our business, results of operations and financial condition.
Natural gas and electricity costs represented approximately 5% of our total cost of goods sold for the year ended December 31, 2025. Natural gas is currently the primary fuel source used for drying in our frac sand production process. Electricity is also relied upon for our washing process. As a result, our profitability will be impacted by the price and availability of natural gas and electricity we purchase from third parties. Because we have not contracted for all of our natural gas usage on a fixed-price basis, our costs and profitability will be impacted by fluctuations in prices for natural gas. The price and supply of natural gas is unpredictable and can fluctuate significantly based on domestic, international, political and economic circumstances, as well as other events outside our control, such as changes in supply and demand due to weather conditions, actions by OPEC, governmental regulations and sanctions, regional production patterns, security threats and environmental concerns. Electricity prices can also be volatile and may fluctuate due to regional generation capacity constraints, transmission congestion, grid reliability concerns, increasing demand, renewable integration challenges, and regulatory or market changes affecting electric utilities or regional transmission organizations. In addition, any operational issues or outages affecting the electric grid, including extreme weather events or insufficient regional power availability, could interrupt our access to electricity and disrupt our production processes.
In addition, potential climate change regulations or carbon or emissions taxes could result in higher cost of production for energy, which may be passed on to us in whole or in part. In order to manage the risk of volatile natural gas prices, we may hedge natural gas prices through the use of fixed price supply contracts or derivative financial instruments, such as forwards, swaps and futures. However, these measures carry risk (including nonperformance by counterparties) and do not in any event entirely eliminate the risk of decreased margins as a result of natural gas price increases. We generally do not hedge electricity costs, and increased reliance on electric‑powered equipment or tightening emissions regulations affecting power generation could further expose us to increases in electricity prices. We further attempt to mitigate these risks by including in our sales contracts fuel surcharges based on natural gas prices exceeding certain benchmarks. A significant increase in the price of energy that is not recovered through an increase in the price of our products or covered through our hedging arrangements or an extended interruption in the supply of natural gas or electricity to our production facilities could have a material adverse effect on our business, results of operations and financial condition.
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Increases in the price of diesel fuel may adversely affect our business, results of operations and financial condition.
Diesel fuel costs represented approximately 2% of our total cost of goods sold for the year ended December 31, 2025. Diesel fuel costs generally fluctuate with increasing and decreasing world crude oil prices and, accordingly, are subject to political, economic and market factors that are outside of our control. Our operations are dependent on earth moving equipment, locomotives and tractor trailers, and diesel fuel costs are a significant component of the operating expense of these vehicles. Accordingly, increased diesel fuel costs could have an adverse effect on our business, results of operations and financial condition.
A facility closure entails substantial costs, and if we close any of our facilities sooner than anticipated, our results of operations may be adversely affected.
We base our assumptions regarding the life of our facilities on detailed studies that we perform from time to time, but our studies and assumptions may not prove to be accurate. If we close any of our operating facilities sooner than expected, sales may decline. The closure of our operating facilities would involve significant fixed closure costs, including accelerated employment legacy costs, severance-related obligations, reclamation and other environmental costs and the costs of terminating long-term obligations, including energy contracts and equipment leases. We accrue for the costs of reclaiming open pits, stockpiles, non-saleable sand, ponds, roads and other mining support areas over the estimated mining life of our property. If we were to reduce the estimated life of our operating facilities, the fixed facility closure costs would be applied to a shorter period of production, which would increase the cost of production per ton produced and could materially and adversely affect our business, results of operations and financial condition.
Applicable statutes and regulations require that mining property be reclaimed following a mine closure in accordance with specified standards and an approved reclamation plan. The plan addresses matters such as removal of facilities and equipment, regrading, prevention of erosion and other forms of water pollution, re-vegetation and post-mining land use. We may be required to post a surety bond or other form of financial assurance equal to the cost of reclamation as set forth in the approved reclamation plan. The establishment of the final mine closure reclamation liability is based on estimated costs and requires various estimates and assumptions. If our accruals for expected reclamation and other costs associated with facility closures for which we will be responsible were later determined to be insufficient, our business, results of operations and financial condition may be adversely affected.
Our operations are dependent on our rights and ability to mine our properties and on our having renewed or received the required permits and approvals from governmental authorities and other third parties.
We hold numerous governmental, environmental, mining and other permits, water rights and approvals authorizing operations at our mining and operating facilities. For our extraction and processing in Wisconsin and Illinois, we must obtain permits from various federal, tribal, state and local authorities. For example, at the federal level, a Mine Identification Request (MSHA Form 7000-51) must be filed and obtained before mining commences. If wetlands are impacted, a permit from the U.S. Army Corps of Engineers is required. At the state level, a series of permits are required related to air quality, wetlands, water quality (waste water, storm water), grading permits, protected species, archeological assessments and high capacity wells in addition to others depending upon site specific factors and operational detail. At the local level, zoning, building, storm water, erosion control, road usage and access are all regulated and require permitting to some degree. A non-metallic mining reclamation permit is required. Certain permits or approvals may also require consultation with federal, state, tribal, or local authorities. A decision by a governmental agency or other third party to deny or delay issuing a new or renewed permit or approval, or to revoke or substantially modify an existing permit or approval, could have a material adverse effect on our business, results of operations and financial condition.
Title to, and the area of, mineral properties and water rights may also be disputed. Mineral properties sometimes contain claims or transfer histories that examiners cannot verify. A successful claim that we do not have title to our property or lack appropriate water rights could cause us to lose any rights to explore, develop and extract minerals, without compensation for our prior expenditures relating to such property. Our business may suffer a material adverse effect in the event we have title deficiencies.
A shortage of skilled labor together with rising labor costs in the excavation industry may further increase operating costs, which could adversely affect our business, results of operations and financial condition.
Efficient sand excavation using modern techniques and equipment requires skilled laborers, preferably with several years of experience and proficiency in multiple tasks, including processing of mined minerals. If there is a shortage of experienced labor in areas in which we operate, we may find it difficult to hire or train the necessary number of skilled laborers to perform our own operations which could have an adverse impact on our business, results of operations and financial condition.
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Our business may suffer if we lose, or are unable to attract and retain, key personnel.
We depend to a large extent on the services of our senior management team and other key personnel. Members of our senior management and other key employees bring significant experience to the market environment in which we operate. Competition for management and key personnel is intense, and the pool of qualified candidates is limited. The loss of any of these individuals or the failure to attract additional personnel, as needed, could have a material adverse effect on our operations and could lead to higher labor costs or the use of less-qualified personnel. In addition, if any of our executives or other key employees were to join a competitor or form a competing company, we could lose customers, suppliers, know-how and key personnel. We do not maintain key-man life insurance with respect to any of our employees. Our success is dependent on our ability to continue to attract, employ and retain highly skilled personnel.
Our profitability could be negatively affected if we fail to maintain satisfactory labor relations.
As of December 31, 2025, 31 employees in our Illinois facility operated under a collective bargaining agreement. Our collective bargaining agreement expires on April 30, 2027. While we intend to renew the collective bargaining agreement, if we are unable to renegotiate acceptable terms with these employees in the future, we could experience, among other things, strikes, work stoppages or other slowdowns by our workers and increased operating costs as a result of higher wages, health care costs or benefits paid to our employees. An inability to maintain good relations with our workforce could cause a material adverse effect on our business, financial condition, and results of operations.
Failure to maintain effective quality control systems at our mining, processing and production facilities could have a material adverse effect on our business, results of operations and financial condition.
The performance and quality of our products are critical to the success of our business. These factors depend significantly on the effectiveness of our quality control systems, which, in turn, depends on a number of factors, including the design of our quality control systems, our quality-training program and our ability to ensure that our employees adhere to our quality control policies and guidelines. Any significant failure or deterioration of our quality control systems could have a material adverse effect on our business, results of operations and financial condition.
Seasonal and severe weather conditions could have a material adverse impact on our business, results of operations and financial condition.
Our business could be materially adversely affected by severe weather conditions. Severe weather conditions may affect our customers’ operations, thus reducing their need for our products, impact our operations by resulting in weather-related damage to our facilities and equipment and impact our customers’ ability to take delivery of our products at our plant or terminal sites. Any weather-related interference with our operations could force us to delay or curtail services and potentially breach our contractual obligations to deliver minimum volumes or result in a loss of productivity and an increase in our operating costs. Severe weather conditions may also adversely affect our operations as a result of delays in rail shipments.
In addition, winter weather conditions impact our operations by causing us to reduce our excavation and wet plant related production activities during the winter months. During non-winter months, we excavate excess sand to build a stockpile that will feed the dry plants (along with the sand provided by our year-round wet plant), which continue to operate during the winter months. Unexpected winter conditions (such as winter arriving earlier than expected or lasting longer than expected) may result in us not having a sufficient sand stockpile to operate our dry plants during winter months, which could result in us being unable to deliver our contracted sand amounts during such time and lead to a material adverse effect on our business, results of operations and financial condition. Certain of these events or conditions may also be exacerbated by climate change. For more information, see our risk factor “Climate change could result in various risks for us and our customers.”
Our cash flow fluctuates on a seasonal basis.
Our cash flow is affected by a variety of factors, including weather conditions and seasonal periods. Seasonal fluctuations in weather impact the production levels at our wet processing plant. While our sales and finished product production levels are contracted evenly throughout the year, our mining and wet sand processing activities are reduced during winter months. As a consequence, we experience lower cash costs in the first and fourth quarter of each calendar year, and higher cash operating costs in the second and third quarter of each calendar year in which we overproduce to meet demand for the winter months.
We do not own the land on which our in-basin transload terminals are located, which could disrupt our operations.
We do not own the land on which our in-basin transload terminals are located and instead own a leasehold interest and right-of-way for the operation of these facilities. Upon expiration, termination or other lapse of our current leasehold terms, we may be unable to renew our existing leases or rights-of-way on terms favorable to us, or at all. Any renegotiation on less
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favorable terms or inability to enter into new leases on economically acceptable terms upon the expiration, termination or other lapse of our current leases or rights-of-way could cause us to cease operations on the affected land, increase costs related to continuing operations elsewhere and have a material adverse effect on our business, financial condition and results of operations.
Geopolitical conflicts and instability; including terrorist attacks or armed conflicts, could harm our business.
Global and domestic terrorist activities, anti-terrorist efforts and other armed conflicts could adversely affect the U.S. and global economies and could prevent us from meeting financial and other obligations. We could experience loss of business, delays or defaults in payments from payors or disruptions of fuel supplies and markets if pipelines, production facilities, processing plants, refineries or transportation facilities are direct targets or indirect casualties of an act of terror or war. Such activities could reduce the overall demand for oil and natural gas, which, in turn, could also reduce the demand for our frac sand. Global and domestic terrorist activities and the threat of potential terrorist activities and any resulting physical damage and economic downturn could adversely affect our results of operations, impair our ability to raise capital or otherwise adversely impact our ability to realize certain business strategies.
Diminished access to water may adversely affect our operations or the operations of our customers.
The mining and processing activities at our facilities require significant amounts of water. Additionally, the development of oil and natural gas properties through fracture stimulation likewise requires significant water use. We have obtained water rights that we currently use to service the activities at our operating facilities, and we plan to obtain all required water rights to service other properties we may develop or acquire in the future. However, the amount of water that we and our customers are entitled to use pursuant to water rights must be determined by the appropriate regulatory authorities in the jurisdictions in which we and our customers operate. Such regulatory authorities may amend the regulations regarding such water rights, increase the cost of maintaining such water rights or eliminate our current water rights, and we and our customers may be unable to retain all or a portion of such water rights. For example, particularly during drought conditions, local governments may curtail water usage for industrial or mineral production purposes. These new regulations, which could also affect local municipalities and other industrial operations, could have a material adverse effect on our operating costs and effectiveness if implemented. Such changes in laws, regulations or government policy and related interpretations pertaining to water rights may alter the environment in which we and our customers do business, which may negatively affect our financial condition and results of operations. The availability of water may also change due to various environmental, demographic, or other pressures, including climate change. For more information, see our risk factor “Climate change could result in various risks for us and our customers.”
We and our third-party providers may be subject to cybersecurity risks, cyberattacks, and other interruptions or failures in our information technology systems.
We rely on sophisticated computer systems, hardware, softwate, networks and infrastructure to support our business, including process control technology (collectively “IT Systems”). Any of these IT Systems may be susceptible to outages due to fire, floods, power loss, telecommunication failures, usage errors by employees, computer viruses, cyber-attacks or other security breaches, or similar events. If our IT Systems are damaged or cease to function properly, we may have to make a significant investment to fix or replace them, and we may suffer loss of critical data and interruptions or delays in our operations.
We own and manage some of these IT Systems but also rely on third parties for a range of IT Systems and related products and services. We and certain of our third-party providers collect, maintain and process data about customers, employees, business partners and others, including information about individuals, as well as proprietary information belonging to our business such as trade secrets (collectively, “Confidential Information”). We face numerous and evolving cybersecurity risks that threaten the confidentiality, integrity and availability of our IT Systems and Confidential Information, including from diverse threat actors, such as state-sponsored organizations, opportunistic hackers and hacktivists, as well as through diverse attack vectors, such as computer viruses, malware (including ransomware), malfeasance by insiders, human or technological error, and as a result of malicious code or misconfigurations, bug or other vulnerabilities in commercial software that is integrated into our (or our suppliers’ or service providers’) IT Systems, products or services, social engineering/phishing attacks, denial of service attacks and other information security threats.
Cyberattacks are expected to accelerate on a global basis in frequency and magnitude as threat actors are becoming increasingly sophisticated in using techniques and tools—including artificial intelligence— that circumvent security controls, evade detection and remove forensic evidence. As a result, we may be unable to detect, investigate, remediate or recover from future attacks or incidents. There can also be no assurance that our cybersecurity risk management program and processes, including our policies, control or procedures, will be fully implemented, complied with or effective in protecting our IT Systems and Confidential Information.
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To date, cyber-attacks have not had a material impact on our financial condition, results or business; however, we could suffer material financial or other losses in the future and we are not able to predict the severity of these attacks. The occurrence of a cyber-attack, breach, unauthorized access, misuse, computer virus or other malicious code or other cyber security event could jeopardize or result in the unauthorized disclosure, gathering, monitoring, misuse, corruption, loss or destruction of confidential and other information that belongs to us, our customers, our counterparties, or third-party service providers that is processed and stored in, and transmitted through, our computer systems and networks. The occurrence of such an event could also result in damage to our IT Systems, or otherwise cause interruptions or malfunctions in our, our customers’, our counterparties’ or third parties’ operations. Any adverse impact to the availability, integrity or confidentiality of our IT Systems or Confidential Information could result in significant losses, loss of customers and business opportunities, reputational damage, litigation or proceedings (such as class actions), regulatory fines, penalties or intervention, reimbursement or other compensatory costs, or otherwise adversely affect our business, financial condition or results of operations. Finally, we cannot guarantee that any costs and liabilities incurred in relation to an attack or incident will be covered by our existing insurance policies or that applicable insurance will be available to us in the future on economically reasonable terms or at all.
The reliability and capacity of our IT Systems are critical to our operations. Any material disruption in our IT Systems, or delays or difficulties in implementing or integrating new systems or enhancing current systems, could have an adverse effect on our business, and results of operations.
The integration of artificial intelligence into our operations, while potentially beneficial, presents significant risks that could adversely affect our business, financial condition, and results of operations.
Recent technological advances in artificial intelligence and machine-learning technology both present opportunities and pose risks to us. If we fail to keep pace with rapidly evolving technological developments in AI, our competitive position and business results may suffer. The introduction of these technologies, particularly generative AI, into internal processes and/or new and existing offerings may result in new or expanded risks and liabilities, including due to enhanced governmental or regulatory scrutiny, litigation, compliance issues, ethical concerns, confidentiality or security risks, as well as other factors that could adversely affect our business, reputation, and financial results. In addition, our personnel could, unbeknownst to us, improperly utilize AI and machine-learning technology while carrying out their responsibilities. The use of AI in the development of our products and services could also cause loss or theft of intellectual property, as well as subject us to risks related to intellectual property infringement or misappropriation, data privacy and cybersecurity. The use of AI can lead to unintended consequences, including generating content that appears correct but is factually inaccurate, misleading or otherwise flawed, or that results in unintended biases and discriminatory outcomes, which could harm our stakeholders, our reputation and our business and expose us to risks related to inaccuracies or errors in the output of such technologies. We also face risks of competitive disadvantage if our competitors more effectively use AI to drive internal efficiencies or create new or enhanced services that we are unable to compete against on cost, quality or other attributes.
If we are unable to fully protect our intellectual property rights, we may suffer a loss in our competitive advantage.
The commercial success of our SmartSystems wellsite proppant storage solutions depends on patented and proprietary information and technologies, know-how and other intellectual property. Because of the technical nature of this business, we rely on a combination of patent, copyright, trademark and trade secret laws, and restrictions on disclosure to protect our intellectual property. As of December 31, 2025, we had several patents related to our SmartSystems, including patents related to our silo storage system and patents related to lifting and lowering our storage silos. We customarily enter into confidentiality or license agreements with our employees, consultants and corporate partners and control access to and distribution of our design information, documentation and other patented and proprietary information. In addition, in the future we may develop or acquire additional patents or patent portfolios, which could require significant cash expenditures. However, third parties may knowingly or unknowingly infringe our patent or other proprietary rights, or challenge patents or proprietary rights held by us, and pending and future trademark and patent applications may not be approved. Failure to protect, monitor and control the use of our existing intellectual property rights could cause us to lose our competitive advantage and incur significant expenses. It is possible that our competitors or others could independently develop the same or similar technologies or otherwise obtain access to our unpatented technologies. In such case, our trade secrets would not prevent third parties from competing with us. Consequently, our results of operations may be adversely affected. Furthermore, third parties or our employees may infringe or misappropriate our patented or proprietary technologies or other intellectual property rights, which could also harm our business and results of operations. Policing unauthorized use of intellectual property rights can be difficult and expensive, and adequate remedies may not be available.
We may be adversely affected by disputes regarding intellectual property rights of third parties.
Third parties from time to time may initiate litigation against us by asserting that the conduct of our business infringes, misappropriates or otherwise violates intellectual property rights. We may not prevail in any such legal proceedings related to
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such claims, and our storage systems and related items may be found to infringe, impair, misappropriate, dilute or otherwise violate the intellectual property rights of others. If we are sued for infringement and lose, we could be required to pay substantial damages and/or be enjoined from using or selling the infringing products or technology. Any legal proceeding concerning intellectual property could be protracted and costly regardless of the merits of any claim and is inherently unpredictable and could have a material adverse effect on our financial condition, regardless of its outcome.
If we were to discover that our technologies or products infringe valid intellectual property rights of third parties, we may need to obtain licenses from these parties or substantially re-engineer our products in order to avoid infringement. We may not be able to obtain the necessary licenses on acceptable terms, or at all, or be able to re-engineer our products successfully. If our inability to obtain required licenses for our technologies or products prevents us from selling our products, that could adversely impact our financial condition and results of operations.
We currently rely on a limited number of suppliers for certain equipment and materials to build our SmartSystems, and our reliance on a limited number of suppliers for such equipment and materials exposes us to risks including price and timing of delivery.
We currently rely on a limited number of suppliers for equipment and materials to build our SmartSystems. If demand for our systems or the components necessary to build such systems increases or suppliers of equipment face financial distress or bankruptcy, our suppliers may not be able to provide such equipment on schedule at the current price or at all. In particular, steel is the principal raw material used in the manufacture of our systems, and the price of steel has historically fluctuated on a cyclical basis and will depend on a variety of factors over which we have no control, including trade tariffs. Additionally, we depend on a limited number of suppliers for certain mechanical and electrical components that we use in our systems which may not have direct replacements available from alternate suppliers. If our suppliers are unable to provide the raw materials and components needed to build our systems on schedule at the current price or at all, we could be required to seek other suppliers for the raw materials and components needed to build and operate our systems, which may adversely affect our revenues or increase our costs. Any inability to find alternative components at prices or with quality specifications similar to those deployed today could result in delays or a loss of customers.
Unsatisfactory safety performance may negatively affect our customer relationships and, to the extent we fail to retain existing customers or attract new customers, adversely impact our revenues.
Our ability to retain existing customers and attract new business is dependent on many factors, including our ability to demonstrate that we can reliably and safely operate all aspects of our business in a manner that is consistent with applicable laws, rules and permits, which legal requirements are subject to change. In addition, certain customers require compliance with their internal safety protocols. Existing and potential customers consider the safety record of their third-party service providers to be of high importance in their decision to engage such providers. If one or more accidents were to occur in connection with our business, the affected customer may seek to terminate, cancel or substantially reduce its business with us, which could cause us to lose substantial revenues. Furthermore, our ability to attract new customers may be impaired if such potential customers elect not to engage us because they view our safety record as unacceptable. In addition, it is possible that we will experience multiple or particularly severe accidents in the future, causing our safety record to deteriorate. This may be more likely as we continue to grow, if we experience high employee turnover or labor shortage, or if we hire inexperienced personnel to bolster our staffing needs.
We may be subject to legal claims, such as personal injury and property damage, which could materially adversely affect our financial condition, prospects and results of operations.
As we focus on growing our business, our business may become increasingly subject to inherent risks that can cause personal injury or loss of life, damage to or destruction of property, equipment or the environment or the suspension of our operations. In addition, we may be subject to legal proceedings with our customers or suppliers, particularly as it relates to contract disputes. Regardless of the merit of particular claims, litigation may be expensive, time consuming, disruptive to our operations and distracting to management.
The outcome of litigation is inherently uncertain. If one or more legal matters were resolved against us or an indemnified third party in a reporting period for amounts in excess of management’s expectations, our financial condition and operating results for that reporting period could be materially adversely affected. Further, such an outcome could result in significant compensatory, punitive or trebled monetary damages, disgorgement of revenue or profits, remedial corporate measures or injunctive relief against us that could materially adversely affect our financial condition and operating results. We maintain what we believe is customary and reasonable insurance to protect our business against these potential losses, but such insurance may not be adequate to cover our liabilities, and we are not fully insured against all risks.
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Macroeconomic conditions, including inflation, volatility in foreign exchange rates and interest rates, and a financial downturn could negatively affect our business, results of operations, financial condition and liquidity.
Uncertainty on future inflation trends and volatility in foreign exchange rates and interest rates, as well as actual or anticipated declines in domestic or foreign economic growth rates, regional or worldwide increases in tariffs or other trade restrictions, turmoil affecting the U.S. or global financial systems and markets and a severe economic contraction either regionally or worldwide could materially affect our business and financial condition. These events could impact our ability to finance operations by worsening the actual or anticipated future drop in worldwide oil demand, negatively impacting the price we receive for our products and services, compressing the level of available funding under our FCB ABL Credit Facility, inhibiting our lenders from funding borrowings under our FCB ABL Credit Facility or resulting in our lenders reducing the borrowing base under our FCB ABL Credit Facility. Negative economic conditions could also adversely affect the collectability of our trade receivables or performance by our vendors and suppliers.
Tax legislation and administrative initiatives or challenges to our tax positions could adversely affect our results of operations and financial condition.
We operate or are registered in locations throughout the U.S. and Canada and, as a result, we are subject to the tax laws and regulations of U.S. federal, state and local and Canadian governments. From time to time, various legislative or administrative initiatives may be proposed that could adversely affect our tax positions. There can be no assurance that our tax provision or tax payments will not be adversely affected by these initiatives. In addition, U.S. federal, state and local, and international tax laws and regulations are extremely complex and subject to varying interpretations. There can be no assurance that our tax positions will not be challenged by relevant tax authorities or that we would be successful in any such challenge.
Risks Related to Environmental, Mining and Other Regulation
Federal, state and local legislative and regulatory initiatives relating to hydraulic fracturing and the potential for related litigation could result in increased costs, additional operating restrictions or delays for our customers, which could cause a decline in the demand for our frac sand and negatively impact our business, results of operations and financial condition.
We supply frac sand to hydraulic fracturing operators in the oil and natural gas industry. Hydraulic fracturing is an important practice that is used to stimulate production of oil and natural gas from low permeability hydrocarbon bearing subsurface rock formations. The hydraulic fracturing process involves the injection of water, proppants, and chemicals under pressure into the formation to fracture the surrounding rock, increase permeability and stimulate production.
Although we do not directly engage in hydraulic fracturing activities, our customers purchase our frac sand for use in their hydraulic fracturing activities. Hydraulic fracturing is typically regulated by state oil and natural gas commissions and similar agencies. Some states have adopted, and other states are considering adopting, regulations that could impose new or more stringent permitting, disclosure or well construction requirements on hydraulic fracturing operations. Aside from state laws, local land use restrictions may restrict drilling in general or hydraulic fracturing in particular. Municipalities may adopt local ordinances attempting to prohibit hydraulic fracturing altogether or, at a minimum, to allow such fracturing processes within their jurisdictions to proceed but regulating the time, place and manner of those processes. In addition, federal agencies have started to assert regulatory authority over the process and various studies have been conducted by the EPA, and other federal agencies concerning the potential environmental impacts of hydraulic fracturing activities. While President Trump has expressed a policy agenda supportive of our industry, at the same time, certain environmental groups have suggested that additional laws may be needed and, in some instances, have pursued voter ballot initiatives or litigation to more closely and uniformly limit or otherwise regulate the hydraulic fracturing process, and legislation has been proposed by some members of Congress to provide for such regulation.
The adoption of new laws or regulations at the federal, state or local levels imposing reporting obligations on, or otherwise limiting or delaying, the hydraulic fracturing process could make it more difficult to complete natural gas wells, increase our customers’ costs of compliance and doing business, and otherwise adversely affect the hydraulic fracturing services they perform, which could negatively impact demand for our frac sand. In addition, heightened political, regulatory, and public scrutiny of hydraulic fracturing practices could expose us or our customers to increased legal and regulatory proceedings, which could be time-consuming, costly, or result in substantial legal liability or significant reputational harm. We could be directly affected by adverse litigation involving us, or indirectly affected if the cost of compliance limits the ability of our customers to operate. Such costs and scrutiny could directly or indirectly, through reduced demand for our frac sand, have a material adverse effect on our business, financial condition and results of operations.
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Tariffs on goods and services between the United States, Canada and Mexico may be detrimental to our business.
Our sales into Canada and Mexico may become subject to retaliatory tariffs if the United States imposes tariffs on imports from Canada and Mexico into the United States. In recent years, the Company has expanded its sales to customers located in Canada and Mexico. If enacted, tariffs may significantly affect transactions with our customers and vendors located in Canada and Mexico. We expect that our customers would be responsible for the increased cost, which may result in customers sourcing their sand needs from other suppliers within their own countries. We depend on limited foreign vendors, but in the event of tariffs on goods entering the United States, we may face supply chain disruptions for certain purchases from suppliers in Canada and Mexico, which may lead to increased costs and delays, potentially affecting production timelines and profitability.
We and our customers are subject to extensive environmental and occupational health and safety regulations that impose, and will continue to impose, significant costs and liabilities. In addition, future regulations, or more stringent enforcement of existing regulations, could increase those costs and liabilities, which could adversely affect our results of operations.
We are subject to a variety of federal, state, and local regulatory environmental requirements affecting the mining and mineral processing industry, including among others, those relating to employee health and safety, environmental permitting and licensing, air and water emissions, water pollution, waste management, remediation of soil and groundwater contamination, land use, reclamation and restoration of properties, hazardous materials, and natural resources. Some environmental laws impose substantial penalties for noncompliance, and others, such as the federal CERCLA, may impose strict, retroactive, and joint and several liabilities for the remediation of releases of hazardous substances. Liability under CERCLA, or similar state and local laws, may be imposed as a result of conduct that was lawful at the time it occurred or for the conduct of, or conditions caused by, prior operators or other third parties. Failure to properly handle, transport, store, or dispose of hazardous materials or otherwise conduct our operations in compliance with environmental laws could expose us to liability for governmental penalties, cleanup costs, and civil or criminal liability associated with releases of such materials into the environment, damages to property, natural resources and other damages, as well as potentially impair our ability to conduct our operations. In addition, future environmental laws and regulations could restrict our ability to expand our facilities or extract our mineral deposits or could require us to acquire costly equipment or to incur other significant expenses in connection with our business. Future events, including adoption of new, or changes in any existing, environmental requirements (or their interpretation or enforcement) and the costs associated with complying with such requirements, could have a material adverse effect on us.
Any failure by us to comply with applicable environmental laws and regulations may cause governmental authorities to take actions that could adversely impact our operations and financial condition, including:
•issuance of administrative, civil, or criminal penalties;
•denial, modification, or revocation of permits or other authorizations;
•occurrence of delays in permitting or performance of projects;
•imposition of injunctive obligations or other limitations on our operations, including cessation of operations; and
•requirements to perform site investigatory, remedial, or other corrective actions.
Any such regulations could require us to modify existing permits or obtain new permits, implement additional pollution control technology, curtail operations, significantly increase our operating costs, or impose additional operating restrictions among our customers that reduce demand for our services.
We may not be able to comply with any new or amended laws and regulations that are adopted, and any new or amended laws and regulations could have a material adverse effect on our operating results by requiring us to modify our operations or equipment or shut down our facility. Additionally, our customers may not be able to comply with any new or amended laws and regulations, which could cause our customers to curtail or cease operations. We cannot at this time reasonably estimate our costs of compliance or the timing of any costs associated with any new or amended laws and regulations, or any material adverse effect that any new or modified standards will have on our customers and, consequently, on our operations.
Furthermore, the change in presidential administration is leading to shifts in the environmental regulatory landscape. While the impact of these changes on our operations is currently uncertain, initial executive orders and memoranda from the Trump Administration suggest such changes could influence future regulatory developments in our industry.
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Silica-related legislation, health issues and litigation could have a material adverse effect on our business, reputation or results of operations.
We are subject to laws and regulations relating to human exposure to crystalline silica. Several federal and state regulatory authorities, including MSHA, have changed and may continue to propose changes in their regulations regarding workplace exposure to crystalline silica, such as permissible exposure limits and required controls and personal protective equipment. Although the Trump Administration has indicated they plan to reconsider portions of MSHA’s 2024 rule and lower the standards for crystalline silica, the ultimate outcome of this rulemaking is uncertain. We may not be able to comply fully with the amended regulations that were adopted at the federal level, and any new or amended laws and regulations could have a material adverse effect on our operating results by requiring us to modify or cease our operations.
In addition, the inhalation of respirable crystalline silica is associated with the lung disease silicosis. There is evidence of an association between crystalline silica exposure or silicosis and lung cancer and a possible association with other diseases, including immune system disorders such as scleroderma. These health risks have been, and may continue to be, a significant issue confronting the sand industry. Concerns over silicosis and other potential adverse health effects, as well as concerns regarding potential liability from the use of sand, may have the effect of discouraging our customers’ use of our sand. The actual or perceived health risks of mining, processing and handling sand could materially and adversely affect sand producers, including us, through reduced use of sand, the threat of product liability or employee lawsuits, increased scrutiny by federal, state and local regulatory authorities of us and our customers or reduced financing sources available to the frac sand industry.
We are subject to the Federal Mine Safety and Health Act of 1977, which imposes stringent health and safety standards on numerous aspects of our operations.
Our operations are subject to the Federal Mine Safety and Health Act of 1977, as amended by the Mine Improvement and New Emergency Response Act of 2006, which imposes stringent health and safety standards on numerous aspects of mineral extraction and processing operations, including the training of personnel, operating procedures, operating equipment, and other matters. Our failure to comply with such standards, or changes in such standards or the interpretation or enforcement thereof, could have a material adverse effect on our business and financial condition or otherwise impose significant restrictions on our ability to conduct mineral extraction and processing operations.
We and our customers are subject to other extensive regulations, including licensing, plant and wildlife protection and reclamation regulation, that impose, and will continue to impose, significant costs and liabilities. In addition, future regulations, or more stringent enforcement of existing regulations, could increase those costs and liabilities, which could adversely affect our results of operations.
In addition to the regulatory matters described above, we and our customers are subject to extensive governmental regulation on matters such as permitting and licensing requirements, plant and wildlife protection, wetlands protection, reclamation and restoration activities at mining properties after mining is completed, the discharge of materials into the environment, and the effects that mining and hydraulic fracturing have on groundwater quality and availability. Our future success depends, among other things, on the quantity and quality of our frac sand deposits, our ability to extract these deposits profitably, and our customers being able to operate their businesses as they currently do.
In order to obtain permits and renewals of permits in the future, we may be required to prepare and present data to governmental authorities pertaining to the potential adverse impact that any proposed excavation or production activities, individually or in the aggregate, may have on the environment. Certain approval procedures may require preparation of archaeological surveys, endangered species studies, and other studies to assess the environmental impact of new sites or the expansion of existing sites. Compliance with these regulatory requirements is expensive and significantly lengthens the time needed to develop a site. Finally, obtaining or renewing required permits is sometimes delayed or prevented due to community opposition and other factors beyond our control. The denial of a permit essential to our operations or the imposition of conditions with which it is not practicable or feasible to comply could impair or prevent our ability to develop or expand a site. Significant opposition to a permit by neighboring property owners, members of the public, or other third parties, or delay in the environmental review and permitting process, also could delay or impair our ability to develop or expand a site. New legal requirements, including those related to the protection of the environment, could be adopted that could materially adversely affect our mining operations (including our ability to extract or the pace of extraction of mineral deposits), our cost structure, or our customers’ ability to use our sand. Such current or future regulations could have a material adverse effect on our business, and we may not be able to obtain or renew permits in the future.
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Our inability to acquire, maintain or renew financial assurances related to the reclamation and restoration of mining property could have a material adverse effect on our business, financial condition and results of operations.
We are generally obligated to restore property in accordance with regulatory standards and our approved reclamation plan after it has been mined. We are required under federal, state, and local laws to maintain financial assurances, such as surety bonds, to secure such obligations. The inability to acquire, maintain or renew such assurances, as required by federal, state, and local laws, could subject us to fines and penalties as well as the revocation of our operating permits. Such inability could result from a variety of factors, including:
•the lack of availability, higher expense, or unreasonable terms of such financial assurances;
•the ability of current and future financial assurance counterparties to increase required collateral; and
•the exercise by financial assurance counterparties of any rights to refuse to renew the financial assurance instruments.
Our inability to acquire, maintain, or renew necessary financial assurances related to the reclamation and restoration of mining property could have a material adverse effect on our business, financial condition, and results of operations.
Climate change could result in various risks for us and our customers.
In recent years, the U.S. Congress has considered legislation to reduce emissions of GHGs, including methane, a primary component of natural gas, and carbon dioxide, a byproduct of the burning of natural gas. It presently appears unlikely that comprehensive climate legislation will be passed by either house of Congress in the near future, although energy legislation and other regulatory initiatives are expected to be proposed that may be relevant to GHG emissions issues. For example, in August 2022, the U.S. Congress passed, and President Biden signed into law, the Inflation Reduction Act of 2022 which appropriates significant federal funding for renewable energy initiatives and, for the first time ever, imposes a fee on GHG emissions from certain facilities. While a March 2025 Congressional resolution disapproved the rule that the EPA adopted to implement the methane fee, the EPA is still required to collect such fees (though implementation has been postponed until reporting year 2034 under the OBBBA). The ultimate structure of such fee is currently uncertain, and it or similar financial measures may increase the operating costs of our customers and accelerate the transition away from fossil fuels, which could in turn adversely affect our business and results of operations.
In addition, a number of states are addressing GHG emissions, primarily through the development of emission inventories or regional GHG cap and trade programs. Depending on the particular program, we could be required to control GHG emissions or to purchase and surrender allowances for GHG emissions resulting from our operations. Independent of Congress, the EPA has adopted regulations controlling GHG emissions under its existing authority under the federal CAA. For example, the EPA has adopted regulations under existing provisions of the CAA that, among other things establish construction and operating permit reviews for GHG emissions from certain large stationary sources that are already potential major sources for conventional pollutants. In addition, the EPA has adopted rules requiring the monitoring and reporting of GHG emissions from specified production, processing, transmission and storage facilities in the United States on an annual basis. The EPA’s regulation of GHG emissions is predicated on a finding that GHG emissions present a danger to human health. The current administration announced in February 2026 that it will repeal the so-called endangerment finding. Various organizations have indicated an intention to challenge this decision. The ultimate outcome of such actions is uncertain, including the extent it may result in more stringent responses by other policymakers.
In addition, in December 2015, over 190 countries, including the United States, reached an agreement to reduce global GHG emissions, also known as the Paris Agreement. The Paris Agreement entered into force in November 2016 after more than 170 nations, including the United States, ratified or otherwise indicated their intent to be bound by the agreement. While President Trump has withdrawn the United States from the Paris Agreement effective January 2026, in addition to intitiating the withdrawal from the UNFCCC, this may animate stronger actions by various other policymakers. Additionally, several states and geographic regions in the United States have adopted legislation and regulations to reduce emissions of GHGs, including cap and trade regimes and commitments to contribute to meeting the goals of the Paris Agreement. It is not possible at this time to predict the precise timing and effects of climate change or whether additional climate-related legislation, regulations or other measures will be adopted at the local, state, regional, national and international levels.
To the extent that other countries implement the Paris Agreement or local, state, regional, national or international governments impose other climate change regulations on the oil and natural gas industry, it could have an adverse effect on our business because substantial limitations on GHG emissions could adversely affect demand for the oil and natural gas that is produced by our customers. Litigation risks are also increasing, as a number of entities, including government entities and private groups, have sought to bring suit against oil and natural gas companies in state or federal court, alleging, among other things, that such companies created public nuisances by producing fuels that contributed to climate change. Suits have also been
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brought against such companies under stockholder and consumer protection laws, alleging that companies have been aware of the adverse effects of climate change but failed to adequately disclose those impacts. To the extent these risks impact our customers, we may experience reduced demand for our proppant.
In addition, various policymakers, including the states of California, Illinois, and New York, have adopted or are considering adopting requirements for in-scope companies to disclose certain climate-related information, including on GHG emissions and climate risks. The SEC also previously finalized rules to mandate extensive disclosure of climate-related data, risks, GHG emissions, for certain public companies. However, these rules are stayed pending litigation before the Eighth Circuit. It is possible that other climate-related reporting regulations applicable to many U.S. companies will continue to take effect.
Additionally, climate change is expected to result in various physical risks to companies. For example, climate change is expected to increase the frequency and intensity of severe weather events and other natural disasters, as well as contribute to chronic changes (such as to meteorological and hydrological patterns) that may also result in various adverse impacts to our or our customers’ operations.
Finally, in addition to the executive orders discussed above, upon entering office, the Trump Administration issued a series of executive orders that signal a shift in the United States energy, environmental and climate change policy. Among other directives, such executive orders: (i) direct federal agencies to identify and exercise emergency authorities to facilitate conventional energy production, transportation and refining and call for the use of emergency regulations to expedite energy infrastructure projects; (ii) promote energy explorations and production on federal lands and waters; (iii) mandate a review of existing regulations that may burden domestic energy development; and (iv) pause disbursement of funds appropriated through the Inflation Reduction Act and Infrastructure Investment and Jobs Act. The long-term impact of such actions on our customers’ operations, if any, is difficult to predict at this time.
A negative shift in sentiment towards the oil and natural gas industry and increased attention to environmental, social and governance (“ESG”) and conservation matters may adversely impact our business.
An increase in attention to climate change, natural capital, human capital, and other ESG matters by various stakeholders, including consumer demand for alternative sources of energy, may result in increased costs, changes in demand for certain products or services, reputational harm, or other adverse impacts to our business. For example, various capital providers consider ESG matters (including ratings) in their investment and other decision-making, and there has been particular attention to capital provided to fossil fuel-related companies. Any decrease in the availability of capital to us or our customers may adversely impact our business. While we engage in certain voluntary initiatives (including disclosures) to improve our ESG profile and respond to stakeholder expectations, such initiatives entail costs and may not ultimately have the desired effect. For example, various initiatives rely on methodologies, standards, or data that are complex, still evolving, and subject to varying interpretations. Our approach to ESG matters also evolves over time, and there can be no guarantee that our approach will align with the expectations or preferences of any particular stakeholder. Stakeholder expectations are not uniform, and are sometimes conflicting. Certain policymakers have also adopted, or are considering adopting, requirements for companies to take certain actions or disclose certain information on ESG matters, particularly related to climate change. For more information, see our risk factor “Climate change legislation and regulatory initiatives could result in increased compliance costs for us and our customers.” However, as with other stakeholders, policymakers’ requirements are divergent and may be interpreted or applied unevenly, which may increase the cost and complexity of compliance, as well as any associated risks. Any failure to successfully navigate these stakeholder and policymaker expectations may result in various harms to our business, including through litigation or enforcement, operational impacts, damage to our reputation (including with our stakeholders or through various ratings), or otherwise. Our customers and various other stakeholders are subject to similar expectations, which may result in additional or augmented risks.
Risks Related to Ownership of Our Common Stock
Our stock price could be volatile, and you may not be able to resell shares of your common stock at or above the price you paid.
The stock markets generally have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our common stock. Volatility in the market price of our common stock may prevent you from being able to sell your common stock at or above the price at which you purchased the stock. As a result, you may suffer a loss on your investment. Securities class action litigation has often been instituted against companies following periods of volatility in the overall market and in the market
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price of a company’s securities. Such litigation, if instituted against us, could result in very substantial costs, divert our management’s attention and resources and harm our business, operating results and financial condition.
In addition to the risks described in this section, the market price of our common stock may fluctuate significantly in response to a number of factors, most of which we cannot control, including:
•our operating and financial performance;
•quarterly variations in the rate of growth of our financial indicators, such as revenues, net income, net income per share, EBITDA, Adjusted EBITDA, contribution margin, and free cash flow;
•the public reaction to our press releases, our other public announcements, and our filings with the SEC;
•strategic actions by our competitors;
•our failure to meet revenue or earnings estimates by research analysts or other investors;
•changes in revenue or earnings estimates, or changes in recommendations or withdrawal of research coverage, by equity research analysts;
•speculation in the press or investment community;
•the failure of research analysts to cover our common stock;
•sales of our common stock by us or our stockholders, or the perception that such sales may occur;
•changes in accounting principles, policies, guidance, interpretations, or standards;
•additions or departures of key management personnel;
•actions by our stockholders;
•general market conditions, including fluctuations in commodity prices, sand-based proppants, or industrial and recreational sand-based products;
•domestic and international economic, legal and regulatory factors unrelated to our performance; and
•the realization of any risks described under this “Risk Factors” section.
We are subject to certain requirements of Section 404 of the Sarbanes-Oxley Act. If we are unable to timely comply with Section 404 or if the costs related to compliance are significant, our profitability, stock price, results of operations and financial condition could be materially adversely affected.
We are required to comply with certain provisions of Section 404 of the Sarbanes-Oxley Act. Section 404 requires that we document and test our internal control over financial reporting and issue management’s assessment of our internal control over financial reporting. This section also requires that our independent registered public accounting firm opine on those internal controls upon our public float exceeding a certain threshold as set forth in the SEC rules. We are evaluating our existing controls against the standards adopted by the Committee of Sponsoring Organizations of the Treadway Commission. During the course of our ongoing evaluation and integration of the internal control over financial reporting, we may identify areas requiring improvement, and we may have to design enhanced processes and controls to address issues identified through this review.
We believe that the out-of-pocket costs, diversion of management’s attention from running the day-to-day operations and operational changes caused by the need to comply with the requirements of Section 404 of the Sarbanes-Oxley Act could be significant. If the time and costs associated with such compliance exceed our current expectations, our results of operations could be adversely affected.
If we fail to comply with the requirements of Section 404 or if we or our independent registered public accounting firm identify and report such material weaknesses, the accuracy and timeliness of the filing of our annual and quarterly reports may be materially adversely affected and could cause investors to lose confidence in our reported financial information, which could have a negative effect on the stock price of our common stock. In addition, a material weakness in the effectiveness of our internal control over financial reporting could result in an increased chance of fraud and the loss of customers, reduce our ability to obtain financing and require additional expenditures to comply with these requirements, each of which could have a material adverse effect on our business, results of operations and financial condition.
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The concentration of our capital stock ownership by our largest stockholders and its affiliates will limit your ability to influence corporate matters.
As of December 31, 2025, our Chief Executive Officer beneficially owns approximately 18.2% of our outstanding common stock. Consequently, our Chief Executive Officer is considered a (“Principal Stockholder”) and will continue to have significant influence over all matters that require approval by our stockholders, including the election of directors and approval of significant corporate transactions. Additionally, we are party to a stockholders’ agreement pursuant to which, so long as the Principal Stockholder maintains certain beneficial ownership levels of our common stock, the Principal Stockholder will have certain rights, including board of directors and committee designation rights and consent rights, including the right to consent to change in control transactions. For additional information, please read “Certain Relationships and Related Party Transactions—Stockholders Agreement” in the prospectus included in our Registration Statement on Form S-1 (Registration No. 333-215554), initially filed with the SEC on January 13, 2017. This concentration of ownership and the rights of Principal Stockholders under the stockholders agreement, will limit your ability to influence corporate matters, and as a result, actions may be taken that you may not view as beneficial.
The price of our common stock may fluctuate significantly, and you could lose all or part of your investment.
As of December 31, 2025, there were 27,677,660 publicly traded shares of common stock held by our public common stockholders. Although our common stock is listed on the NASDAQ, we do not know whether an active trading market will continue to develop or how liquid that market might be. You may not be able to resell your common stock at or above the public offering price. Additionally, the lack of liquidity may result in wide bid-ask spreads, contribute to significant fluctuations in the market price of the common stock and limit the number of investors who are able to buy the common stock.
If securities or industry analysts do not publish research or reports or publish unfavorable research about our business, the price and trading volume of our common stock could decline.
The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us or our business. If analysts who cover us downgrade our securities, the price of our securities would likely decline. If analysts ceases to cover us or fails to publish regular reports on us, interest in the purchase of our securities could decrease, which could cause the price of our common stock and other securities and their trading volume to decline.
Our amended and restated certificate of incorporation and amended and restated bylaws, as well as Delaware law, contain provisions that could discourage acquisition bids or merger proposals, which may adversely affect the market price of our common stock.
Our amended and restated certificate of incorporation authorizes our board of directors to issue preferred stock without stockholder approval. If our board of directors elects to issue preferred stock, it could be more difficult for a third party to acquire us. In addition, some provisions of our amended and restated certificate of incorporation and amended and restated bylaws could make it more difficult for a third party to acquire control of us, even if the change of control would be beneficial to our stockholders, including:
•advance notice provisions for stockholder proposals and nominations for elections to the board of directors to be acted upon at meetings of stockholders;
•provisions that divide our board of directors into three classes of directors, with the classes to be as nearly equal in number as possible;
•provisions that prohibit stockholder action by written consent after the date on which our Principal Stockholders collectively cease to beneficially own at least 50% of the voting power of the outstanding shares of our stock entitled to vote;
•provisions that provide that special meetings of stockholders may be called only by the board of directors or, for so long as a Principal Stockholder continues to beneficially own at least 20% of the voting power of the outstanding shares of our stock;
•provisions that provide that our stockholders may only amend our certificate of incorporation or bylaws with the approval of at least 66 2/3% of the voting power of the outstanding shares of our stock entitled to vote, or for so long as our Principal Stockholders collectively continue to beneficially own at least 50% of the voting power of the outstanding shares of our stock entitled to vote, with the approval of a majority of the voting power of the outstanding shares of our stock entitled to vote;
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•provisions that provide that the board of directors is expressly authorized to adopt, or to alter or repeal our bylaws; and
•provisions that establish advance notice and certain information requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings.
We cannot guarantee the timing, amount, or payment of dividends on our common stock or the repurchase of our common stock.
Although we paid dividends in 2024 and 2025 and repurchased shares of our common stock in 2025, the timing, declaration, amount and payment of future dividends to stockholders or share repurchases will fall within the discretion of our board of directors. The board’s decisions regarding the payment of dividends or share repurchases will depend on many factors, such as our financial condition, earnings, capital requirements, restrictions in the FCB ABL Credit Facility, industry practice, legal requirements, regulatory constraints and other factors that the board deems relevant. Our ability to pay dividends and repurchase shares under our share repurchase program will depend on our ongoing ability to generate cash from operations and access capital markets. We cannot guarantee that we will pay any dividends or make any repurchases of our common stock in the future.
Future sales of our common stock in the public market could reduce our stock price, and the sale or issuance of equity or convertible securities may dilute your ownership in us.
We may sell additional shares of common stock in subsequent public offerings. We may also issue additional shares of common stock or convertible securities. As of December 31, 2025, we have outstanding 43,524,176 shares of common stock. Our Chief Executive Officer beneficially owns 7,916,663 shares of our common stock, or approximately 18.2% of our total outstanding shares.
In connection with our initial public offering, we filed a registration statement with the SEC on Form S-8 providing for the registration of shares of our common stock issued or reserved for issuance under our equity incentive plans. Subject to the satisfaction of vesting conditions and the requirements of Rule 144, shares registered under the registration statement on Form S-8 will be available for resale immediately in the public market without restriction.
We have provided certain registration rights for the sale of common stock by certain existing stockholders in the future. The sale of these shares could have an adverse impact on the price of our common stock or on any trading market that may develop.
We cannot predict the size of future issuances of our common stock or securities convertible into common stock or the effect, if any, that future issuances and sales of shares of our common stock will have on the market price of our common stock. Sales of substantial amounts of our common stock (including shares issued in connection with an acquisition), or the perception that such sales could occur, may adversely affect prevailing market prices of our common stock.
We may issue preferred stock whose terms could adversely affect the voting power or value of our common stock.
Our amended and restated certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designations, preferences, limitations and relative rights, including preferences over our common stock respecting dividends and distributions, as our board of directors may determine. The terms of one or more classes or series of preferred stock could adversely impact the voting power or value of our common stock. For example, we might grant holders of preferred stock the right to elect some number of our directors in all events or on the happening of specified events or the right to veto specified transactions. Similarly, the repurchase or redemption rights or liquidation preferences we might assign to holders of preferred stock could affect the residual value of the common stock.
Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.
Our amended and restated certificate of incorporation provides that unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law (the “DGCL”), our amended and restated certificate of incorporation or our bylaws, or (iv) any action asserting a claim against us that is governed by the internal affairs doctrine, in each such case subject to such Court of Chancery having personal jurisdiction over the indispensable parties
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named as defendants therein. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have notice of, and consented to, the provisions of our amended and restated certificate of incorporation described in the preceding sentence. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, employees or agents, which may discourage such lawsuits against us and such persons. Alternatively, if a court were to find these provisions of our amended and restated certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition or results of operations.
ITEM 1B. — UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. — CYBERSECURITY
Our cybersecurity risk management program is integrated into our overall risk management program, and shares common methodologies, reporting channels and governance processes that apply across the risk management program to other legal, compliance, strategic, operational, and financial risk areas.
To protect our technology systems from cybersecurity threats, we conduct security risk assessments and use various security tools designed to help prevent, identify, escalate, investigate, resolve, and recover from identified vulnerabilities and security incidents in a timely manner. These include, but are not limited to, internal reporting, monitoring, and detection tools designed to assist us in identifying vulnerabilities in our products before they are exploited by malicious threat actors. We use external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes. We have a third-party risk management process for key service providers based on our assessment of their criticality to our operations and respective risk profile.
Our Incident Response Plan defines and documents procedures for assessing, identifying, and managing a cybersecurity incident. In the event there is a cyber security incident, the designated IT personnel and the Incident Response Team are expected to assess the cybersecurity incident’s impact as the basis for assigning a preliminary severity level. Designated IT personnel are also responsible for communicating incidents to other members of management as they deem appropriate.
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We have not identified risks from known cybersecurity threats, including as a result of any unauthorized access to customer, vendor, supplier, joint venture, employee or our data occurred as a result of cybersecurity incidents against us that have materially affected us, including our operations, business strategy, results of operations, or consolidated financial condition. We face risks from cybersecurity threats that, if realized, could have a material adverse effect on our business, operations, or consolidated financial condition. See additional information about our cybersecurity risks under "Risk Factors—Risks Inherent in Our Business—We and our third-party providers may be subject to cybersecurity risks, cyberattacks, and other interruptions or failures in our information technology systems.”
ITEM 2. — PROPERTIES
Overview of our Properties and Logistics
As of December 31, 2025, we owned and operated three frac sand mines and related processing facilities in Oakdale, Wisconsin; Ottawa, Illinois; and Blair, Wisconsin. Also, in addition to the onsite transloading capabilities at our Oakdale and Blair mines, we own nearby transloading facilities in Byron, Wisconsin and Peru, Illinois. We also operate in-basin transloading facilities under long-term lease agreements in Van Hook, North Dakota, Waynesburg, Pennsylvania, and El Reno, Oklahoma. In December 2023, we acquired the rights to operate a unit train capable transloading terminal in Minerva, Ohio. In January 2024, we acquired the rights to operate a unit train capable transloading terminal in Dennison, Ohio. Both Ohio terminals became operational in 2024.
In addition to these currently operating facilities, we also own an idled mine and processing facility in New Auburn, Wisconsin, which contains a higher concentration of coarser sand deposits. We do not consider this site to be a mining property as we have no immediate plans to resume processing frac sand operations at this facility.
We also own approximately 959 acres in Jackson County, Wisconsin (“Hixton”). The Hixton site is fully permitted to initiate operations and is available for future development. Based on our preliminary testing, we believe there are sufficient quantities on these sites to establish reserves in the future. We have no immediate plans to further develop this site.
We have two long-term surface mining leases for properties located in the Permian Basin in Texas that are available for future development. The first site consists of 1,772 acres in Winkler County, Texas. This location is adjacent to the Texas & New Mexico Railway (TXN) short line with direct access to State Highway 18. The second site consists of 2,447 acres in Crane County, Texas. This location has direct access to Interstate Highway 20. Based on our preliminary testing, we believe there are sufficient quantities on these sites to establish reserves in the future. We have no immediate plans to further develop these sites.
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The map below shows the locations of our mine sites, rail terminals and transload facilities, manufacturing facilities and administrative facilities.
Summary Overview of Mining Operations
Information concerning our material mining properties in this Annual Report on Form 10-K has been prepared in accordance with the requirements of subpart 1300 of Regulation S-K, which first became applicable to us for the fiscal year ended December 31, 2021. As used in this Annual Report on Form 10-K, the terms “mineral resource”, “mineral reserve”, “proven mineral reserve” and “probable mineral reserve” are defined and used in accordance with subpart 1300 of Regulation S-K. As of December 31, 2025, our individually material mining properties, as determined in accordance with subpart 1300 of Regulation S-K, were the Oakdale, Wisconsin mine and processing facility (“Oakdale”), Ottawa, Illinois mine and processing facility (“Ottawa”), and the Blair, Wisconsin mine and processing facility (“Blair”).
The information that follows related to the Oakdale, Ottawa and Blair facilities is derived, for the most part from, and in some instances is an extract from, the technical report summaries (“TRSs”) related to such properties prepared in compliance with the Item 601(b)(96) and subpart 1300 of Regulation S-K. Portions of the following information are based on assumptions, qualifications and procedures that are not fully described herein. Reference should be made to the full text of the TRSs, filed as exhibits to this Annual Report on 10-K.
Our premium sand is used as proppant to enhance hydrocarbon recovery rates in the hydraulic fracturing of oil and natural gas wells and for a variety of industrial applications, including glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail, and recreation. As of December 31, 2025, we had three operating mines and related processing facilities.
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Oakdale, Wisconsin
We operate a surface mine and silica sand processing plant near Oakdale, Wisconsin. The Oakdale mine includes a total of 1,256 acres that are owned outright by us. This ownership includes subsurface mineral and water rights. We are not a lessor to any portion of this property. Royalties are paid in the amount of $0.50 per ton of 70-mesh and coarser substrate.
Our Oakdale facility is a surface mining operation involving heavy equipment and the hydraulic transfer of material to the processing plant. The processing plant uses natural gas, propane, and electricity to produce various grades of high-quality Northern White Sand.
The Oakdale facility operations are predominantly regulated by Monroe County, Wisconsin through the non-metallic mining and reclamation permit. Air emissions are regulated by the Wisconsin Department of Natural Resources, Bureau of Air Management. All required permits have been secured, and the associated conditions are consistent with those customarily imposed for permits of this nature, including maximum emissions thresholds, bonding requirements, and similar obligations.
Ottawa, Illinois
We operate a surface mine and a silica sand processing plant near Ottawa, Illinois. The Ottawa mine includes a total of 819 acres that are owned outright by us. This ownership includes subsurface mineral and water rights. We are not a lessor to any portion of this property. There are no royalties associated with this property.
Our Ottawa facility is a surface mining operation involving heavy equipment and the hydraulic transfer of material to the processing plant. The processing plant uses natural gas, propane, and electricity to produce various grades of high-quality Northern White Sand.
The Ottawa facility is regulated by the Illinois Department of Natural Resources, which requires a Surface Mining Permit and Reclamation Plan. The mine reclamation plan is submitted to both the LaSalle County, Illinois and Village of Utica, Illinois Boards. Air emissions are regulated by the Illinois Environmental Protection Agency. All required permits have been secured, and the associated conditions are consistent with those customarily imposed for permits of this nature, including maximum emissions thresholds, bonding requirements, and similar obligations.
Blair, Wisconsin
We began operating the Blair mine in the second quarter of 2023. The Blair mine includes a total of 1,285 acres that are owned outright by us. This ownership includes subsurface mineral and water rights. The site has no leased property. Royalties are paid on certain grades of silica sand in the estimated amount of $1.70/ton with certain minimum annual payments.
Our Blair facility uses a surface mining technique to produce high-quality Northern White Sand. The processing plant uses natural gas, propane, and electricity to make various grades of high-quality Northern White Sand.
The Blair facility has several active permits including air quality, construction, operations, groundwater extraction, and non-metallic mining and reclamation, which are administered by the Wisconsin Department of Natural Resources. Land use agreements are active for the Cities of Springfield and Preston regarding the hours of operations, blasting, groundwater assurance, noise and traffic. Conditional use permits are active for both Jackson County, Wisconsin and the City of Blair, Wisconsin for the mining and processing of material at the site Blair site. All required permits have been secured, and the associated conditions are consistent with those customarily imposed for permits of this nature, including maximum emissions thresholds, bonding requirements, and similar obligations.
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Summary of Annual Production
The table below shows annual dry tons produced at our mining properties for the years ended December 31, 2025, 2024 and 2023.
| 2025 | 2024 | 2023 | |||||||||||||||
| (millions of tons) | |||||||||||||||||
| Silica Sand | |||||||||||||||||
| Oakdale mine | 5.0 | 4.9 | 4.6 | ||||||||||||||
| Ottawa mine | 0.7 | 0.6 | 0.9 | ||||||||||||||
| Blair mine | 1.6 | 1.7 | 0.6 | ||||||||||||||
| 7.3 | 7.2 | 6.1 | |||||||||||||||
Summary of Mineral Reserves and Resources
Supplies of high-quality Northern White frac sand are limited to select areas, predominantly in western Wisconsin and limited areas of Minnesota, Illinois and Missouri. All of our sand mines are located in this geographic area. The following table summarizes our mineral reserves as of December 31, 2025:
| Total Saleable Reserves | Proven Reserves | Probable Reserves | |||||||||||||||
| (millions of tons) | |||||||||||||||||
| Silica Sand | |||||||||||||||||
Oakdale mine (1) | 228 | 125 | 103 | ||||||||||||||
Ottawa mine (2) | 125 | 94 | 31 | ||||||||||||||
Blair mine (3) | 109 | 109 | 0 | ||||||||||||||
| Total Reserves | 462 | 328 | 134 | ||||||||||||||
(1)Economic evaluation for Oakdale is based on $23.08/ton average minegate pricing as of December 31, 2025, with no escalation.
(2)Economic evaluation for Ottawa is based on $24.71/ton average minegate pricing as of December 31, 2025, with no escalation.
(3)Economic evaluation for Blair is based on $24.96/ton average minegate pricing, as of December 31, 2025, with no escalation.
We have no inferred resources.
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Material Mine Site Descriptions
Oakdale, Wisconsin
The Oakdale site is a surface proppant sand mining and processing operation located approximately 1 mile southwest of the town of Oakdale, Wisconsin in Monroe County, Wisconsin. Geographically, the Oakdale site is located at approximately 43° 57’06.1” N latitude and 90° 24’13.0” W longitude.
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The Oakdale site includes approximately 1,256 acres that we own outright. Royalties are paid in the amount of $0.50 per ton of 70-mesh and coarser substrate. Operations began at our Oakdale site in July 2012 with 1.1 million tons of annual processing capacity. Through multiple expansions, the Oakdale facility currently has an annual processing capacity of 5.5 million tons.
The site is accessible by public roads and a Canadian Pacific railroad spur. Our Oakdale site has an extensive railcar loading, storage, and handling facility. The Oakdale site is connected to the local electrical and natural gas distribution systems. All water onsite is provided through private wells and ponds supplied with recycled process water and groundwater pumped from the active mine. The site has offices holding administrative, engineering, and operations staff. In addition, there are several buildings that house the processing facilities, plant maintenance and support facilities.
We acquired the land and developed the site as a purpose-built silica mine to serve frac sand customers. Since acquiring the facility, we renovated and upgraded its processing capabilities to enable it to produce multiple products through various processing methods, including washing, hydraulic sizing and screening. These techniques allow the Oakdale site to meet a variety of focused specifications on product composition from customers. The Oakdale site services primarily oil and gas markets with the ability to service additional markets such as glass, building products, foundry, fillers and extenders and chemicals. We believe that the Oakdale facility and its operating equipment are maintained in good working condition. The total net book value of the Oakdale facility’s real property and tangible assets as of December 31, 2025 was $95.8 million.
Current mining at the Oakdale facility is excavated using conventional surface mining methods. The first step in the mining process is the removal of the overburden from the sandstone layer. This is completed either in-house or by third-party contractors using heavy equipment including excavators, dozers and haul trucks. Next, a third-party contractor is used to drill and blast the sandstone. Heavy equipment, conveyors, hydraulic monitors and pumps are used to transfer the blasted material to the processing plant. At the processing plant, the sand slurry is fed to a surge tank where ultrafine material is removed from the product then pumped to hydrosizers that further separate the sand into coarse and fine particle size fractions. The separated streams are either placed in respective piles, stored on a dewatering slab, or sent to waste depending on product mix desired. The decanted sand is then fed by conveyor or loader to the five available fluidized bed dryers. The dry sand is then classified into final grades using screening units and stored in dedicated silos. A system of conveyors then move sand to a loadout for railcars and trucks. Railcars are on a railspur connected to the Canadian Pacific railroad. Trucking to our Byron transload facility provides access to the Union Pacific railroad.
Several natural and man-made features have been identified in and around the Oakdale site which may limit the mineable areas of the property. These features include setbacks from neighboring properties, right of ways, creeks and wetlands.
To operate active mining operations on the property, the Monroe County, Wisconsin non-metallic reclamation permit requires annual reports to be submitted with information on the reclamation status and to pay annual fees based on disturbed acres. A significant portion of the probable reserves underly current wetland areas. These areas will require mitigation as designated wetlands prior to mining. These reserves are not in our current five-year plan. Air emissions are regulated by the Wisconsin Department of Natural Resources, Bureau of Air Management. We monitor air emissions and have all required permits. The operation also has developed an Environmental Management System and Quality Management System. We have successfully completed the annual outside surveillance audit of our Environmental Management System to the ISO 14001:2015. The Oakdale site has secured necessary permits, which have conditions commonly associated with such permits; the site has experienced no violations or fines that would be viewed as a significant encumbrance.
A summary of Oakdale’s mineral resources and reserves as of December 31, 2025 and 2024 is shown below.
| Year Ended December 31, | Change | ||||||||||||||||||||||
| 2025 | 2024 | Volumes | Percentage | ||||||||||||||||||||
| (millions of tons) | |||||||||||||||||||||||
| Proven | 125 | 133 | -8 | (6) | % | ||||||||||||||||||
| Probable | 103 | 105 | -2 | (2) | % | ||||||||||||||||||
| Saleable | 228 | 238 | -10 | (4) | % | ||||||||||||||||||
When estimating mineral reserves, silica product pricing was assumed at $23.08/ton. Only one commodity (silica sand) is mined, processed and sold at the Oakdale site. Production of silica sand is driven by market demand, and production can be modified in response to that demand. As such, the application of minimum mining thicknesses, maximum stripping ratios (the ratio of waste to sand excavated), or cut-off grades is not generally considered in the estimation of silica sand resources for the Oakdale site. The decrease in reserves from 2024 to 2025 is primarily attributable to excavation and mining activity in 2025 and revision due to updated surface topography and refinement of reserve boundaries from our previous report. For more information on our resources and reserves, please refer to Exhibit 10.11, the Technical Report Summary for our Oakdale site.
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Key assumptions and parameters relating to the mineral reserves at the Oakdale site are discussed in Sections 11.0 and 12.0, respectively, of the Oakdale TRS. Only material that can be economically, safely, and legally extracted is contained in these reserve estimates.
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Ottawa, Illinois
The Ottawa site is a surface proppant sand mining and processing operation located approximately three miles east of the town of Ottawa, Illinois in LaSalle County, Illinois. Geographically, the Ottawa site is located at approximately 41° 20’48.6” N latitude and 88° 57’18.9” W longitude.
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The Ottawa site includes approximately 819 acres that we own outright. The mine site was initially developed in 2014 by Eagle Materials Inc., a Delaware corporation (“Eagle”), as a wash plant that railed wet sand to Corpus Christi, TX. In the summer of 2018, a 1.6 million ton per year dry plant was constructed on site. In September 2020, we acquired the Ottawa Site from Eagle. We began operating the Ottawa, Illinois mine and Peru, Illinois transload facility in October 2020. There are no royalties associated with any minerals at this site. The current annual processing capacity is estimated at 1.6 million tons.
The site is accessible by public roads. There is no rail onsite. All minerals are trucked from the site to a terminal that we own and operate in Peru, Illinois, on the Burlington Northern Santa Fe railroad a few miles away from the mine site. Our Ottawa site includes a wet plant and a dry plant, storage, and handling facility. The Ottawa site is connected to the local electrical and natural gas distribution systems. Water onsite is provided through public works, private wells and ponds supplied with recycled process water and groundwater pumped from the active mine. The site has offices holding administrative, engineering, and operations staff. In addition, there are several buildings that house the processing facilities, plant maintenance and support facilities.
Ottawa production capabilities include ability to produce multiple products through various processing methods, including washing, hydraulic sizing and screening. These production techniques allow the Ottawa site to meet a variety of focused specifications on product composition from customers. As such, the Ottawa site services multiple end markets, such as glass, building products, foundry, fillers and extenders, chemicals and oil and gas proppants. We believe that the Ottawa facility and its operating equipment are maintained in good working condition. The total net book value of the Ottawa facility and related transload real property and tangible assets as of December 31, 2025 was $38.9 million.
Current mining at the Ottawa facility is excavated using conventional surface mining methods. The first step in the mining process is the removal of the overburden from the sandstone layer. This is completed either in-house or by third-party contractors using heavy equipment including excavators, dozers and haul trucks. Next, a third-party contractor is used to drill and blast the sandstone. Heavy equipment is used to transfer the blasted material to the processing plant. At the processing plant, the sand is fed into a crusher, wet screened to remove oversize material and placed in a surge tank where ultra fine material is removed from the product and sent to a thickener as waste. The remaining slurry is pumped to hydrosizers that further hydraulically separate the sand into waste and product streams with the product sent to an enclosed decant shed for dewatering. A drag chain conveyor reclaims sand from the top of the decant pile and conveys the sand to the dryer. Dry sand is then screened into our four primary grades of sand. The finished product is stored in four truck loadout silos. All product leaves the plant via truck. The majority of the product is trucked to a nearby Peru, Illinois rail loadout on the Burlington Northern Santa Fe railroad.
To operate active mining operations on the property, the Illinois Department of Natural Resources requires a Surface Mining Permit. The Surface Mining Permit application requires the operator to submit an annual operating plan that illustrates how the land will be affected by mining operations as well as a reclamation plant that describes how the mined land will be restored for future use. The mine reclamation plan is submitted to the LaSalle County and Village of Utica Boards. The Ottawa operation has obtained the necessary permits. Air emissions are regulated by the Illinois Environmental Protection Agency. We have been issued a Title V permit for air emissions. We monitor air emissions and have secured required permits, which have conditions commonly associated with such permits; the site has experienced no violations or fines that would be viewed as a significant encumbrance.
A summary of Ottawa’s mineral resources and reserves as of December 31, 2025 and 2024 is shown below.
| Year Ended December 31, | Change | ||||||||||||||||||||||
| 2025 | 2024 | Volumes | Percentage | ||||||||||||||||||||
| (millions of tons) | |||||||||||||||||||||||
| Proven | 94 | 94 | 0 | — | % | ||||||||||||||||||
| Probable | 31 | 32 | -1 | (3) | % | ||||||||||||||||||
| Saleable | 125 | 126 | -1 | (1) | % | ||||||||||||||||||
When estimating mineral reserves, silica product pricing was assumed at $24.71/ton. Only one commodity (silica sand) is mined, processed and sold at the Ottawa site. Production of silica sand is driven by market demand, and production can be modified in response to that demand. As such, the application of minimum mining thicknesses, maximum stripping ratios (the ratio of waste to sand excavated), or cut-off grades is not generally considered in the estimation of silica sand resources for the Ottawa site. The decrease in reserves from 2024 to 2025 is primarily attributable to excavation and mining activity in 2025 and revision due to updated surface topography and refinement of reserve boundaries from our previous report. For more information on our resources and reserves, please refer to Exhibit 10.12, the Technical Report Summary for our Ottawa mine.
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Key assumptions and parameters relating to the mineral reserves at the Ottawa site are discussed in Sections 11.0 and 12.0, respectively, of the Ottawa TRS. Only material that can be economically, safely, and legally extracted is contained in these ore reserve estimates.
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Blair, Wisconsin
The Blair site is a surface proppant sand mining and processing operation located approximately 3 miles southwest of the town of Taylor, Wisconsin in Trempealeau and Jackson Counties, Wisconsin. Geographically, the Blair site is located at approximately 44° 17’44.0” N latitude and 91° 10’05.5” W longitude.
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The Blair site includes approximately 1,285 acres that we own outright. The mine site was initially developed in 2016 by Hi-Crush Inc., (“HCR”) and shut down in 2020 due to the COVID-19 pandemic. On March 4, 2022, we acquired the Blair facility. We began operations at the Blair facility in the second quarter of 2023. The Blair facility has approximately 2.9 million tons of total annual processing capacity and contains an onsite, unit train capable rail terminal with access to the Class 1 Canadian National Railway. We pay royalties of approximately $1.70 per ton with certain annual minimum payments.
The site is accessible by public roads and the Canadian National railroad spur. Our Blair site has an extensive railcar loading, storage, and handling facility. The Blair site is connected to the local electrical and natural gas distribution systems. All water onsite is provided through private wells. The site has offices holding administrative, engineering, and operations staff. In addition, there are several buildings that house the processing facilities, plant maintenance and support facilities.
Blair production capabilities include ability to produce multiple products through various processing methods, including washing, hydraulic sizing and screening. These production techniques allow the Blair site to meet a variety of focused specifications on product composition from customers. The Blair site services primarily oil and gas markets with the ability to service additional markets such as glass, building products, foundry, fillers and extenders and chemicals. We believe that the Blair facility and its operations have been maintained in good condition. The total net book value of the Blair facility real property and tangible assets as of December 31, 2025 was $20.6 million.
We began operating the Blair facility in the second quarter of 2023. Current mining at the Blair facility is excavated using conventional surface mining methods. The first step in the mining process is the removal of the overburden from the sandstone layer. This is completed either in-house or by third-party contractors using heavy equipment including excavators, dozers and haul trucks. Next, a third-party contractor is used to drill and blast the sandstone. Heavy equipment is used to transfer the blasted material to the crusher for further processing. Conveyors transfer the sand to the wet plant where hydrosizers are used to sort the sand into product and waste streams. The waste stream is further separated by a cyclone where the ultra fines are sent to a thickener and filter press to recover water and the remainder is conveyed to a pile for reclamation purposes. The product stream is dewatered and conveyed to the wet storage piles next to the dry plant. Loaders will feed the two dryers from the decant pile and will screen the sand into four or five grades that are then stored into dedicated silos until loaded into railcars for shipping. Railcars are on a railspur connected to the Canadian National railroad.
To operate active mining operations on the property, a non-metallic mining industrial permit is in place and administered by the Wisconsin Department of Natural Resources in both Jackson and Trempealeau counties. There are also permits for air quality, construction, ground water extraction administered by the Wisconsin Department of Natural Resources. A land use agreement is active for the cities of Springfield and Preston regarding operating hours. A conditional use permit is active for both Jackson County and the City of Blair for the mining and processing of material at the Blair site. A reclamation plan for restoring the site to an agreed upon state is in place with Jackson County and the City of Blair. The Blair site has secured necessary permits, which have conditions commonly associated with such permits; the site has experienced no violations or fines that would be viewed as a significant encumbrance.
A summary of Blair’s mineral resources and reserves as of December 31, 2025 and 2024 is shown below.
| Year Ended December 31, | Change | ||||||||||||||||||||||
| 2025 | 2024 | Volumes | Percentage | ||||||||||||||||||||
| (millions of tons) | |||||||||||||||||||||||
| Proven | 109 | 112 | -3 | (3) | % | ||||||||||||||||||
| Probable | 0 | 0 | 0 | Not Meaningful | |||||||||||||||||||
| Saleable | 109 | 112 | -3 | (3) | % | ||||||||||||||||||
When estimating mineral reserves, silica product pricing was assumed at $24.96/ton. Only one commodity (silica sand) is mined, processed and sold at the Blair site. Production of silica sand is driven by market demand, and production can be modified in response to that demand. As such, the application of minimum mining thicknesses, maximum stripping ratios (the ratio of waste to sand excavated), or cut-off grades is not generally considered in the estimation of silica sand resources for the Blair site. The decrease in reserves from 2024 to 2025 is primarily attributable to excavation and mining activity in 2025 and revision due to updated surface topography and refinement of reserve boundaries from our previous report. For more information on our resources and reserves, please refer to Exhibit 10.13, the Technical Report Summary for our Blair site.
Key assumptions and parameters relating to the mineral reserves at the Blair site are discussed in Sections 11.0 and 12.0, respectively, of the Blair TRS. Only material that can be economically, safely, and legally extracted is contained in these ore reserve estimates.
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Internal Controls Disclosure
The current year reported reserves have taken the previously reported amounts and subtracted excavation and mining activity to deduce the 2025 reserves and revised to update for changes in surface topography and reserve boundaries. Economic considerations and mining operation discussion have been updated to reflect current results and forward-looking budgets.
Modelling and analysis of our reserves has been developed by our personnel, reviewed by several levels of internal management and, in the case of the three material properties, reviewed by John T. Boyd as the qualified person. John T. Boyd is an independent geological consultant that is not affiliated with Smart Sand or any other entity with an ownership, royalty, or other interest in the property subject of the TRS reports. This section summarizes the internal control considerations for our development of estimations, including assumptions, used in resource and reserve analysis and modeling.
When determining resources and reserves, as well as the differences between resources and reserves, management developed specific criteria, each of which must be met to qualify as a resource or reserve, respectively. These criteria, such as demonstration of economic viability, repeatable geologic continuity, and meeting generally accepted quality specifications, are specific and attainable, as applicable. Calculations using site specific criteria for the three material properties were reviewed by John T. Boyd. John T. Boyd was provided with our exploration data, geologic models, and volumetric estimates and took a three-step approach to validate our resource and reserve estimates at the four material properties: (1) verified the accuracy of geologic model inputs by comparison with drilling logs and laboratory reports, (2) compared the geologic model with compiled drilling data and (3) prepared a stratigraphic grid model of the geologic unit and independently estimated volumes. All calculations were conducted independently by John T. Boyd, then compared to our internal estimates and found to be within acceptable variance. A detailed description of the methodology used to calculate mineral reserves for the three material properties is provided in the TRSs filed as exhibits to this Annual Report.
For all properties, geographical modeling and mine planning efforts serve as a base assumption for resource and reserve estimates at each location. These outputs have been prepared by both our personnel and third-party consultants, and the methodology is compared to industry best practices. Mine planning decisions, such as mining bench height, execution of mining processes and ground control, are determined and agreed upon by our management. Management adjusts forward-looking models by reference to historic mining results, including reviewing performance versus predicted levels of production from the mineral deposit, and if necessary, reevaluating mining methodologies if production outcomes were not realized as predicted. Ongoing mining and investigation of the mineral deposit, coupled with product quality validation pursuant to industry best practices and customer expectations, provides further empirical evidence as to the homogeneity, continuity and characteristics of the mineral resource. Ongoing quality validation of production also provides a means to monitor for any potential changes in mineral quality.
Management also assesses risks inherent in mineral resource and reserve estimates, such as the accuracy of geological data that is used to support mine planning, identify hazards and inform operations of the presence of mineable deposits. Also, management is aware of risks associated with potential gaps in assessing the completeness of mineral extraction licenses, entitlements or rights, or changes in laws or regulations that could directly impact the ability to assess mineral resources and reserves or impact production levels. Risks inherent in overestimated reserves can impact financial performance when revealed, such as changes in amortization that are based on life of mine estimates.
Based on their review of our cost structure and their extensive experience with similar operations, John T. Boyd concluded that it is reasonable to assume that we will operate under a similar cost structure over the remaining life of our reserves. John T. Boyd further assumed that if our revenue per ton remained relatively constant over the life of the reserves, our current operating margins are sufficient to expect continued profitability throughout the life of our reserves.
ITEM 3. — LEGAL PROCEEDINGS
From time to time we may be involved in litigation relating to claims arising out of our operations in the normal course of business. The disclosure called for by Part I, Item 3 regarding our legal proceedings is incorporated by reference herein from Part II, Item 8. Note 16 - Commitments and Contingencies - Litigation of the notes to the consolidated financial statements in this Form 10-K for the year ended December 31, 2025.
ITEM 4. — MINE SAFETY DISCLOSURES
We are committed to maintaining a culture that prioritizes mine safety. We believe that our commitment to safety, the environment and the communities in which we operate is critical to the success of our business. Our sand mining operations are
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subject to mining safety regulation. The U.S. Mining Safety and Health Administration (“MSHA”) is the primary regulatory organization governing frac sand mining and processing. Accordingly, MSHA regulates quarries, surface mines, underground mines and the industrial mineral processing facilities associated with and located at quarries and mines. The mission of MSHA is to administer the provisions of the Federal Mine Safety and Health Act of 1977 as amended by the Mine Improvement and
New Emergency Response (MINER) Act of 2006 and to enforce compliance with mandatory miner safety and health standards. As part of MSHA’s oversight, representatives perform at least two unannounced inspections annually for each above-ground facility.
We are also subject to regulations by the U.S. Occupational Safety and Health Administration (“OSHA”) which has promulgated rules for workplace exposure to respirable silica for several other industries. Respirable silica is a known health hazard for workers exposed over long periods. In 2023, MSHA proposed similar rules, which would, among other updates, reduce the exposure limits, require immediate corrective actions if exposure limits are exceeded, require exposure sampling and no-cost medical surveillance, and update respiratory protection requirements. Airborne respirable silica is associated with work areas at our site and is monitored closely through routine testing and MSHA inspection. We do not expect to need to make any significant changes in operations or infrastructure to comply with the new rules. We also adhere to NISA’s respiratory protection program, and ensure that workers are provided with fitted respirators and ongoing radiological monitoring.
Our operations are subject to the Federal Mine Safety and Health Act of 1977, as amended by the Mine Improvement and New Emergency Response Act of 2006, which imposes stringent health and safety standards on numerous aspects of mineral extraction and processing operations, including the training of personnel, operating procedures, operating equipment, and other matters. Our failure to comply with such standards, or changes in such standards or the interpretation or enforcement thereof, could have a material adverse effect on our business and financial condition or otherwise impose significant restrictions on our ability to conduct mineral extraction and processing operations. Following passage of The Mine Improvement and New Emergency Response Act of 2006, MSHA significantly increased the numbers of citations and orders charged against mining operations. The dollar penalties assessed for citations issued have also increased in recent years. Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 95.1 to this Report.
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PART II
ITEM 5. — MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Shares of our common stock, traded publicly under the symbol, “SND,” have been publicly traded since November 4, 2016, when our common stock was listed and began trading on the NASDAQ Global Select Market (“NASDAQ”). Prior to that date, there was no public market for our stock.
Holders of Record
On February 19, 2026, there were 43,538,189 shares of our common stock outstanding, which were held by 32 stockholders of record. Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.
Dividends
Our ability to pay dividends is governed by (i) the provisions of Delaware corporate law, (ii) our Certificate of Incorporation and Bylaws, and (iii) our FCB ABL Credit Facility. Our board of directors declared a special dividend of $0.10 per share of common stock on July 23, 2025, which was paid on August 14, 2025 to stockholders of record at the close of business on August 4, 2025. Our board of directors declared an additional special dividend of $0.05 per share of common stock on November 18, 2025, which was paid on December 16, 2025 to stockholders of record at the close of business on December 2, 2025. We can give no assurance that we will pay any cash dividends on our common stock in the future. The future payment of cash dividends on our common stock, if any, is within the discretion of our board of directors and will depend on our earnings, capital requirements, financial condition, restrictions under our FCB ABL Credit Facility and other relevant factors.
Smart Sand, Inc. Comparative Stock Performance Graph
The graph below compares the cumulative total stockholder return on our common stock, the cumulative total return on the Russell 3000 Index and the Standard and Poor’s Small Cap 600 GICS Oil & Gas Equipment & Services Sub-Industry for the last five years.
The graph assumes $100 was invested on December 31, 2020, in our common stock, the Russell 3000, and the Standard and Poor’s Small Cap 600 GICS Oil & Gas Equipment & Services Sub-Industry Index. The cumulative total return assumes the reinvestment of all dividends.
The information contained in this Smart Sand, Inc. Comparative Stock Performance Graph section shall not be deemed to be “soliciting material” or “filed” or incorporated by reference in future filings with the SEC, or subject to the liabilities of
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Section 18 of the Exchange Act, except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act or the Exchange Act.
Unregistered Sales of Equity Securities and Use of Proceeds
During the three months ended December 31, 2025, no shares were sold by the Company without registration under the Securities Act of 1933.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
On October 3, 2024, our board of directors approved an eighteen-month share repurchase program under which we may purchase up to $10.0 million of its ordinary shares (the “Repurchase Program”). Pursuant to the Repurchase Program, we may repurchase ordinary shares from time to time, in amounts, at prices and at such times as we deem appropriate, subject to market conditions and other considerations. We may make repurchases in the open market, privately negotiated transactions, accelerated repurchase programs or structured share repurchase programs. The Repurchase Program will be conducted in compliance with applicable legal requirements and shall be subject to market conditions and other factors. The Repurchase Program does not obligate us to acquire any particular amount of ordinary shares and the Repurchase Program may be modified or suspended at any time at our discretion.
| Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | Maximum number of shares (or approximate dollar value) that may yet be purchased under the plans or programs | |||||||||||||||||||||||
| October 2025 | — | $ | — | — | $ | 7,904,773 | ||||||||||||||||||||
| November 2025 | — | $ | — | — | $ | 7,904,773 | ||||||||||||||||||||
| December 2025 | — | $ | — | — | $ | 7,904,773 | ||||||||||||||||||||
| — | $ | — | — | |||||||||||||||||||||||
On February 23, 2026, our board of directors approved a share repurchase program authorizing us to repurchase up to $20.0 million of its outstanding shares of common stock. The plan will take effect on April 4, 2026 after completion of our current share repurchase plan and will continue through April 3, 2028. The timing, manner, price, and amount of any repurchases under the share repurchase program will be determined at our discretion. Purchases may be effected through open market transactions, privately negotiated transactions, transactions structured through investment banking institutions, or other means. The Repurchase Program does not obligate us to acquire any particular amount of ordinary shares and the Repurchase Program may be modified or suspended at any time at our discretion.
ITEM 6. — RESERVED
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SMART SAND, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED)
ITEM 7. — MANAGEMENT’S DISCUSSION AND ANALYSIS FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
The following discussion and analysis of our financial condition and results of operations should be read together with Item 1, “Business,” and Item 8, "Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.
This discussion contains forward-looking statements as a result of many factors, including those set forth under Item 1, “Business—Forward-Looking Statements” and Item 1A, “Risk Factors,” and elsewhere in this report. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially from those discussed in or implied by forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this report, particularly in Item 1A, “Risk Factors.”
We use contribution margin, EBITDA, Adjusted EBITDA and free cash flow herein as non-GAAP measures of our financial performance. For further discussion of contribution margin, EBITDA, Adjusted EBITDA and free cash flow, see the section entitled “Non-GAAP Financial Measures” in this Item 7 of this Annual Report on Form 10-K. We define various terms to simplify the presentation of information in this Report. All share amounts are presented in thousands.
Factors Affecting Comparability of Our Financial Results
Our historical results of operations and cash flows may not be indicative of results of operations and cash flows to be expected in the future, principally for the following reasons:
•Expansion of Operations. As discussed in the section entitled “Recent Developments” in this Item 7 of this Annual Report on Form 10-K, in recent years we have added the Blair facility and several new terminals, along with expanding our operations into industrial products. This growth and expansion reduces comparability of periods due to increased revenue, cost of goods sold, operating costs, and capital investments.
•Market Trends. Supply and demand fundamentals have been stable during the last several years and frac sand prices have recovered from previous historic lows. There have been modest pricing fluctuations over the periods presented, but we believe the fluctuation is consistent with other commodities in the oilfield services sector.
Overview
We are a fully integrated frac and industrial sand supply and services company. We offer complete mine to wellsite proppant supply and logistics solutions to our frac sand customers. We produce low-cost, high quality Northern White sand, which is a premium sand used as proppant to enhance hydrocarbon recovery rates in the hydraulic fracturing of oil and natural gas wells and for a variety of industrial applications. We also offer proppant logistics solutions to our customers through our in-basin transloading terminals and our SmartSystemsTM wellsite storage capabilities. In late 2021, we created our Industrial Products Solutions (“IPS”) business in order to diversify our customer base and markets we serve by offering sand for industrial uses. We market our products and services to oil and natural gas exploration and production companies, oilfield service companies, and diversified industrial and commercial customers. We sell our sand through long-term contracts, short-term supply agreements or spot sales in the open market. We provide wellsite proppant storage solutions services and equipment under flexible contract terms custom tailored to meet the needs of our customers. We believe that, among other things: (i) the size and favorable geologic characteristics of our sand reserves; (ii) the strategic location and logistical advantages of our facilities; (iii) our proprietary SmartDepotTM portable wellsite storage silos, SmartPath® wellsite proppant management system, and SmartBeltTM conveyor; (iv) access to all Class I rail lines; and (v) the industry experience of our senior management team make us as a highly attractive provider of sand and logistics services.
We incorporated in Delaware in July 2011 and began operations at our Oakdale facility with 1.1 million tons of annual processing capacity in July 2012. After several expansions, our current annual processing capacity at our Oakdale facility is approximately 5.5 million tons of sand. The Oakdale facility contains an onsite, unit train capable rail terminal with onsite
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SMART SAND, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED)
access to the Class 1 Canadian Pacific Railway and nearby access to the Class I Union Pacific Railroad through our Byron, Wisconsin transload facility.
In September 2020, we acquired from Eagle all of the issued and outstanding equity interests in Eagle Oil and Gas Proppants Holdings, LLC. This acquisition included our Ottawa, Illinois processing facility, which has approximately 1.6 million tons of annual sand processing capacity. We commenced operations at the Ottawa facility in October, 2020.
In March 2022, we acquired all of the issued and outstanding equity interests in Hi-Crush Blair, LLC, which included our Blair, Wisconsin processing facility. This facility has approximately 2.9 million tons of total annual sand processing capacity and contains an onsite, unit train capable rail terminal with access to the Class 1 Canadian National Railway. We commenced operations at the Blair facility in the second quarter of 2023.
We directly control five in-basin transloading facilities and have access to third party transloading terminals in all operating basins. These terminals allow us to offer more efficient and sustainable delivery options to our customers. We operate a unit train capable transloading terminal in Van Hook, North Dakota to service the Bakken Formation in the Williston Basin. We operate this terminal under a long-term agreement with Canadian Pacific Railway. We also serve the Appalachian Basin through three company-controlled terminals. In January 2022, we began operations at a unit train capable transloading terminal in Waynesburg, Pennsylvania, which we expanded in 2023. In December 2023, we acquired the right to operate a terminal in Minerva, Ohio and in January 2024 we acquired the rights to operate a terminal in Dennison, Ohio. These two Ohio terminals became operational in 2024. In 2025, we expanded the Dennison, Ohio terminal. We also have rights to use a rail terminal located in El Reno, Oklahoma. Additionally, we have long-standing relationships with third party terminal operators that allow us access to substantially all oil and natural gas exploration production basins of North America.
We also offer our customers portable wellsite storage and management solutions through our SmartSystems products and services. Our Smart Systems enable customers to unload, store, and deliver proppant at the wellsite and rapidly set up, take down, and transport the entire system. This capability enhances our customers’ efficiency, safety, and reliability. Through our SmartSystems wellsite proppant storage solutions, we offer the SmartDepot and SmartDepotXL silo systems, the SmartBelt conveyor, the SmartPath wellsite proppant management system, and our rapid deployment trailers. The SmartDepot silos feature passive and active dust suppression technology and support gravity-fed operation. Our self-contained SmartPath wellsite proppant management system is a mobile sand transloading solution that works with bottom-dump trailers. These systems include a drive-over conveyor, surge bin, silo storage, bucket elevators, and integrated dust collection. In 2024, we developed new dual bucket elevators to enhance our vertical material handling capabilities. We also increased our silo storage capacity and streamlined proppant delivery directly to the blender. This addition provides greater flexibility for customers with varying wellsite configurations while maintaining the efficiency, safety, and reliability that define our SmartSystems solutions. Our rapid deployment trailers are designed for quick setup, takedown, and transportation of the entire SmartSystem. They detach from the wellsite equipment, allowing for removal from the wellsite during operations. We believe our SmartSystems help customers reduce trucking and related fuel consumption, reducing the carbon footprint of their daily operations.
We have expanded our IPS product line in 2023 by completing the installation of blending and cooling equipment at our Ottawa, Illinois facility, which we believe provides new opportunities to increase our customer base in the IPS business. We expect to continue to expand and diversify to serve the major industrial markets throughout North America, including glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail and recreational uses.
Recent Developments
Ohio Transload Terminals
In late 2023 and early 2024, we acquired the rights to operate unit train capable transloading facilities located in Minerva, Ohio and Dennison, Ohio. These sites became operational in 2024 and we believe that they provide us with the opportunity to sell additional sand to existing and potential customers in the Appalachian Basin.
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SMART SAND, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED)
Blair Mine and Processing Facility
In April 2023, our processing facility located in Blair, Wisconsin became operational. This facility has approximately 2.9 million tons of total annual sand processing capacity and contains an onsite, unit train capable rail terminal with access to the Class 1 Canadian National Railway. We believe this facility provides us with opportunities to expand our customer base in Canada along with other portions of North America.
Assets and Operations
Oakdale, Wisconsin
Our sand reserves in Oakdale include a mix of coarse and fine sand with a majority of the reserves being the finer grades. With demand currently in the frac sand market being primarily for finer mesh sands, we believe our reserve mix provides us relatively higher mining yields and lower processing costs than frac sand mines with predominantly coarse sand reserves. We have approximately 228 million tons of proven and probably recoverable reserves with an estimated life of mine of approximately 71 years, based on expected sales volumes.
Our Oakdale facility is purpose-built to exploit the reserve profile in place and produce high-quality frac sand. Unlike some of our competitors, our primary processing and rail loading facilities are located in close proximity to the mine site, which limits the need for us to truck sand on public roads between the mine and the production facility, between wet and dry processing facilities, or from the processing facility to rail loading facilities. Our on-site transportation assets include approximately nine miles of rail track in a triple-loop configuration and four railcar loading facilities that are connected to the Class I Canadian Pacific Railway. This enables us to simultaneously accommodate multiple unit trains and significantly increases our efficiency in meeting our customers’ frac sand transportation needs. Additionally, we have our unit train capable transload facility approximately three miles from the Oakdale facility in Byron Township, Wisconsin, which provides us with the ability to ship sand to our customers on the Class I Union Pacific rail network. We believe that we are the only sand facility in Wisconsin that has dual served rail capabilities, which should create competition among our rail carriers and allow us to provide more competitive logistics options for our customers.
Ottawa & Peru, Illinois
Our Ottawa facility also has a large high-quality reserve base of primarily fine-mesh sand that is contiguous to the production facility and in close proximity to our Peru transload facility located on the BNSF railway. We have approximately 125 million tons of proven and probable reserves, and an estimated life of mine of approximately 149 years, based on expected sales volumes. Our owned Peru transload facility provides direct access to the BNSF rail line and has significant logistics assets to support our Ottawa operations. This facility is capable of handling multiple unit trains simultaneously and provides access to operating basins in the western United States. Additionally, the CSX rail line, as well as diversified industrial and commercial customers in the greater Chicago area and other Midwestern metropolitan markets are within short trucking distances.
Blair, Wisconsin
Our Blair facility also has a large high-quality reserve base of primarily fine-mesh sand that is contiguous to the production facility and significant logistics assets located on the Canadian National Railway. We have approximately 109 million tons of proven and probable reserves and an estimated life of mine of approximately 67 years, based on expected sales volumes. Our Blair facility provides us with significant logistics assets that further increases our logistics advantage, including access to the Canadian National Railway, a Class I rail line. In the second quarter of 2023, we commenced operations at the Blair facility.
Logistics
From our three operating facilities of Oakdale, Ottawa and Blair, we have direct access to four Class I rail lines and all Class I rail lines within the United States and Canada. We believe this allows us to deliver frac sand to all operating basins in North America on a sustainable, efficient and cost-effective basis. We expect to continue to capitalize the logistics networks of our three operating facilities to maximize our product shipments, increase our railcar utilization and lower our transportation costs.
58
SMART SAND, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED)
Through our transloading terminal in Van Hook, North Dakota, we provide one of the most efficient and lowest-cost sources of Northern White sand in-basin to customers operating in the Bakken Formation in the Williston Basin. In 2021, we acquired the right to operate the Waynesburg, Pennsylvania terminal. In December 2023, we acquired rights to operate a transloading terminal in Minerva, Ohio. In January 2024 we acquired rights to operate a terminal in Dennison, Ohio. With these three terminals in the Appalachian Basin, we believe we are one of the premier providers of low cost high-quality Northern White Sand serving the Marcellus and Utica formations. We also acquired a rail terminal from the Eagle acquisition located in El Reno, Oklahoma, which allows us to economically provide frac sand to customers operating nearby, including customers using our SmartSystems last mile equipment.
Through our SmartSystems offering, we have the technology, production capacity and management team to compete further in the frac sand supply chain for our customers by offering logistics services from the mine all the way to the wellsite. Our SmartSystems consist of our SmartDepot proppant storage silos, our SmartPath wellsite proppant management system, our SmartBelt conveyor and our rapid deployment trailer system.
We believe our patented SmartDepot silos will outperform our competitors in that they can be set up or taken down rapidly, they include industry-leading passive and active dust suppression technology, they have the capability of gravity-fed operation and they can be filled by both pneumatic and gravity dump trailers. Our trailers detach, which reduces their footprint on the wellsite. In 2020, we developed a self-contained SmartPath wellsite proppant management system, which is a mobile sand transloading system designed to work with bottom dump trailers and features a drive over conveyor, surge bin, silo storage, and integrated dust collection system. In 2024, we developed new dual bucket elevators to enhance our vertical material handling capabilities. We also increased our silo storage capacity and streamlined proppant delivery directly to the blender. This addition provides greater flexibility for customers with varying wellsite configurations while maintaining the efficiency, safety, and reliability that define our SmartSystems solutions. We believe the system has the ability to keep up with any hydraulic fracturing operation. Our SmartBelt conveyor is designed to work with our SmartPath wellsite proppant management system to directly feed sand into the blender. Our rapid deployment trailers are designed for quick setup, takedown and transportation of the entire SmartSystem, and they detach from the wellsite equipment, which allows for removal from the wellsite during operation. We have also developed a proprietary software program, the SmartSystem TrackerTM, which allows our SmartSystems customers to monitor silo-specific information, including location, proppant type and proppant inventory.
Through the expansion of our SmartSystems fleet and other logistics options, we continue evaluating ways to reduce the landed cost of our products in-basin and to the wellsite for our customers while increasing our customized service offerings to provide additional delivery and pricing alternatives, including selling product on an “as-delivered” basis to the wellsite. We believe that our SmartSystems reduce trucking and related fuel consumption for our customers, helping them reduce their carbon footprint in their daily operations.
How We Generate Revenue
We generate revenue by excavating and processing frac sand, which we sell to our customers in the oil and gas industry under short and long-term contracts agreements or as spot sales at prevailing market rates. For in-basin sales, revenues also include a charge for transportation and handling services provided to customers. Our contracts typically contain a minimum volume purchase requirement and provide for delivery of frac sand from one of our processing facilities, transloading terminals or another location specified by our customers. Revenue is generally recognized as products are delivered to customers in accordance with the contract.
We generate revenue from our SmartSystems by renting equipment and providing services to our customers under contract terms tailored to meet their short-term or long-term needs with any number of SmartDepots, SmartPaths, SmartBelts or trailers they require. We recognize revenue when the equipment is made available for the customer to use, services are provided, or other obligations in the contract are met.
In the fourth quarter of 2021, we expanded our product line to begin offering sand through IPS. In 2023, we completed the installation of blending and cooling assets at our Ottawa, Illinois facility that we believe will provide new opportunities to increase our customer base in the IPS business. We expect to continue to expand and diversify to serve the major industrial
59
SMART SAND, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED)
markets throughout North America, including glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail and recreational uses.
Costs of Conducting Our Business
The principal direct costs involved in operating our business are freight charges, which include transportation, railcar rental and transload expenses, and production costs, which consists of labor, maintenance, utilities, equipment, excavation and depreciation of our property, plant and equipment. We incur labor costs associated with employees at our processing facilities which represent the most significant cost of converting sand to finished products. Our sand processing and logistics facilities undergo maintenance to minimize unscheduled downtime and ensure the ongoing quality of our sand and ability to meet customer demands. We incur utility costs in connection with the operation of our processing and logistics facilities, primarily electricity and natural gas, which are both susceptible to market fluctuations. We lease equipment in many areas of our operations including some of our mining and hauling equipment and logistics services. Excavation costs relate to the blasting and excavation of sand and other materials in order to retrieve desirable sand products. In addition, other costs including processing costs, overhead allocation, depreciation and depletion are capitalized as a component of inventory and are reflected in cost of goods sold when inventory is sold.
Overall Trends and Outlook
Demand Trends
Demand for frac sand declined moderately during 2025. According to Spears, North America proppant demand decreased by approximately 2% compared to 2024. Despite lower drilling and completion activity during the year, overall frac sand demand remained relatively stable, supported by longer lateral well lengths and increased sand volume per linear foot of lateral well. Frac sand demand is expected to increase moderately in 2026. In addition, demand may continue to grow over the next five years, driven by expected increases in natural gas demand to support expanded LNG export capacity and potential incremental power demand from data centers.
Supply Trends
Supplies of high-quality Northern White frac sand are limited to select areas, predominantly in western Wisconsin and limited areas of Minnesota, Illinois and Missouri. We believe the ability to obtain large contiguous reserves in these areas is a key constraint and can be an important supply consideration when assessing the economic viability of a potential frac sand processing facility. Further constraining the supply and throughput of Northern White frac sand is that not all of the large reserve mines have on-site excavation, processing or logistics capabilities, which impact the long-term competitiveness of these mines due to lower efficiency and higher cost structures. Historically, much of the capital investment in Northern White frac sand mines was used for the development of coarser deposits in western Wisconsin, which is inconsistent with the increasing demand for finer mesh frac sand in recent years. As such, we’ve seen competitors in the Northern White frac sand market reduce their capacity by shuttering or idling operations due to the shift to finer sands in hydraulic fracturing of oil and natural gas wells and due to lower cost regional sand sources that has eroded the ongoing economic viability of mines with coarser reserve deposits and inefficient mining and logistics facilities.
Management’s Outlook
In 2021, we started several strategic initiatives to take advantage of the market downturn to set ourselves up for success in future years. These initiatives primarily consisted of growing our asset base and product offerings. We have increased the size of our terminal network by opening our Waynesburg, Pennsylvania transloading terminal in 2022, expanding it in 2023, commencing operations at two transloading terminals at Minerva, Ohio and Dennison, Ohio in 2024 and expanding the Dennison terminal in 2025. With these three terminals in the Appalachian Basin, we believe we are one of the premier providers of low-cost high-quality Northern White Sand into this key market. We also increased our production capacity with our acquisition of the Blair, Wisconsin mine and processing facility in 2022. This facility, which has approximately 2.9 million tons of total annual sand processing capacity, contains an onsite, unit train capable rail terminal with access to the Class 1 Canadian National Railway and became operational in the second quarter of 2023. With this acquisition, we now have direct access to four Class I rail lines and the ability to access all Class 1 rail lines within the United States and Canada.
60
SMART SAND, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED)
In the fourth quarter of 2021, we expanded our product line to begin offering IPS. Since then, we have worked to expand and diversify our customer base to serve the major industrial markets throughout North America, including glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail and recreation. Our IPS business has continued to grow after we completed the installation of blending and cooling assets in 2023 and we believe will continue to expand this business in 2026 and beyond.
We expect the demand for frac sand in 2026 to continue to moderately increase. We believe higher demand driven by increased laterals and higher amounts of sand per well completed should lead to sand prices remaining relatively stable in 2026.
In recent years, exploration and production companies have been more disciplined in their drilling activity which has led to less volatility in supply and demand of oil and natural gas which has stabilized oil and natural gas prices at levels sufficient to support consistent drilling and completion activity. Demand for both frac sand and our SmartSystems is influenced by the number of oil and natural gas wells being drilled and completed, as well as the types of wells that are completed and the volume of sand being used in each well. We expect the Bakken, Marcellus and Utica shale formations as well as the Montney and Duvernay shale basins in Canada to continue to be key markets for us and we look to expand our market share in these key areas through our current strategic initiatives.
Additionally, growth in AI-driven data centers is expected to indirectly support increased demand for frac sand by driving incremental natural gas consumption and, in turn, increased levels of natural gas drilling and completion activity. As natural gas needs increase to meet rising power demand, producers may increase development in key shale basins, leading to higher well completions and greater use of frac sand.
The industry trends continue towards drilling and completing wells with longer laterals and more frac stages per lateral foot drilled. This trend is leading to higher volumes of sand per well and the need for oil and natural gas exploration companies to manage larger volumes of sand at the wellsite. We believe these trends support continued demand for frac sand and increased demand for SmartSystems as customers look to create synergies in the time and cost of managing their sand needs at the wellsite.
We generally expect the price of frac sand to fluctuate based on the level of drilling and completions activity for oil and natural gas as well as overall supply for frac sand relative to demand. We believe the supply of sand to be stabilizing or contracting as consolidation in the industry continues. The willingness of exploration and production companies to engage in new drilling is determined by a number of factors, the most important of which are the prevailing and projected prices of oil and natural gas, the cost to drill, complete and operate a well, the availability and cost of capital and environmental and government regulations, as well as their ability to source sand delivered to the wellsite. We generally expect the level of drilling to correlate with long-term trends in commodity prices. Similarly, oil and natural gas production levels nationally and regionally generally tend to correlate with drilling activity.
61
SMART SAND, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED)
GAAP Results of Operations
Year Ended December 31, 2025 compared to the Year Ended December 31, 2024:
| Year Ended December 31, | Change | |||||||||||||||||||||||||
| 2025 | 2024 | Dollars | Percentage | |||||||||||||||||||||||
| (in thousands, except percentage change) | ||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||
| Sand revenue | $ | 325,762 | $ | 303,590 | $ | 22,172 | 7 | % | ||||||||||||||||||
| SmartSystems revenue | 4,391 | 7,782 | (3,391) | (44) | % | |||||||||||||||||||||
| Total revenue | 330,153 | 311,372 | 18,781 | 6 | % | |||||||||||||||||||||
| Cost of goods sold: | ||||||||||||||||||||||||||
| Sand cost of goods sold | 287,811 | 258,812 | 28,999 | 11 | % | |||||||||||||||||||||
| SmartSystems cost of goods sold | 4,454 | 7,737 | (3,283) | (42) | % | |||||||||||||||||||||
| Total cost of goods sold | 292,265 | 266,549 | 25,716 | 10 | % | |||||||||||||||||||||
| Gross profit | 37,888 | 44,823 | (6,935) | (15) | % | |||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||
| Selling, general and administrative | 40,524 | 38,161 | 2,363 | 6 | % | |||||||||||||||||||||
| Depreciation and amortization | 2,390 | 2,596 | (206) | (8) | % | |||||||||||||||||||||
| (Gain) loss on disposal of fixed assets, net | (566) | 1,062 | (1,628) | (153) | % | |||||||||||||||||||||
| Total operating expenses | 42,348 | 41,819 | 529 | 1 | % | |||||||||||||||||||||
| Operating income (loss) | (4,460) | 3,004 | (7,464) | (248) | % | |||||||||||||||||||||
| Other (expenses) income: | ||||||||||||||||||||||||||
| Interest expense, net | (1,469) | (1,769) | 300 | (17) | % | |||||||||||||||||||||
| Loss on extinguishment of debt | — | (1,341) | 1,341 | (100) | % | |||||||||||||||||||||
| Other income | 343 | 358 | (15) | (4) | % | |||||||||||||||||||||
| Total other (expenses), net | (1,126) | (2,752) | 1,626 | 59 | % | |||||||||||||||||||||
| (Loss) income before income tax benefit (expense) | (5,586) | 252 | (5,838) | (2317) | % | |||||||||||||||||||||
| Income tax (benefit) expense | (6,931) | (2,740) | (4,191) | 153 | % | |||||||||||||||||||||
| Net income | $ | 1,345 | $ | 2,992 | $ | (1,647) | (55) | % | ||||||||||||||||||
Revenue
Total revenue was $330.2 million for the year ended December 31, 2025 compared to $311.4 million for the year ended December 31, 2024.
Sand revenue for the year ended December 31, 2025 increased by 7% to $325.8 million generated from 5.4 million tons of sand sold, as compared to sand revenue for the year ended December 31, 2024 of $303.6 million generated from 5.3 million tons of sand. The increase in sand revenue was primarily due to a 3% increase in sand volumes and slightly increased sand pricing from 2024 to 2025. Sand revenue for the years ended December 31, 2025 and 2024 also included $4.4 million and $4.8 million, respectively, related to contractual charges for tons sold in excess of certain contractual thresholds.
SmartSystems revenue was $4.4 million for the year ended December 31, 2025, a decline from $7.8 million for the year ended December 31, 2024. The decline was due to lower overall utilization of our SmartSystems fleet in 2025.
62
SMART SAND, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED)
Cost of Goods Sold
Sand cost of goods sold was $287.8 million and $258.8 million, for the years ended December 31, 2025 and December 31, 2024, respectively. The increase was primarily due to higher volumes sold and the related increase in production costs and freight and transloading costs.
SmartSystems cost of goods sold was $4.5 million and $7.7 million, for the years ended December 31, 2025 and December 31, 2024, respectively. The decrease was primarily due to decreased costs associated with lower overall utilization of our SmartSystems fleet in 2025.
Gross Profit
Gross profit was $37.9 million and $44.8 million for the years ended December 31, 2025 and December 31, 2024, respectively. The decrease in gross profit for the year ended December 31, 2025 was primarily due to higher freight and delivery costs as well as increased production costs.
Operating Expenses
Operating expenses were $42.3 million and $41.8 million for the years ended December 31, 2025 and December 31, 2024, respectively. Overall, selling, general and administrative costs increased $2.4 million primarily due to increased wages and benefits and a $1.0 million payment to one of our utility providers to support planned growth at our Oakdale facility. The gain on disposal of assets of $0.6 million for the year ended December 31, 2025 was primarily related to the sale of vacant land that was part of a previous acquisition. The loss on the disposal of assets of $1.1 million for the year ended December 31, 2024 was primarily related to the closing our Saskatoon, Canada manufacturing facility and relocating it to the United States.
Other Expense / Income
We incurred $1.5 million and $1.8 million of net interest expense for the years ended December 31, 2025 and 2024, respectively.
Income Tax Benefit
Income tax benefit was $6.9 million for the year ended December 31, 2025 compared to income tax benefit of $2.7 million for the year ended December 31, 2024. For the years ended December 31, 2025 and 2024, our effective tax rate was approximately 124.1% and (1087.3)%, respectively. The computation of the effective tax rate for the years ended December 31, 2025 and 2024 included modifications from the statutory rate such as income tax credits, depletion deductions, and state taxes, NOL carrybacks and carryforwards, and the partial release of the reserve for uncertain tax positions in 2025, among other items.
Net Income
Net income was $1.3 million for year ended December 31, 2025 compared to net income of $3.0 million for the year ended December 31, 2024. The change in net income is attributable to an increase in volumes sold with slightly increased pricing offset by the increase in cost of goods sold due to increased freight and transloading costs. Additionally, a larger benefit from income taxes was recorded in the current period.
63
SMART SAND, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED)
Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023:
| Year Ended December 31, | Change | ||||||||||||||||||||||
| 2024 | 2023 | Dollars | Percentage | ||||||||||||||||||||
| (in thousands, except percentage change) | |||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Sand revenue | $ | 303,590 | $ | 287,479 | $ | 16,111 | 6 | % | |||||||||||||||
| SmartSystems revenue | 7,782 | 8,494 | (712) | (8) | % | ||||||||||||||||||
| Total revenue | 311,372 | 295,973 | 15,399 | 5 | % | ||||||||||||||||||
| Cost of goods sold: | |||||||||||||||||||||||
| Sand cost of goods sold | 258,812 | 247,181 | 11,631 | 5 | % | ||||||||||||||||||
| SmartSystems cost of goods sold | 7,737 | 7,237 | 500 | 7 | % | ||||||||||||||||||
| Total cost of goods sold | 266,549 | 254,418 | 12,131 | 5 | % | ||||||||||||||||||
| Gross profit | 44,823 | 41,555 | 3,268 | 8 | % | ||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Selling, general and administrative | 38,161 | 38,722 | (561) | (1) | % | ||||||||||||||||||
| Depreciation and amortization | 2,596 | 2,535 | 61 | 2 | % | ||||||||||||||||||
| (Gain) loss on disposal of fixed assets, net | 1,062 | 1,802 | (740) | (41) | % | ||||||||||||||||||
| Total operating expenses | 41,819 | 43,059 | (1,240) | (3) | % | ||||||||||||||||||
| Operating income (loss) | 3,004 | (1,504) | 4,508 | (300) | % | ||||||||||||||||||
| Other (expenses) income: | |||||||||||||||||||||||
| Interest expense, net | (1,769) | (1,272) | (497) | 39 | % | ||||||||||||||||||
| Loss on extinguishment of debt | (1,341) | — | (1,341) | Not meaningful | |||||||||||||||||||
| Other income | 358 | 524 | (166) | (32) | % | ||||||||||||||||||
| Total other (expenses), net | (2,752) | (748) | (2,004) | 268 | % | ||||||||||||||||||
| (Loss) income before income tax benefit (expense) | 252 | (2,252) | 2,504 | (111) | % | ||||||||||||||||||
| Income tax (benefit) expense | (2,740) | (6,901) | 4,161 | (60) | % | ||||||||||||||||||
| Net income | $ | 2,992 | $ | 4,649 | $ | (1,657) | (36) | % | |||||||||||||||
Revenue
Total revenue was $311.4 million for the year ended December 31, 2024 compared to $296.0 million for the year ended December 31, 2023.
Sand revenue for the year ended December 31, 2024 increased by 6% to $303.6 million generated from 5.3 million tons of sand sold, as compared to sand revenue for the year ended December 31, 2023 of $287.5 million generated from 4.5 million tons of sand. The increase in sand revenue was primarily due to an increase in sand volumes by 17% from 2023 to 2024. Sand prices declined during the second half of the year, which partially offset the increase in sales volumes.
SmartSystems revenue was $7.8 million for the year ended December 31, 2024, a decline from $8.5 million for the year ended December 31, 2023. The decline was due to lower overall utilization of our SmartSystems fleet in 2024.
64
SMART SAND, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED)
Cost of Goods Sold
Sand cost of goods sold was $258.8 million and $247.2 million, for the years ended December 31, 2024 and December 31, 2023, respectively. The increase was primarily due to higher volumes sold and the related increase in production costs and freight costs that accompany higher volumes.
SmartSystems cost of goods sold was relatively consistent for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Gross Profit
Gross profit was $44.8 million and $41.6 million for the years ended December 31, 2024 and 2023, respectively. The increase in gross profit for the year ended December 31, 2024 was primarily due to higher sand sales volumes which was partially offset by lower average sale prices of our sand relative to the cost to produce and deliver products to our customers.
Operating Expenses
Operating expenses were $41.8 million and $43.1 million for the years ended December 31, 2024 and December 31, 2023, respectively. Overall, selling, general and administrative costs declined as management continued to focus on cost-cutting measures. Royalties increased due to higher volumes sold for the year ended December 31, 2024 and bank and legal fees were higher as we completed debt refinancing in 2024. Wages, maintenance and insurance costs declined, driven by management efforts to reduce costs. The loss on disposal of assets of $1.1 million for the year ended December 31, 2024 was primarily related to closing our Saskatoon, Canada manufacturing facility and relocating it to the United States. The loss on the disposal of assets of $1.8 million for the year ended December 31, 2023 was primarily related to the reconfiguration of one of our wet plants to increase the efficiency of its operations.
Other Expense / Income
We incurred $1.8 million and $1.3 million of net interest expense for the years ended December 31, 2024 and 2023, respectively. We recorded a $1.3 million loss on extinguishment of debt for the year ended December 31, 2024 related to the payoff of previous fixed-rate debt, which was refinanced with the VFI Equipment Financing.
Income Tax Benefit
Income tax benefit was $2.7 million for the year ended December 31, 2024 compared to income tax benefit of $6.9 million for the year ended December 31, 2023. For the years ended December 31, 2024 and 2023, our effective tax rate was approximately (1087.3)% and 306.4%, respectively, based on the annual effective tax rate net of discrete federal and state taxes. The computation of the effective tax rate for the year ended December 31, 2024 and 2023 included modifications from the statutory rate such as income tax credits, depletion deductions, NOL carrybacks and carryforwards and state income taxes, among other items.
Net Income
Net Income was $3.0 million for year ended December 31, 2024 compared to net income of $4.6 million for the year ended December 31, 2023. The change in net income is attributable to an increase in operating income of $4.5 million which was attributable to an increase in total sand volumes sold and lower operating expenses, partially offset by smaller benefit from income taxes recorded in the 2024.
Non-GAAP Financial Measures
Contribution margin, EBITDA, Adjusted EBITDA and free cash flow are not financial measures presented in accordance with GAAP. We believe that the presentation of these non-GAAP financial measures will provide useful information to investors in assessing our financial condition and results of operations. Gross profit is the GAAP measure most directly comparable to contribution margin, net income is the GAAP measure most directly comparable to EBITDA and Adjusted EBITDA and net cash provided by operating activities is the GAAP measure most directly comparable to free cash flow. Our non-GAAP financial measures should not be considered as alternatives to the most directly comparable GAAP financial measures. Each of these non-GAAP financial measures has important limitations as analytical tools because they exclude some
65
SMART SAND, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED)
but not all items that affect the most directly comparable GAAP financial measures. You should not consider contribution margin, EBITDA, Adjusted EBITDA or free cash flow in isolation or as substitutes for an analysis of our results as reported under GAAP. Because contribution margin, EBITDA, Adjusted EBITDA and free cash flow may be defined differently by other companies in our industry, our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.
Contribution Margin
We use contribution margin, which we define as total revenues less costs of goods sold excluding depreciation, depletion and accretion of asset retirement obligations, to measure our financial and operating performance. Contribution margin excludes other operating expenses and income, including costs not directly associated with the operations of our business such as accounting, human resources, information technology, legal, sales and other administrative activities.
Gross profit is the GAAP measure most directly comparable to contribution margin. Contribution margin should not be considered an alternative to gross profit presented in accordance with GAAP. We believe contribution margin is a meaningful measure because it provides an operating and financial measure of our ability to generate margin in excess of our operating cost base. Because contribution margin may be defined differently by other companies in our industry, our definition of contribution margin may not be comparable to similarly titled measures of other companies, thereby diminishing its utility. The following table presents a reconciliation of contribution margin to gross profit.
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Revenue | $ | 330,153 | $ | 311,372 | $ | 295,973 | |||||||||||
| Cost of goods sold | 292,265 | 266,549 | 254,418 | ||||||||||||||
| Gross profit | 37,888 | 44,823 | 41,555 | ||||||||||||||
Depreciation, depletion, and accretion of asset retirement obligations included in cost of goods sold | 27,203 | 26,861 | 25,469 | ||||||||||||||
| Contribution margin | $ | 65,091 | $ | 71,684 | $ | 67,024 | |||||||||||
| Contribution margin per ton | $ | 11.96 | $ | 13.62 | $ | 14.85 | |||||||||||
| Total tons sold | 5,443 | 5,263 | 4,514 | ||||||||||||||
Contribution margin was $65.1 million, or $11.96 per ton sold, for the year ended December 31, 2025 compared to $71.7 million, or $13.62 per ton sold, for the year ended December 31, 2024. The decrease in overall contribution margin for the year ended December 31, 2025, as compared to the prior year, was primarily due to the increase in logistics costs due to higher sales volumes, the delivery location of our sales and increased mining costs.
Contribution margin was $71.7 million, or $13.62 per ton sold, for the year ended December 31, 2024 compared to $67.0 million, or $14.85 per ton sold, for the year ended December 31, 2023. The increase in overall contribution margin for the year ended December 31, 2024, as compared to the prior year, was primarily due to higher sales volumes, which was partially offset by lower average sale prices per ton, which also caused the decline in contribution margin per ton.
EBITDA and Adjusted EBITDA
We define EBITDA as net income, plus: (i) depreciation, depletion and amortization expense; (ii) income tax expense (benefit) and other results of operations based taxes; and (iii) interest expense. We define Adjusted EBITDA as EBITDA, plus: (i) gain or loss on sale of fixed assets or discontinued operations; (ii) integration and transition costs associated with specified transactions; (iii) equity compensation; (iv) acquisition and development costs; (v) non-recurring cash charges related to restructuring, retention and other similar actions; (vi) earn-out, contingent consideration obligations and other acquisition and development costs; and (vii) non-cash charges and unusual or non-recurring charges. Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our financial statements, such as investors and commercial banks, to assess:
66
SMART SAND, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED)
•the financial performance of our assets without regard to the impact of financing methods, capital structure or historical cost basis of our assets;
•the viability of capital expenditure projects and the overall rates of return on alternative investment opportunities;
•our ability to incur and service debt and fund capital expenditures;
•our operating performance as compared to those of other companies in our industry without regard to the impact of financing methods or capital structure; and
•our debt covenant compliance, as Adjusted EBITDA is a key component of critical covenants to the ABL Credit Facility.
We believe that our presentation of EBITDA and Adjusted EBITDA will provide useful information to investors in assessing our financial condition and results of operations. Net income is the GAAP measure most directly comparable to EBITDA and Adjusted EBITDA. EBITDA and Adjusted EBITDA should not be considered alternatives to net income presented in accordance with GAAP. Because EBITDA and Adjusted EBITDA may be defined differently by other companies in our industry, our definitions of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other companies, thereby diminishing their utility. The following table presents a reconciliation of EBITDA and Adjusted EBITDA to net income for each of the periods indicated.
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Net income | $ | 1,345 | $ | 2,992 | $ | 4,649 | |||||||||||
| Depreciation, depletion and amortization | 28,785 | 28,735 | 27,363 | ||||||||||||||
| Income tax benefit and other taxes | (6,931) | (2,740) | (6,901) | ||||||||||||||
| Interest expense | 1,738 | 1,838 | 1,532 | ||||||||||||||
| EBITDA | $ | 24,937 | $ | 30,825 | $ | 26,643 | |||||||||||
| Net loss (gain) on sale of fixed assets | (566) | 1,062 | 1,802 | ||||||||||||||
| Equity compensation | 3,386 | 2,855 | 3,391 | ||||||||||||||
Acquisition and development costs (1) | 1,000 | 325 | 545 | ||||||||||||||
| Bank and legal costs related to financing not closed | — | 1,294 | — | ||||||||||||||
| Cash charges related to restructuring and retention | 33 | 149 | 32 | ||||||||||||||
| Accretion of asset retirement obligations | 1,101 | 996 | 904 | ||||||||||||||
| Loss on extinguishment of debt | — | 1,341 | — | ||||||||||||||
| Adjusted EBITDA | $ | 29,891 | $ | 38,847 | $ | 33,317 | |||||||||||
(1) Represents costs incurred related to the business combinations and current development project activities. The year ended December 31, 2025 includes a $1,000 payment to one of our utility providers to support planned growth at our Oakdale facility. The year ended December 31, 2024 includes $308 related to a disposal from the Eagle Materials acquisition. The year ended December 31, 2023 includes $271 of costs related to the acquisition of the Blair facility and $274 related to the Minerva, Ohio terminal.
_________________________
Adjusted EBITDA was $29.9 million for the year ended December 31, 2025 compared to $38.8 million for the year ended December 31, 2024. The decrease in Adjusted EBITDA for the year ended December 31, 2025, as compared to the prior year, was primarily due to higher logistics costs due to the delivery location of frac sand sales and higher mining costs.
Adjusted EBITDA was $38.8 million for the year ended December 31, 2024 compared to $33.3 million for the year ended December 31, 2023. The increase in Adjusted EBITDA for the year ended December 31, 2024, as compared to the prior year, was primarily due to higher sales volumes and production costs savings, partially offset by declining average selling prices in the second half of 2024.
67
SMART SAND, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED)
Free Cash Flow
Free cash flow, which we define as net cash provided by operating activities less purchases of property, plant and equipment, is used as a supplemental financial measure by our management and by external users of our financial statements, such as investors and commercial banks, to measure the liquidity of our business.
Net cash provided by operating activities is the GAAP measure most directly comparable to free cash flows. Free cash flows should not be considered an alternative to net cash provided by operating activities presented in accordance with GAAP. Because free cash flows may be defined differently by other companies in our industry, our definition of free cash flows may not be comparable to similarly titled measures of other companies, thereby diminishing its utility. The following table presents a reconciliation of free cash flows to net cash provided by operating activities.
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Net cash provided by operating activities | $ | 44,116 | $ | 17,864 | $ | 30,991 | |||||||||||
| Purchases of property, plant and equipment | (11,595) | (7,010) | (23,031) | ||||||||||||||
| Free cash flow | $ | 32,521 | $ | 10,854 | $ | 7,960 | |||||||||||
Free cash flow was $32.5 million for the year ended December 31, 2025. Net cash provided by operating activities increased to $44.1 million in 2025, compared to $17.9 million in 2024, primarily due to higher cash generated from increased sales volumes, a customer payment of $9.2 million related to prior year contractual volume targets, of which $4.8 million was included in the prior year’s unbilled receivables balance, and a customer prepayment of $9.8 million for sand sales for 2026, currently in deferred revenue. Capital expenditures for the year ended December 31, 2025 were $11.6 million compared to $7.0 million for the year ended December 31, 2024, primarily due to increased growth-related capital spent in 2025.
Free cash flow was $10.9 million for the year ended December 31, 2024. Net cash provided by operating activities decreased to $17.9 million in 2024, compared to $31.0 million in 2023, primarily due to working capital pressure as a result of higher sales volumes in the fourth quarter of 2024. Our accounts receivables convert to cash slower than our payables related to sand shipments, which results in lower free cash flows in months immediately following increasing sales activity. Capital expenditures for the year ended December 31, 2024 were $7.0 million compared to $23.0 million for the year ended December 31, 2023, primarily due to less growth-related capital spent in 2024 and management’s continued focus on managing costs.
Liquidity and Capital Resources
Our primary sources of liquidity are cash flow generated from operations, availability under the FCB ABL Credit Facility and other equipment financing sources. As of December 31, 2025, cash on hand was $22.6 million and we had $30.0 million in undrawn availability under the FCB ABL Credit Facility.
Based on our balance sheet, cash flows, current market conditions, and information available to us at this time, we believe that we have sufficient liquidity and other available capital resources, to meet our cash needs for the next twelve months, including continued investment in efficiency projects at our Oakdale, Blair and Ottawa facilities, as well as a potential new terminal to service the Montney and Duvernay shale basins in Canada.
Material Cash Requirements
Dividends and Share Repurchase Program
Our returns to shareholders for the year ended December 31, 2025 totaled $8.6 million, including dividends and share repurchases.
On November 18, 2025, our Board of Directors declared a special dividend of $0.05 per share of common stock, which was paid on December 16, 2025 to stockholders of record at the close of business on December 2, 2025. The dividend payment returned approximately $2.1 million to our shareholders.
68
SMART SAND, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED)
On July 23, 2025, our Board of Directors declared a special dividend of $0.10 per share of common stock, which was paid on August 14, 2025 to stockholders of record at the close of business on August 4, 2025. The dividend payment returned approximately $4.4 million to our shareholders.
On October 3, 2024, our board of directors approved the eighteen-month Repurchase Program. Pursuant to the Repurchase Program, we may repurchase up to $10.0 million of our ordinary shares from time to time, in amounts, at prices and at such times as management deems appropriate, subject to market conditions and other considerations. Management may make repurchases in the open market, privately negotiated transactions, accelerated repurchase programs or structured share repurchase programs.
The Repurchase Program will be conducted in compliance with applicable legal requirements and shall be subject to market conditions and other factors. The Repurchase Program does not obligate management to acquire any particular amount of ordinary shares and the Repurchase Program may be modified or suspended at any time. We repurchased $2.1 million of shares under this repurchase program in 2025.
On February 23, 2026, our board of directors approved a share repurchase program authorizing us to repurchase up to $20.0 million of its outstanding shares of common stock. The plan will take effect on April 4, 2026 after completion of our current share repurchase plan and will continue through April 3, 2028. The timing, manner, price, and amount of any repurchases under the share repurchase program will be determined at our discretion. Purchases may be effected through open market transactions, privately negotiated transactions, transactions structured through investment banking institutions, or other means. The Repurchase Program does not obligate us to acquire any particular amount of ordinary shares and the Repurchase Program may be modified or suspended at any time at our discretion.
10b5-1 Trading Plan
On November 20, 2025, we entered into a written trading plan under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. We implemented this written trading plan in connection with our Repurchase Program. The trading plan permitted the purchase of up to a total of $2.5 million of our shares (including commissions). The number of shares of Company common stock to be purchased on any purchase day was up to the maximum daily target volume allowable under Rule 10b-18 of the Exchange Act. No shares have been repurchased under this 10b5-1 Trading Plan.
On May 22, 2025, we entered into a written trading plan under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. We implemented this written trading plan in connection with our Repurchase Program. The trading plan permitted the purchase of up to a total of $1.5 million of our shares (including commissions). The number of shares of Company common stock to be purchased on any purchase day was up to the maximum daily target volume allowable under Rule 10b-18 of the Exchange Act. We purchased $1.5 million of shares under the 10b5-1 Trading Plan and the plan was terminated in July 2025.
Capital Requirements
We expect 2026 capital expenditures to be between $15.0 million and $20.0 million, consisting primarily of capital to open new mining areas for development, efficiency projects at our Oakdale, Blair and Ottawa facilities and potential investment in one or more new terminals. We expect to fund these capital expenditures with existing cash, cash generated from operations, borrowings under the FCB ABL Credit Facility or other financing sources, such as equipment finance providers.
Indebtedness
We have two primary debt facilities including the VFI Equipment Financing and our FCB ABL Credit Facility. Our VFI Equipment Financing is secured by the majority of our SmartSystems equipment. The outstanding balance under the VFI Equipment Financing as of December 31, 2025 was $6.6 million. The VFI facility amortizes to one dollar in 2028. Minimum cash payments on this facility in 2026 are $2.9 million. There were no borrowings outstanding on our FCB ABL Credit Facility as of December 31, 2025.
Operating Leases
We use leases primarily to procure certain office space, railcars and heavy equipment as part of our operations. The majority of our lease payments are fixed and determinable. Our operating lease liabilities as of December 31, 2025 were $23.2 million. Minimum cash payments on operating leases in 2026 are $10.2 million.
69
SMART SAND, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED)
Mineral Rights Property
The Company is obligated under certain contracts for minimum payments for the right to use land for extractive activities. The annual minimum payments under these contracts is approximately $2.5 million per year for the next 11 years.
Off-Balance Sheet Arrangements
We had $19.7 million of outstanding performance bonds for each of the years ended December 31, 2025 and 2024, respectively. These performance bonds assure our performance under our reclamation plan, maintenance and restoration of public roadways.
Environmental Matters
We are subject to various federal, state and local laws and regulations governing, among other things, hazardous materials, air and water emissions, environmental contamination and reclamation and the protection of the environment and natural resources. We have made, and expect to make in the future, expenditures to comply with such laws and regulations, but cannot predict the full amount of such future expenditures.
Seasonality
Our business is affected to some extent by seasonal fluctuations in weather that impact the production levels for a portion of our wet sand processing capacity. While our dry plants are able to process finished product volumes evenly throughout the year, our excavation and our wet sand processing activities at some of our mines have historically been limited to primarily non-winter months. As a consequence, we have experienced lower cash operating costs in the first and fourth quarter of each calendar year, and higher cash operating costs in the second and third quarter of each calendar year when we overproduce wet sand to meet dry sand demand in the winter months. These higher cash operating costs are capitalized into inventory and expensed when these tons are sold, which can lead to us having higher overall cost of production in the first and fourth quarters of each calendar year as we expense inventory costs that were previously capitalized. We have indoor wet processing facilities at our Oakdale and Ottawa plant locations that allow us to produce wet sand inventory year-round to support a portion of our dry sand processing capacity, which may reduce certain of the effects of this seasonality. We may also sell frac sand for use in oil and natural gas producing basins where severe weather conditions may curtail drilling activities and, as a result, our sales volumes to those areas may be reduced during such severe weather periods. Additionally, over the last several years, exploration and production companies have become more disciplined in their spending patterns relative to their budgets, which has led to some of our customers completing their budgeted spending earlier in the year. This spending discipline could potentially lead to a slowdown in activity by our customers and lower sand demand in the fourth quarter of the year.
Customer Concentration
For the year ended December 31, 2025, EQT Corporation and EOG Resources, Inc. accounted for 27.7% and 10.9% respectively, of total revenue. For the year ended December 31, 2024, EQT Corporation, Encino Energy and Liberty Oilfield Services accounted for 31.9%, 13.8% and 10.2%, respectively, of total revenue. For the year ended December 31, 2023, EQT Corporation and Liberty Oilfield Services accounted for 30.2% and 11.4%, respectively, of total revenue.
Critical Accounting Estimates
The discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements and the reported revenues and expenses during the reporting periods. We evaluate these estimates and assumptions on an ongoing basis and base our estimates on historical experience, current conditions and various other assumptions that we believe to be reasonable under the circumstances. The results of these
70
SMART SAND, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED)
estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. Our actual results may materially differ from these estimates.
Listed below are the accounting estimates that we believe are critical to our financial statements due to the degree of uncertainty regarding the estimates or assumptions involved.
Asset Retirement Obligation
We estimate the future cost of dismantling, restoring and reclaiming operating excavation sites and related facilities in accordance with federal, state and local regulatory requirements and recognize reclamation obligations when extraction occurs and record them as liabilities at estimated fair value. In addition, a corresponding increase in the carrying amount of the related asset is recorded and depreciated over such asset’s useful life or the estimated number of years of extraction. The reclamation liability is accreted to expense over the estimated productive life of the related asset and is subject to adjustments to reflect changes in value resulting from the passage of time and revisions to the estimates of either the timing or amount of the reclamation costs. If the asset retirement obligation is settled for more or less than the carrying amount of the liability, a loss or gain will be recognized, respectively. The asset retirement obligation estimate is calculated by estimating the cost to reclaim an area as of the estimation date and inflating that cost to an estimated reclamation date, then discounting that inflated cost back to the reporting period date. Changes in the current estimate or the interest rates used for inflation or discount can have a material effect on the liability reported. In addition, due to the nature or our business, changes in mine planning can result in changes to our estimated future reclamation dates.
Inventory Valuation
Sand inventory is stated at the lower of cost or net realizable value using the average cost method. Costs applied to inventory include direct excavation costs, processing costs, overhead allocation, depreciation and depletion. Reserves are estimated for moisture loss and waste during production. Stockpile tonnages are calculated by measuring the number of tons added and removed from the stockpile. Tonnages are verified periodically by a survey. Costs are calculated on a per ton basis and are applied to the stockpiles based on the number of tons in the stockpile. There was no writedown of inventory value based on the lower of cost or net realizable value calculation.
Impairment of Long-Lived Assets
We periodically evaluate whether current events or circumstances indicate that the carrying value of our long-lived assets may not be recoverable. If circumstances indicate that the carrying value may not be recoverable, we estimate future undiscounted net cash flows, estimated future sales prices (considering historical and current prices, price trends and related factors) and anticipated operating costs and capital expenditures. If the carrying value of our long-lived assets is less than the undiscounted cash flows, the assets are measured at fair value and an impairment is recorded if that fair value is less than the carrying value. During the year ended December 31, 2025, we did not record any impairment charges based on the analysis of our long-lived assets.
Income Taxes
Under the balance sheet approach to provide for income taxes, we recognize deferred tax assets and liabilities for the expected future tax consequences of net operating loss carryforwards and temporary differences between the carrying amounts and the tax bases of assets and liabilities. In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. If we determine it is more likely than not that we will not be able to realize the benefits of the deductible temporary differences, we would record a valuation allowance against the net deferred tax asset.
We recognize uncertain tax positions at the largest amount that, in our judgment, is more-likely-than-not to be required to be recognized upon examination by a taxing authority.
We have recorded a liability of $0.6 million and $2.2 million for uncertain tax positions included in deferred tax liabilities, long-term, net on our consolidated balance sheet as of December 31, 2025 and 2024, respectively, related to our depletion deduction methodology, and a corresponding decrease to the income tax expense on our consolidated statements of operations.
71
SMART SAND, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED)
As of December 31, 2025, we determined it is more likely than not that we will not be able to fully realize the benefits of certain existing deductible temporary differences and have recorded a valuation allowance against the deferred tax liabilities, long-term, net on our consolidated balance sheet in the amount of $1.9 million. The valuation allowance as of December 31, 2024 was $2.2 million. The corresponding increase to the income tax benefit on our consolidated statements of operations for the year ended December 31, 2025 was $0.3 million.
72
ITEM 7A. — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk is the risk of loss arising from adverse changes in market rates and prices. Historically, our risks have been predominantly related to potential changes in the fair value of our long-term debt due to fluctuations in applicable market interest rates. Going forward our market risk exposure generally will be limited to those risks that arise in the normal course of business, as we do not engage in speculative, non-operating transactions, nor do we utilize financial instruments or derivative instruments for trading purposes.
Commodity Price Risk
The market for proppant and proppant storage equipment is indirectly exposed to fluctuations in the prices of crude oil and natural gas to the extent such fluctuations impact drilling and completion activity levels and thus impact the activity levels of our customers in the oilfield services and exploration and production industries. Additionally the price fluctuations of natural gas, electricity, as well as diesel prices impact the overall cost of conducting our business. At times, we hedge a portion of our estimated indirect exposure to commodity price risk by entering into fixed price contracts for natural gas, propane and electricity.
Interest Rate Risk
The majority of our debt is financed under fixed interest rates. Borrowings under the FCB ABL Credit Facility bear interest at a rate equal to the secured overnight financing rate (“SOFR”) plus a margin of 2.75% or Prime plus a margin of 1.75%. There were no outstanding borrowings under our FCB ABL Credit Facility as of December 31, 2025. We do not believe this represents a material interest rate risk.
Credit Risk
We are exposed to credit risk through our accounts receivable and contract volumes with customers, the majority of whom operate in the natural gas and oil exploration, production, and well-completion services sectors. Because these customers tend to be similarly affected by changes in commodity prices, drilling and completion activity, and broader upstream energy market conditions, this concentration increases the potential for correlated credit losses during periods of industry volatility. A deterioration in the financial condition of one or more significant customers, or an inability to renew or replace expiring contracts on comparable terms, could adversely affect our gross profit and operating cash flows.
Foreign Currency Risk
Our revenues and expenses are primarily in United States dollars; however, certain transactions are transacted in Canada dollars. Thus, revenues, operating expenses, the results of operations, assets and liabilities may be affected to the extent that they are not hedged by the rise and fall of the relative value of the United States dollar to the Canada dollar. During the years ended December 31, 2025, 2024 and 2023, revenue, expenses, assets and liabilities transacted in Canada dollars were immaterial to the results of operations.
73
ITEM 8. — FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following Consolidated Financial Statements are filed as part of this Annual Report on Form 10-K:
| PAGE | ||||||||
74
Report of Independent Registered Public Accounting Firm
Board of Directors and Stockholders
Smart Sand, Inc.
Opinion on the financial statements
We have audited the accompanying consolidated balance sheets of Smart Sand, Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedule included under Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
Basis for opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical audit matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
/s/ GRANT THORNTON LLP
We have served as the Company’s auditor since 2014.
February 26, 2026
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SMART SAND, INC.
CONSOLIDATED BALANCE SHEETS
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Accounts receivable | |||||||||||
| Unbilled receivables | |||||||||||
| Inventory | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total current assets | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Intangible assets, net | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued expenses and other liabilities | |||||||||||
| Deferred revenue | |||||||||||
| Current portion of long-term debt | |||||||||||
| Current portion of operating lease liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Long-term operating lease liabilities | |||||||||||
| Deferred tax liabilities, net | |||||||||||
| Asset retirement obligation | |||||||||||
| Other non-current liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies (Note 16) | |||||||||||
| Stockholders’ equity | |||||||||||
Common stock, $ issued and issued and | |||||||||||
Treasury stock, at cost, December 31, 2025 and 2024, respectively | ( | ( | |||||||||
| Additional paid-in capital | |||||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive income (loss) | ( | ( | |||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
76
SMART SAND, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands of U.S. dollars, except per share amounts) | |||||||||||||||||
| Revenues: | |||||||||||||||||
| Sand revenue | $ | $ | $ | ||||||||||||||
| SmartSystems revenue | |||||||||||||||||
| Total revenue | |||||||||||||||||
| Cost of goods sold: | |||||||||||||||||
| Sand cost of goods sold | |||||||||||||||||
| SmartSystems cost of goods sold | |||||||||||||||||
| Total cost of goods sold | |||||||||||||||||
| Gross profit | |||||||||||||||||
| Operating expenses: | |||||||||||||||||
| Selling, general and administrative | |||||||||||||||||
| Depreciation and amortization | |||||||||||||||||
| (Gain) loss on disposal of fixed assets, net | ( | ||||||||||||||||
| Total operating expenses | |||||||||||||||||
| Operating income (loss) | ( | ( | |||||||||||||||
| Other (expenses) income: | |||||||||||||||||
| Interest expense, net | ( | ( | ( | ||||||||||||||
| Loss on extinguishment of debt | ( | ||||||||||||||||
| Other income | |||||||||||||||||
| Total other (expenses), net | ( | ( | ( | ||||||||||||||
| (Loss) income before income tax benefit (expense) | ( | ( | |||||||||||||||
| Income tax (benefit) expense | ( | ( | ( | ||||||||||||||
| Net income | $ | $ | $ | ||||||||||||||
| Net income per common share: | |||||||||||||||||
| Basic | $ | $ | $ | ||||||||||||||
| Diluted | $ | $ | $ | ||||||||||||||
| Weighted-average number of common shares: | |||||||||||||||||
| Basic | |||||||||||||||||
| Diluted | |||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
77
SMART SAND, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands of U.S. dollars) | |||||||||||||||||
| Net income | $ | $ | $ | ||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||
| Foreign currency translation adjustment | ( | ( | |||||||||||||||
| Comprehensive income | $ | $ | $ | ||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
78
SMART SAND, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
| Common Stock | Treasury Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||
Outstanding Shares | Par Value | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
| (in thousands of U.S. dollars, except share amounts) | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2022 | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Vesting of restricted stock | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Employee stock purchase plan compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Employee stock purchase plan issuance | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Purchase of treasury stock | ( | ( | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Restricted stock buy back | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($ | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Vesting of restricted stock | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Employee stock purchase plan compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Employee stock purchase plan issuance | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Restricted stock buy back | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($ | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Vesting of restricted stock | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Forfeited dividends | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Employee stock purchase plan compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Employee stock purchase plan issuance | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Purchase of treasury stock | ( | ( | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Restricted stock buy back | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
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SMART SAND, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands of U.S. dollars) | |||||||||||||||||
| Operating activities: | |||||||||||||||||
| Net income | $ | $ | $ | ||||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
| Depreciation, depletion and accretion of asset retirement obligation | |||||||||||||||||
| Amortization of intangible assets | |||||||||||||||||
| Net loss (gain) on disposal of assets | ( | ||||||||||||||||
| Provision for bad debt | |||||||||||||||||
| Amortization of deferred financing cost | |||||||||||||||||
| Loss on extinguishment of debt | |||||||||||||||||
| Deferred income taxes | ( | ( | ( | ||||||||||||||
| Stock-based compensation, net | |||||||||||||||||
| Employee stock purchase plan compensation | |||||||||||||||||
| Changes in assets and liabilities: | |||||||||||||||||
| Accounts receivable | ( | ||||||||||||||||
| Unbilled receivables | ( | ( | |||||||||||||||
| Inventory | ( | ( | |||||||||||||||
| Prepaid expenses and other assets | ( | ||||||||||||||||
| Deferred revenue | ( | ( | |||||||||||||||
| Settlement of asset retirement obligation | ( | ( | |||||||||||||||
| Accounts payable | ( | ||||||||||||||||
| Accrued expenses and other liabilities | ( | ||||||||||||||||
| Net cash provided by operating activities | |||||||||||||||||
| Investing activities: | |||||||||||||||||
| Purchases of property, plant and equipment | ( | ( | ( | ||||||||||||||
| Proceeds from disposal of assets | |||||||||||||||||
| Net cash used in investing activities | ( | ( | ( | ||||||||||||||
| Financing activities: | |||||||||||||||||
| Dividend payments to stockholders | ( | ( | |||||||||||||||
| Proceeds from the issuance of notes payable | |||||||||||||||||
| Repayments of notes payable | ( | ( | ( | ||||||||||||||
| Proceeds from revolving credit facility | |||||||||||||||||
| Repayment of revolving credit facility | ( | ( | ( | ||||||||||||||
| Payments under finance leases | ( | ( | ( | ||||||||||||||
| Payment of deferred financing and debt issuance costs | ( | ( | |||||||||||||||
| Payment for debt extinguishment costs | ( | ||||||||||||||||
| Employee stock purchase plan issuance | |||||||||||||||||
| Repurchase of treasury stock from restricted stock vesting | ( | ( | |||||||||||||||
| Repurchase of treasury stock from Repurchase Program | ( | ( | |||||||||||||||
| Net cash used in financing activities | ( | ( | ( | ||||||||||||||
| Net increase (decrease) in cash and cash equivalents | ( | ||||||||||||||||
| Cash and cash equivalents at beginning of year | |||||||||||||||||
| Cash and cash equivalents at end of year | $ | $ | $ | ||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
80
SMART SAND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of U.S. dollars, except per share data)
NOTE 1 — Organization and Nature of Business
The Company was incorporated in July 2011 and is headquartered in Yardley, Pennsylvania. The Company primarily operates as a fully integrated frac and industrial sand supply and services company. The Company offers complete mine to wellsite proppant supply and logistics solutions to our frac sand customers. These operations include the excavation, processing and sale of sand, or proppant, for use in hydraulic fracturing operations as well as proppant logistics and wellsite storage solutions through its SmartSystemsTM products and services. In late 2021, the Company created its Industrial Products Solutions (“IPS”) business to diversify its customer base and markets it serves by offering sand to customers for industrial uses, such as glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail, and recreation.
Sand Mines and Processing Facilities
The Company’s integrated Oakdale facility, with on-site rail infrastructure and wet and dry sand processing facilities, has access to two Class I rail lines which enable the Company to process and cost effectively deliver products to its customers. The Company completed construction of the first phase of its mine and processing facility near Oakdale, Wisconsin and commenced operations in July 2012, and subsequently expanded its operations in 2014, 2015 and 2018. Currently, the annual processing capacity at the Company’s Oakdale facility is approximately 5.5 million tons.
In September 2020, the Company acquired two frac sand mines and related processing facilities in Ottawa, Illinois and New Auburn, Wisconsin. The Ottawa facility has an annual processing capacity of 1.6 million tons and access to the Burlington Northern Santa Fe (“BNSF”) Class I rail line through the Peru, Illinois transload facility. The Company began operating the Ottawa, Illinois mine and Peru, Illinois transload facility in October 2020. The Company has no plans to operate the New Auburn Facility for the foreseeable future.
In March 2022, the Company acquired its Blair, Wisconsin facility, whose primary assets consisted of an idle frac sand mine and related processing facility. The Blair facility has approximately 2.9 million tons of total annual processing capacity and contains an onsite, unit train capable rail terminal with access to the Class 1 Canadian National Railway. The Company began operations at Blair in the second quarter of 2023.
Through its three operating facilities, the Company has direct access to four Class I rail lines and the ability to access all Class 1 rail lines within the United States and Canada.
Transload & Logistics Solutions
The Company also offers proppant logistics solutions to its customers through, among other things, its in-basin transloading terminals and its SmartSystemsTM wellsite proppant storage and management capabilities.
In March 2018, the Company acquired the rights to operate a unit train capable transloading terminal in Van Hook, North Dakota to service the Bakken Formation in the Williston Basin and began providing Northern White Sand in-basin in April 2018.
In September 2020, the Company acquired the rights to use a rail terminal located in El Reno, Oklahoma.
In September 2021, the Company acquired the rights to construct and operate a transloading terminal in Waynesburg, Pennsylvania to service the Appalachian Basin, including the Marcellus and Utica Formations. The Company began providing sand to customers through this terminal in January 2022 and expanded the facility’s capacity in late 2023.
In December 2023 and January 2024, the Company acquired rights to use transloading terminals in Minerva, Ohio and Dennison, Ohio, respectively and commenced operations servicing the Appalachian Basin in 2024.
In June 2018, the Company acquired substantially all of the assets of Quickthree Solutions, Inc., (“Quickthree”), a manufacturer of portable vertical proppant storage solution systems. Quickthree formed the basis for the Company’s SmartSystems under which it offers various proppant storage solutions that create efficiencies, flexibility, enhanced safety and reliability for customers by providing the capability to unload, store and deliver proppant at the wellsite, as well as the ability to rapidly set up, takedown and transport the entire system. The SmartDepotTM silo includes passive and active dust suppression technology, along with the capability of gravity-fed operation. The self-contained SmartPathTM wellsite proppant management system is a mobile sand transloading system designed to work with bottom dump trailers and features a drive over conveyor, surge bin, silo storage and integrated dust collection system. In 2024, we developed new dual bucket elevators to enhance our
81
SMART SAND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of U.S. dollars, except per share data)
vertical material handling capabilities. We also increased our silo storage capacity and streamlined proppant delivery directly to the blender. These improvements provide greater flexibility for customers with varying wellsite configurations while maintaining the efficiency, safety, and reliability that define our SmartSystems solutions. The SmartBeltTM conveyor works in conjunction with the SmartPath wellsite proppant management system to provide sand directly into the blender on the wellsite. Rapid deployment trailers are designed for quick setup, takedown and transportation of the entire SmartSystem, and they detach from the wellsite equipment, which allows for removal from the wellsite during operation. A proprietary software program, the SmartSystem TrackerTM, allows customers to monitor silo-specific information, including location, proppant type and proppant inventory.
NOTE 2 — Summary of Significant Accounting Policies
Basis of Presentation and Consolidation
The accompanying consolidated financial statements (“financial statements”) of the Company have been prepared in accordance with GAAP and pursuant to the rules and regulations of the SEC. The accompanying financial statements include those of our controlled subsidiaries. The intercompany accounts and transactions have been eliminated. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these financial statements have been included.
The Company has reclassified the prior year financial statement presentation to conform to the current financial statement presentation. These reclassifications have no effect on previously reported net income.
Use of Estimates
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates used in the preparation of these financial statements include, but are not limited to: depreciation and amortization associated with property, plant and equipment and definite-lived intangible assets; impairment considerations of intangible assets; estimated cost of future asset retirement obligations; fair value of acquired assets and assumed liabilities; stock-based compensation; recoverability of deferred tax assets; inventory reserve; collectability of receivables; and certain liabilities.
Revenue Recognition
Revenues are generally recognized when control of the promised goods or services is transferred to our customers, the amount of which reflects the consideration the Company expects to be entitled to in exchange for those goods or services.
Sand Revenue
The Company derives its sand sales revenue by mining and processing sand. Its revenues are primarily a function of the price per ton realized and the volumes sold. The singular performance obligation for sand sold is determined by each individual purchase order and the respective products ordered, with revenue being recognized at a point-in-time when the obligation under the terms of the agreement is satisfied and the product control is transferred to our customer. For sand delivered at one of the Company’s facilities, title passes as the product is loaded into railcars or trucks hired by the customer or provided by the Company and revenue is recognized when title transfers at the Company’s facility. For sand delivered in-basin, the Company recognizes revenue when title passes to the customer at the transload facility or in the customer’s truck, depending on the level of logistics services provided to the customer. The amount invoiced reflects product, transportation and any other additional handling services, such as storage or transloading the product from railcar to truck.
Prices under the Company’s long-term agreements with customers are generally fixed but may contain provisions allowing for adjustments including: (i) annual percentage price increases; and/or (ii) market factor adjustments, including volume pricing adjustments, natural gas surcharge/reduction, propane surcharge/reduction, diesel surcharge/reduction, or rail surcharge which are applied if prices moved beyond benchmarks established in the contract.
82
SMART SAND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of U.S. dollars, except per share data)
The Company requires certain customers to pay a monthly reservation charge based on a minimum contractual volume over the remaining life of their contract, which may be applied as a per ton credit to the sales price up to a certain contractually specified monthly volume or credited against any applicable shortfall payments. Standard collection terms are net 30 days, although extended terms are offered in competitive situations. The Company recognizes revenue when the customer no longer has the right to use the reservation charge towards sand sales or shortfall payments.
SmartSystems Revenue
SmartSystems revenues are primarily from the rental of our patented SmartSystems equipment and related services provided to customers, which is typically earned under fixed monthly rental fees or daily rates for equipment and services for the delivery, proppant management and maintenance on the equipment. Revenues are recognized when the equipment is made available or services are provided to customers in accordance with ASC 842. Certain leases include non-lease components such as maintenance services. The Company has elected the practical expedient under ASC 842 to not separate lease and non-lease components for these arrangements. Accordingly, consideration related to both the lease and associated non-lease components is accounted for as a single lease component and recognized as SmartSystems revenue over the lease term.
Contract Balances
The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables, and deferred revenue on the consolidated balance sheet. Occasionally, billing occurs subsequent to revenue recognition, though certain billing occurs in advance, resulting in unbilled receivables and deferred revenue, respectively. In addition, the Company sometimes receives shortfall payments from or offers pricing concessions to its customers, which may result in deferred revenue until the Company recognizes such revenue when performance obligations are met in accordance with the contract.
Deferred Revenues
The Company receives advance payments from certain customers in order to secure and procure a reliable provision and delivery of product. The Company classifies such advances as current or noncurrent liabilities depending upon the anticipated timing of delivery of the supplied product. Deferred revenue is recognized as revenue when performance obligations are met in accordance with the contract.
Deferred revenue recognition is as follows:
| December 31, 2025 | December 31, 2024 | ||||||||||||||||
| Total deferred revenue | $ | Total deferred revenue | $ | ||||||||||||||
| Recognized in 2025 | |||||||||||||||||
| Expected recognition: | |||||||||||||||||
| 2026 | |||||||||||||||||
| $ | $ | ||||||||||||||||
Performance Obligations
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in accordance with ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, each performance obligation is satisfied. The Company’s contracts may include a single performance obligation in a single contract whereby the allocation of transaction price is not necessary. The Company’s contracts may also contain multiple elements in a single contract or multiple contracts. For contracts with multiple performance obligations, the transaction price is allocated to each performance obligation identified in the contract based on relative standalone selling prices, or estimates of such prices, and recognize the related revenue as control of each individual product or service is transferred to the customer, in satisfaction of the corresponding performance obligations. As of December 31, 2025, the Company had $275,820 in estimated unsatisfied performance obligations related to contracts with customers. The Company expects to perform these obligations and recognize this revenue of approximately $205,251 and $70,569 in the years ended December 31, 2026 and 2027, respectively. These estimates include all open contracts as of December 31, 2025. Actual amounts earned may vary from these estimates as our contract prices include provisions for pricing changes discussed above.
83
SMART SAND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of U.S. dollars, except per share data)
Taxes Collected from Customers and Remitted to Governmental Authorities
We exclude from our measurement of transaction prices all taxes assessed by governmental authorities that are both (i) imposed on and concurrent with a specific revenue-producing transaction and (ii) collected from customers.
Significant Judgments
Cash and Cash Equivalents
Accounts and Unbilled Receivables
Accounts receivable represents customer transactions that have been invoiced in accordance with our typical monthly close procedures; unbilled receivables represent receivables recorded after our typical monthly close procedures. Accounts receivable are due in accordance with terms agreed upon with customers, and are stated at amounts due from customers net of any allowance for credit losses. The Company considers accounts outstanding longer than the payment terms past due.
Transportation
Inventories
The Company’s sand inventory consists of raw material (sand that has been excavated but not processed), work-in-progress (sand that has undergone some but not all processing) and finished goods (sand that has been completely processed and is ready for sale). Costs applied to sand inventory include direct excavation costs, processing costs, overhead allocation, depreciation and depletion, transportation and additional service costs, as applicable. Stockpile tonnages are calculated by measuring the number of tons added and removed from the stockpile. Costs are calculated on a per ton basis and are applied to the stockpiles based on the number of tons in the stockpile. The Company performs periodic surveys to verify the quantity of sand inventory on hand. Due to variation in sand density and moisture content and production processes utilized to manufacture the Company’s products, physical inventories will not necessarily detect all variances. To mitigate this risk, the Company recognizes a yield adjustment on its inventories. Sand inventory is stated at the lower of cost or net realizable value using the average cost method. There was no write-down of inventory value based on the lower of cost or net realizable value calculation for the years ended December 31, 2025, 2024 and 2023. The Company also performs an analysis on its existing inventory and estimates the expected production yield based on waste sand produced to determine if it has obsolete inventory. There was no
Deferred Financing Charges
Direct costs incurred in connection with the Company’s debt are capitalized amortized using the straight-line method, which approximates the effective interest method, over the term of the debt. Amortization expense of the deferred financing and debt discount charges of $250 , $237 , and $291 are included in interest expense as of December 31, 2025, 2024 and 2023,
84
SMART SAND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of U.S. dollars, except per share data)
respectively. Costs related to the FCB ABL Credit Facility are presented in other assets on the balance sheet rather than an offset to the debt balance for consistent reporting when there is no balance on the FCB ABL Credit Facility.
Financial Instruments
The carrying value of the Company’s financial instruments, consisting of cash, accounts receivable, accounts payable, accrued expenses, and debt approximates their fair value due to the short maturity of such instruments. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.
Property, Plant and Equipment
Property, plant and equipment are recorded at cost. Deferred stripping costs are amortized over the estimated life of the mining area to which they apply. Construction in progress is primarily comprised of machinery and equipment which has not been placed in service and is not depreciated until the related assets or improvements are ready to be placed in service. Depreciation is calculated using the straight-line method over the estimated useful lives of the property, plant and equipment, which are:
| Years | |||||
| Machinery, equipment and tooling | |||||
| SmartSystems | |||||
| Vehicles | |||||
| Furniture and fixtures | |||||
| Plant and buildings | |||||
| Real estate properties | |||||
| Railroad and sidings | |||||
| Land improvements | |||||
| Deferred stripping costs | |||||
Expenditures for maintenance and repairs are charged against income as incurred; betterments that increase the value or materially extend the life of the related assets are capitalized. Upon sale or disposition of property and equipment, the cost and related accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is recognized in the consolidated statements of operations.
Acquisitions
The Company determines whether a transaction or other event is a business combination, which requires that the assets acquired and liabilities assumed constitute a business. Each business combination is then accounted for by applying the acquisition method. If the assets acquired are not a business, the Company accounts for the transaction or other event as an asset acquisition. Under both methods, the Company recognizes the identifiable assets acquired, the liabilities assumed, contingent considerations and any non-controlling interest in the acquired entity. In addition, for transactions that are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase. The Company capitalizes acquisition-related costs and fees associated with asset acquisitions and expenses acquisition-related costs and fees associated with business combinations in the period in which they are incurred.
Long-Lived Assets, Including Definite-Lived Intangible Assets
Long-lived assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows derived from such assets. Definite-lived intangible assets primarily consist of developed technology. For long-lived assets used in operations, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. The Company measures the impairment loss based on the difference between the carrying amount and the estimated fair value. When an impairment exists, the related assets are written down to fair value.
85
SMART SAND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of U.S. dollars, except per share data)
Acquired finite-lived intangible assets are amortized on a straight-line basis over the following periods:
| Estimated Useful Life (Years) | ||||||||
| Developed technology | ||||||||
There were no impairments of long-lived assets or definite-lived intangible assets during the years ended December 31, 2025, 2024 and 2023.
Leases
Lessee
The Company uses leases primarily to procure certain office space, railcars and heavy equipment as part of its operations. The majority of its lease payments are fixed and determinable with certain of its lease payments containing immaterial variable payments based on the number of hours the equipment is used. Certain of its leases have options that allow for renewal at market rates, purchase at fair market value or termination of the lease. The Company must determine that it is reasonably certain that a lease option will be exercised for such an option to be included in the right-of-use asset or lease liability. The Company is not reasonably certain that any of its lease options will be exercised and, as such, has not included those options in its right-of-use assets or lease liabilities. Certain of its equipment leases contain residual value guarantees which guarantee various parts of heavy equipment will have a remaining life when the equipment is returned to the lessor. It is possible that the Company could owe additional amounts to the lessor upon return of equipment. There are no restrictions or covenants imposed by any of the Company’s leases.
The Company evaluates contracts during the negotiation process and when they are executed to determine the existence of leases. A contract contains a lease when it conveys the right to use property, plant or equipment for a stated period of time in exchange for consideration. Leases with an initial term of twelve months or less are not recorded on the balance sheet. The Company recognizes lease expense on a straight-line basis over the term of the lease. The Company evaluates the classification of its leases at the commencement date and includes both lease and non-lease components in its calculation of consideration in the contract for all classes of operating leases.
The Company applies a discount rate to operating leases by class of asset, which is its incremental borrowing rate. The Company determines its incremental borrowing rate based on an average of collateralized borrowing rates offered by various lenders. The Company considers the nature of the assets and the life of the leases and determines the incremental borrowing rate among its classes of assets. See Note 9 — Leases for additional disclosures regarding the Company’s leasing activity.
The Company is obligated under certain contracts for minimum payments for the right to use land for extractive activities, which is not within the scope of leases under ASC 842. See Note 16 — Commitments and Contingencies for additional disclosures regarding these obligations.
Lessor
Fair Value Measurements
The Company has categorized its assets and liabilities that are measured at fair value on a recurring and non-recurring basis into a three-level fair value hierarchy, of which the first two are considered observable and the last unobservable, which are as follows:
•Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date;
•Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active or other inputs corroborated by observable market data for substantially the full term of the assets or liabilities; and
86
SMART SAND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of U.S. dollars, except per share data)
•Level 3—Unobservable inputs that reflect the Company’s assumptions that market participants would use in pricing assets or liabilities based on the best information available.
The Company had no financial instruments carried at fair value as of December 31, 2025 and 2024.
Asset Retirement Obligation
The Company estimates the future cost of dismantling, restoring and reclaiming operating excavation sites and related facilities in accordance with federal, state and local regulatory requirements and recognizes reclamation obligations when disturbance occurs and records them as liabilities at estimated fair value. In addition, a corresponding increase in the carrying amount of the related asset is recorded and depreciated over such asset’s useful life or the estimated number of years of extraction. The reclamation liability is accreted to expense over the estimated productive life of the related asset and is subject to adjustments to reflect changes in value resulting from the passage of time and revisions to the estimates of either the timing or amount of the reclamation costs. If the asset retirement obligation is settled for more or less than the carrying amount of the liability, a loss or gain will be recognized, respectively.
Stock-Based Compensation
The Company issues restricted stock to certain employees and members of the board of directors of the Company (the “Board”) for their services on the Board. The Company estimates the grant date fair value of each share of restricted stock at issuance. For awards subject to service-based vesting conditions, the Company recognizes, in the consolidated statements of operations, stock-based compensation expense equal to the grant date fair value of the award on a straight-line basis over the requisite service period, which is generally the vesting term. For awards subject to both performance and service-based vesting conditions, the Company recognizes stock-based compensation expense on a straight-line basis unless it is probable that the performance condition will not be achieved. Forfeitures are accounted for when they occur. The Company uses the market price of its shares as the grant date fair value for restricted stock awards.
Income Taxes
The Company applies the provisions of ASC 740, “Income Taxes” (“ASC 740”), which principally utilizes a balance sheet approach to provide for income taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of net operating loss carryforwards and temporary differences between the carrying amounts and the tax bases of assets and liabilities.
ASC 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The impact of an uncertain income tax position on the income tax returns must be recognized at the largest amount that is more-likely-than-not to be required to be recognized upon audit by the relevant taxing authority. This standard also provides guidance on derecognition, measurement, classification, interest and penalties, accounting for interim periods, disclosure and transition issues with respect to tax positions. The Company includes interest and penalties as a component of income tax expense in the consolidated statements of operations. For the periods presented, immaterial interest and penalties were recorded.
Environmental Matters
Basic and Diluted Net Income Per Share of Common Stock
Basic net income per share of common stock is computed by dividing net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, excluding the dilutive effects of restricted stock. Diluted net income per share of common stock is computed by dividing the net income attributable to common stockholders by the sum of the weighted-average number of shares of common stock outstanding during the period plus the potential dilutive effects of restricted stock outstanding during the period calculated in accordance with the treasury stock
87
SMART SAND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of U.S. dollars, except per share data)
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Weighted average common shares outstanding | |||||||||||||||||
| Assumed conversion of restricted stock | |||||||||||||||||
| Diluted weighted average common stock outstanding | |||||||||||||||||
Recent Accounting Pronouncements
Adopted
In December 2023, the FASB issued ASU 2023-09, Income Taxes, which updates various disclosures including enhancing the income tax rate reconciliation and income taxes paid disclosures by requiring greater disaggregation of information. The other amendments in this Update are intended to improve the effectiveness and comparability of disclosures. The Update is effective for the Company for the annual reporting period beginning January 1, 2025 and for interim periods beginning January 1, 2026. The Company has adopted this ASU in the current financial statements and added the additional required disclosures in Note 14 of these financial statements. The adoption of ASU 2023-09 did not have a material impact on the Company’s financial statements.
Not yet adopted
NOTE 3 — Inventories
Inventories consisted of the following:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Raw material | $ | $ | |||||||||
| Work in progress | |||||||||||
| Finished goods | |||||||||||
| Spare parts | |||||||||||
| Total inventory | $ | $ | |||||||||
88
SMART SAND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of U.S. dollars, except per share data)
NOTE 4 — Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Prepaid insurance | $ | $ | |||||||||
| Prepaid expenses | |||||||||||
| Prepaid income taxes, net | |||||||||||
| Other receivables | |||||||||||
| Total prepaid expenses and other current assets | $ | $ | |||||||||
NOTE 5 — Property, Plant and Equipment, net
Net property, plant and equipment consists of:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Machinery, equipment and tooling | $ | $ | |||||||||
| SmartSystems | |||||||||||
| Vehicles | |||||||||||
| Furniture and fixtures | |||||||||||
| Plant and buildings | |||||||||||
| Real estate properties | |||||||||||
| Railroad and sidings | |||||||||||
| Land and land improvements | |||||||||||
| Asset retirement obligation | |||||||||||
| Mineral properties | |||||||||||
| Deferred stripping costs | |||||||||||
| Construction in progress | |||||||||||
| Less: accumulated depreciation and depletion | |||||||||||
| Total property, plant and equipment, net | $ | $ | |||||||||
Depreciation expense was $27,963 , $27,903 and $26,533 for the years ended December 31, 2025, 2024 and 2023, respectively. Depletion expense was $27 , $37 and $35 for the years ended December 31, 2025, 2024 and 2023, respectively.
The Company capitalized no
89
SMART SAND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of U.S. dollars, except per share data)
NOTE 6 — Intangible Assets, net
The following table reflects the changes in the net carrying amounts of the Company’s intangible assets for the year ended December 31, 2025.
| Balance at December 31, 2024 | Assets Acquired Pursuant to Business Combination | Impairment Charges | Amortization Expense | Balance at December 31, 2025 | ||||||||||||||||||||||||||||
| Developed technology | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||
The following table reflects the changes in the net carrying amounts of the Company’s finite-lived intangible assets for the year ended December 31, 2024.
| Balance at December 31, 2023 | Assets Acquired Pursuant to Business Combination | Impairment Charges | Amortization Expense | Balance at December 31, 2024 | ||||||||||||||||||||||||||||
| Developed technology | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||
The following table reflects the carrying amounts of the Company's finite-lived intangible assets at December 31, 2025 and 2024.
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||||||||||||
| Developed technology | $ | $ | ( | $ | ( | |||||||||||||||||||||
| $ | $ | ( | $ | $ | ( | |||||||||||||||||||||
The Company uses the straight-line method to determine the amortization expense for its definite-lived intangible assets. The weighted-average remaining useful life for the intangible assets is 5.4 years. Amortization expense related to the purchased intangible assets was $792 , $792 and $793 for the year ended December 31, 2025, 2024, and 2023, respectively.
The table below reflects the future estimated amortization expense for amortizable intangible assets as of December 31, 2025.
| Year ending December 31, | |||||
| 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
Total | $ | ||||
90
SMART SAND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of U.S. dollars, except per share data)
NOTE 7 — Accrued and Other Expense
Accrued and other expense consists of the following:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Employee related expenses | $ | $ | |||||||||
| Accrued equipment expense | |||||||||||
| Accrued professional fees | |||||||||||
| Accrued royalties | |||||||||||
| Accrued freight and delivery charges | |||||||||||
| Accrued real estate tax | |||||||||||
| Accrued utilities | |||||||||||
| Sales tax liability | |||||||||||
| Income taxes payable | |||||||||||
| Other accrued liabilities | |||||||||||
| Total accrued liabilities | $ | $ | |||||||||
NOTE 8 — Debt
Current portion of long-term debt current consists of the following:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| VFI Equipment Financing | $ | $ | |||||||||
| Notes payable | |||||||||||
| Finance leases | |||||||||||
| Current portion of long-term debt | $ | $ | |||||||||
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| FCB ABL Credit Facility | $ | $ | |||||||||
| VFI Equipment Financing, net | |||||||||||
| Notes payable | |||||||||||
| Finance lease | |||||||||||
| Long-term debt | $ | $ | |||||||||
FCB ABL Credit Facility
On September 3, 2024, the Company entered into a $30,000 five-year senior secured asset-based credit facility with First-Citizens Bank & Trust Company. The FCB ABL Credit Facility provides for non-amortizing revolving loans in an aggregate principal amount of up to $30,000 , subject to a borrowing base comprised of eligible inventory and accounts receivable. Additionally, obligations under the FCB ABL Credit Facility are guaranteed by certain of our wholly-owned domestic subsidiaries and secured by a first-priority security interest in certain non-real estate assets. Borrowings under the FCB ABL Credit Facility bear interest at a rate equal to the secured overnight financing rate (“SOFR”) plus a margin of 2.75 %.
91
SMART SAND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of U.S. dollars, except per share data)
The ABL Credit Facility contains a number of covenants that, among other things, restrict our ability to incur liens or other indebtedness, make certain restricted payments, merge or consolidate and dispose of assets. In addition, the FCB ABL Credit Facility requires us in certain limited circumstances to maintain a minimum fixed charge coverage ratio of 1.0. The FCB ABL Credit Facility also contains certain affirmative covenants and events of default customary for facilities of this type. The Company was compliant with all requirements of this facility.
The available borrowing amount under the FCB ABL Credit Facility as of December 31, 2025 was $30,000 and is based on the Company’s eligible accounts receivable and inventory. The Company had no borrowings outstanding and $30,000 available to be drawn under this facility as of December 31, 2025. As of December 31, 2025, the Company was in compliance with all financial covenants. The weighted average interest rate for this facility for the years ended December 31, 2025 and 2024 was 7.72 % and 8.20 %, respectively.
VFI Equipment Financing
On June 28, 2024, the Company entered into an equipment financing arrangement with VFI with a principal amount of $10,000 . The VFI Equipment Financing is legally comprised of a Master Lease Agreement and one lease schedule. The VFI Equipment Financing is considered a lease under article 2A of the Uniform Commercial Code but is considered a financing arrangement for accounting and financial reporting purposes, and not a lease. The collateral under the VFI Equipment Financing includes the majority of the Company’s SmartSystems equipment. The VFI Equipment Financing bears interest at a fixed rate of 11.86 %. The Company used the net proceeds to refinance a prior fixed rate facility, and the remainder was added to working capital. The VFI Equipment Financing amortizes to one dollar and will be paid in full on September 30, 2028. The Company will reacquire the underlying equipment on the lease schedule upon maturity for one dollar.
Notes Payable
Notes payable primarily include various financing arrangements to finance the Company’s purchased heavy equipment. All notes payable bear interest at fixed rates between 0.00 % and 8.49 %.
Finance Leases
See Note 9 - Leases for additional information about the Company’s finance leases.
Future minimum payments as of December 31, 2025 are as follows:
| Year Ended December 31, | FCB ABL Credit Facility | VFI Equipment Financing | Notes Payable | Finance Leases | Total | ||||||||||||||||||||||||
| 2026 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| 2027 | |||||||||||||||||||||||||||||
| 2028 | |||||||||||||||||||||||||||||
| 2029 | |||||||||||||||||||||||||||||
| 2030 and thereafter | |||||||||||||||||||||||||||||
| Total minimum payments | |||||||||||||||||||||||||||||
| Amount representing interest | — | ( | ( | ( | ( | ||||||||||||||||||||||||
Amount representing unamortized lender fees | — | ( | — | — | ( | ||||||||||||||||||||||||
| Present value of payments | |||||||||||||||||||||||||||||
| Less: current portion | ( | ( | ( | ( | |||||||||||||||||||||||||
| Total long-term debt, net | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
NOTE 9 — Leases
Lessee
At December 31, 2025 and 2024, the operating and financing components of the Company’s right-of-use assets and lease liabilities on the consolidated balance sheet are as follows:
92
SMART SAND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of U.S. dollars, except per share data)
| Balance Sheet Location | December 31, | |||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||
| Right-of-use assets | ||||||||||||||||||||
| Operating | Operating right-of-use assets | $ | $ | |||||||||||||||||
| Financing | ||||||||||||||||||||
| Total right-of use assets | $ | $ | ||||||||||||||||||
| Lease liabilities | ||||||||||||||||||||
| Operating | Operating lease liabilities, current and long-term portions | $ | $ | |||||||||||||||||
| Financing | ||||||||||||||||||||
| Total lease liabilities | $ | $ | ||||||||||||||||||
Operating lease costs are recorded in a single expense on the statements of operations and allocated to the right-of-use assets and the related lease liabilities as depreciation expense and interest expense, respectively. Lease cost recognized in the consolidated statements of operations for the years ended December 31, 2025 and 2024 is as follows:
| 2025 | 2024 | |||||||||||||
| Finance lease cost | ||||||||||||||
| Amortization of right-of-use assets | $ | $ | ||||||||||||
| Interest on lease liabilities | ||||||||||||||
| Operating lease cost | ||||||||||||||
| Short-term lease cost | ||||||||||||||
| Total lease cost | $ | $ | ||||||||||||
93
SMART SAND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of U.S. dollars, except per share data)
Other information related to the Company’s leasing activity for year ended December 31, 2025 and 2024 is as follows:
| Year ended December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities | ||||||||||||||
| Operating cash flows used for finance leases | $ | $ | ||||||||||||
| Operating cash flows used for operating leases | $ | $ | ||||||||||||
| Financing cash flows used for finance leases | $ | $ | ||||||||||||
| Right-of-use assets obtained in exchange for new finance lease liabilities | $ | $ | ||||||||||||
| Right-of-use assets obtained in exchange for new operating lease liabilities | $ | $ | ||||||||||||
| Weighted average remaining lease term - finance leases | ||||||||||||||
| Weighted average discount rate - finance leases | % | % | ||||||||||||
| Weighted average remaining lease term - operating leases | ||||||||||||||
| Weighted average discount rate - operating leases | % | % | ||||||||||||
Maturities of the Company’s lease liabilities as of December 31, 2025 are as follows:
| Year | Operating Leases | Finance Leases | Total | |||||||||||||||||
| 2026 | $ | $ | $ | |||||||||||||||||
| 2027 | ||||||||||||||||||||
| 2028 | ||||||||||||||||||||
| 2029 | ||||||||||||||||||||
| 2030 | ||||||||||||||||||||
| Thereafter | ||||||||||||||||||||
| Total cash lease payments | ||||||||||||||||||||
| Less: amounts representing interest | ( | ( | ( | |||||||||||||||||
| Total lease liabilities | $ | $ | $ | |||||||||||||||||
94
SMART SAND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of U.S. dollars, except per share data)
NOTE 10 — Asset Retirement Obligation
The Company had a post-closure reclamation and site restoration obligation of $22,472 as of December 31, 2025. The following is a reconciliation of the total reclamation liability for asset retirement obligations.
| Balance at December 31, 2023 | $ | ||||
| Additions and revisions of prior estimates | |||||
| Accretion expenses | |||||
| Balance at December 31, 2024 | $ | ||||
| Additions and revisions of prior estimates | |||||
| Accretion expenses | |||||
| Settlement of liability | ( | ||||
| Balance at December 31, 2025 | $ | ||||
NOTE 11 — Segment Reporting
The Company has two reportable segments, Sand and SmartSystems as of December 31, 2025. The Company evaluates its segment reporting on an ongoing basis and has changed its reporting in the current period and applied that reporting retrospectively to the prior periods presented. The accounting policies for the segments are not different from the accounting policies for the Company. The Company does not currently provide asset information by reportable segment as it does not routinely evaluate the total asset position by segment. The Company’s operations in foreign countries are immaterial. The chief operating decision maker (“CODM”) is Charles Young, the Company’s chief executive officer. The CODM regularly reviews the Company’s GAAP financial statements, as well as the non-GAAP reporting measures when considering the profit and loss of the company and uses this information in deciding how to allocate resources.
The Sand segment includes both frac sand sales and IPS sales. The sand production process begins the same way for each of these revenue streams. Frac Sand consists of four primary sizes of sand, called grades. IPS begins with these same frac sand grades and may contain additional sizes or custom blends of a variety of grades.
The SmartSystems segment revenue is primarily from the rental of our patented SmartSystems equipment and related services provided to customers. This segment offers customers portable wellsite storage and management solutions that enable customers to unload, store, and deliver proppant at the wellsite.
During the year ended December 31, 2025, two of the Company’s customers had revenues of more than 10%. Of these two customers, all had revenues in the Sand segment. Sand segment revenue for the year ended December 31, 2025 includes $4.4 million related to contractual charges for tons sold in excess of certain contractual thresholds in a prior period, which was not recognizable until the current period. Sand segment revenue for the year ended December 31, 2024 includes $4.8 million related to contractual charges for tons sold in excess of certain contractual thresholds.
95
SMART SAND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of U.S. dollars, except per share data)
The following tables present additional segment information for the year ended December 31, 2025 and a reconciliation to amounts on the Consolidated Statement of Operations.
| Sand | SmartSystems | Total | |||||||||||||||
| Revenue | $ | $ | $ | ||||||||||||||
| Segment cost of goods sold | |||||||||||||||||
| Logistics costs | $ | $ | $ | ||||||||||||||
| Production costs | |||||||||||||||||
| Depreciation, depletion, and accretion of asset retirement obligations | |||||||||||||||||
Other costs (1) | |||||||||||||||||
| Total cost of goods sold | $ | $ | $ | ||||||||||||||
| Gross profit | $ | $ | ( | $ | |||||||||||||
| Total operating expenses | |||||||||||||||||
| Total other (expenses), net | ( | ||||||||||||||||
| Income tax (benefit) expense | ( | ||||||||||||||||
| Net income | $ | ||||||||||||||||
| Capital expenditures on property, plant and equipment | $ | $ | |||||||||||||||
(1) Other costs primarily consist of labor and benefits, consumables, equipment‑related costs, maintenance, utilities, and other operational support expenses. | |||||||||||||||||
The following tables present additional segment information for the year ended December 31, 2024 and a reconciliation to amounts on the Consolidated Statement of Operations.
| Sand | SmartSystems | Total | |||||||||||||||
| Revenue | $ | $ | $ | ||||||||||||||
| Segment cost of goods sold | |||||||||||||||||
| Logistics costs | $ | $ | $ | ||||||||||||||
| Production costs | |||||||||||||||||
| Depreciation, depletion, and accretion of asset retirement obligations | |||||||||||||||||
Other costs (1) | |||||||||||||||||
| Total cost of goods sold | $ | $ | $ | ||||||||||||||
| Gross profit | $ | $ | $ | ||||||||||||||
| Total operating expenses | |||||||||||||||||
| Total other (expenses), net | ( | ||||||||||||||||
| Income tax (benefit) expense | ( | ||||||||||||||||
| Net income | $ | ||||||||||||||||
| Capital expenditures on property, plant and equipment | $ | $ | |||||||||||||||
(1) Other costs primarily consist of labor and benefits, consumables, equipment‑related costs, maintenance, utilities, and other operational support expenses. | |||||||||||||||||
96
SMART SAND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of U.S. dollars, except per share data)
The following tables present additional segment information for the year ended December 31, 2023 and a reconciliation to amounts on the Consolidated Statement of Operations.
| Sand | SmartSystems | Total | |||||||||||||||
| Revenue | $ | $ | $ | ||||||||||||||
| Segment cost of goods sold | |||||||||||||||||
| Logistics costs | $ | $ | $ | ||||||||||||||
| Production costs | |||||||||||||||||
| Depreciation, depletion, and accretion of asset retirement obligations | |||||||||||||||||
Other costs (1) | |||||||||||||||||
| Total cost of goods sold | $ | $ | $ | ||||||||||||||
| Gross profit | $ | $ | $ | ||||||||||||||
| Total operating expenses | |||||||||||||||||
| Total other (expenses), net | ( | ||||||||||||||||
| Income tax (benefit) expense | ( | ||||||||||||||||
| Net income | $ | ||||||||||||||||
| Capital expenditures on property, plant and equipment | $ | $ | |||||||||||||||
(1) Other costs primarily consist of labor and benefits, consumables, equipment‑related costs, maintenance, utilities, and other operational support expenses. | |||||||||||||||||
The following table presents revenue by geographic location, based on the country in which delivery to the customer occurred for the years ended December 31, 2025, 2024 and 2023:
| 2025 | 2024 | 2023 | |||||||||||||||
| United States | $ | $ | $ | ||||||||||||||
| Canada | |||||||||||||||||
| Total Revenue | $ | $ | $ | ||||||||||||||
NOTE 12 — Concentrations
As of December 31, 2025, four customers accounted for 57 % of the Company’s total accounts and unbilled receivables. As of December 31, 2024, four customers accounted for 84 % of the Company’s total accounts and unbilled receivables.
During the year ended December 31, 2025, 39 % of the Company’s revenues were earned from two customers. During the years ended December 31, 2024 and 2023, 56 % and 42 % of the Company’s revenues were earned from three and two customers, respectively.
As of December 31, 2025, two vendors accounted for 24 % of the Company’s accounts payable. As of December 31, 2024, one vendor accounted for 17 % of the Company’s accounts payable.
During the year ended December 31, 2025, three vendors accounted for 43 %, of the Company’s cost of goods sold. During the year ended December 31, 2024 and 2023, two and two vendors accounted for 35 % and 32 %, respectively, of the Company’s cost of goods sold.
The Company’s primary product is Northern White frac sand and its mining operations are limited to Wisconsin and Illinois. There is a risk of loss if there are significant environmental, legal or economic changes to this geographic area.
97
SMART SAND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of U.S. dollars, except per share data)
NOTE 13 — Stock-Based Compensation and other Equity-Related Matters
Equity Incentive Plan
In November 2016, in connection with its initial public offering, the Company adopted the 2016 Omnibus Incentive Plan (“2016 Plan”) which provides for the issuance of Awards (as defined in the 2016 Plan) of up to a maximum of 3,911 shares of the Company’s common stock to employees, non-employee members of the Board and consultants of the Company. On April 3, 2020, the Company’s Board adopted an amendment to the 2016 Plan to increase the available shares of common stock authorized for issuance by an additional 2,088 shares. On April 22, 2022, the Company’s board of directors adopted an amendment to the 2016 Plan to increase the available shares of common stock authorized for issuance by an additional 3,900 shares. The awards can be issued in the form of incentive stock options, non-qualified stock options or restricted stock.
During 2025, there were 2,083 shares of restricted stock issued under 2016 Plan. During 2024 and 2023, 2,396 and 810 shares of restricted stock were issued under the 2016 Plan, respectively. The grant date fair value of all restricted stock outstanding during the year ended December 31, 2025 was between $1.65 and $3.53 per share. The shares issued in 2025, vest over to four years from their respective grant dates and their grant date fair value was the actual market price of the Company’s shares. The total number of shares and their respective values that vested during the years ended December 31, 2025, 2024 and 2023 were 1,133 at $2,537 , 753 at $1,542 and 721 at $1,282 , respectively.
The Company recognized $3,699 , $3,216 and $3,507 of compensation expense for the restricted stock during 2025, 2024 and 2023, respectively, in cost of goods sold and operating expenses on the consolidated statements of operations. At December 31, 2025, the Company had unrecognized compensation expense of $5,930 related to granted but unvested stock awards. That expense is expected to be recognized as follows:
| Year Ended December 31, | |||||
| 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| $ | |||||
The following table summarizes restricted stock activity under the 2016 Plan from January 1, 2024 through December 31, 2025:
Number of Shares | Weighted Average | ||||||||||
| Unvested, January 1, 2024 | $ | ||||||||||
| Granted | $ | ||||||||||
| Vested | ( | $ | |||||||||
| Forfeiture | ( | $ | |||||||||
| Unvested, December 31, 2024 | $ | ||||||||||
| Granted | $ | ||||||||||
| Vested | ( | $ | |||||||||
| Forfeiture | ( | $ | |||||||||
| Unvested December 31, 2025 | $ | ||||||||||
Employee Stock Purchase Plan
Shares of the Company’s common stock may be purchased by eligible employees under the Company’s 2016 Employee Stock Purchase Plan in six-month intervals at a purchase price equal to 85 % of the lesser of the fair market value of the
98
SMART SAND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of U.S. dollars, except per share data)
Company’s common stock on either the first day or the last day of each six-month offering period. Employee purchases may not exceed 20 % of their gross compensation during an offering period.
Share Repurchase Programs
On October 3, 2024, the Company’s board of directors approved an eighteen‑month share repurchase program authorizing the repurchase of up to $10.0 million of its ordinary shares (the “Repurchase Program”). On February 23, 2026, the Company’s board of directors approved a subsequent share repurchase program authorizing the repurchase of up to an additional $20.0 million of its outstanding shares, which will take effect on April 4, 2026, following completion of the prior program, and will continue through April 3, 2028. Under these programs, the Company may repurchase shares from time to time in amounts, at prices, and at such times as the Company deems appropriate, subject to market conditions, applicable legal requirements, and other considerations. Repurchases may be made in the open market, through privately negotiated transactions, accelerated or structured repurchase programs, or other means. The Repurchase Program does not obligate the Company to acquire any particular amount of shares and may be modified, suspended, or discontinued at any time at the Company’s discretion.
99
SMART SAND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of U.S. dollars, except per share data)
NOTE 14 — Income Taxes
The provision for income taxes consists of the following:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current | |||||||||||||||||
| Federal | $ | ( | $ | ( | $ | ( | |||||||||||
| State and local | ( | ||||||||||||||||
| Foreign | |||||||||||||||||
| Total current (benefit) expense | ( | ( | |||||||||||||||
| Deferred | |||||||||||||||||
| Federal | ( | ( | ( | ||||||||||||||
| State and local | ( | ( | ( | ||||||||||||||
| Foreign | |||||||||||||||||
| Total deferred income tax benefit | ( | ( | ( | ||||||||||||||
| Total income tax benefit | $ | ( | $ | ( | $ | ( | |||||||||||
In December 2023, the FASB issued ASU 2023-09, Income Taxes, which updates various disclosures including enhancing the income tax rate reconciliation and income taxes paid disclosures by requiring greater disaggregation of information. The Company adopted ASU 2023-09 on a prospective basis for the year ended December 31, 2025. As this accounting standard only impacts disclosures, it did not have an impact on the Company’s consolidated financial results.
Income tax expense differs from the amounts computed by applying the statutory income tax rates to pretax income. The statutory income tax rates were 21% for the year ended December 31, 2025, 2024 and 2023. The reconciliation from the applicable statutory income tax rate to the income tax (benefit) expense is as follows:
| Year Ended December 31, 2025 | |||||||||||
| Amount | Percent of Pre-Tax Income | ||||||||||
| $ | ( | % | |||||||||
| Tax credits | |||||||||||
| Fuel tax credits | ( | % | |||||||||
| Other | ( | % | |||||||||
| Nontaxable and nondeductible items | |||||||||||
| Depletion | ( | % | |||||||||
| Share-based compensation | ( | % | |||||||||
| Section 162(m) disallowance | ( | % | |||||||||
| Other | ( | % | |||||||||
| Change in valuation allowances | ( | % | |||||||||
Domestic state and local income taxes, net of federal effect (1) | ( | % | |||||||||
| Change in unrecognized tax benefits | ( | % | |||||||||
| Other | |||||||||||
| Provision to return permanent difference | % | ||||||||||
| Total income tax (benefit) expense | $ | ( | % | ||||||||
| (1) In 2025, state and local income taxes in Pennsylvania, North Dakota and West Virginia comprise the majority of the domestic state and local income taxes, net of the federal effect category. | |||||||||||
100
SMART SAND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of U.S. dollars, except per share data)
| 2024 | 2023 | ||||||||||
| At statutory rate | $ | $ | ( | ||||||||
| State taxes, net of U.S. federal benefit | ( | ( | |||||||||
| Foreign taxes | |||||||||||
| Federal tax deductions | ( | ( | |||||||||
| Change in applicable tax rate | ( | ||||||||||
| Provision to return permanent difference | ( | ||||||||||
| R&D credits | ( | ( | |||||||||
| Fuel tax credit | ( | ( | |||||||||
| Unrecognized tax benefits | |||||||||||
| NOL carryback/carryforward | ( | ||||||||||
| Nondeductible asset basis | ( | ||||||||||
| Compensation deduction limitation | |||||||||||
| Total income tax benefit | $ | ( | $ | ( | |||||||
Deferred income taxes reflect the net tax effects of loss and credit carry-forwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
Significant components of the Company’s deferred tax assets for federal and state income taxes are as follows:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Reserves and accruals | $ | $ | |||||||||
| Prepaid expenses and other | |||||||||||
| Federal net operating losses | |||||||||||
| State net operating losses | |||||||||||
| Operating lease liabilities | |||||||||||
| Total gross deferred tax assets | |||||||||||
| Less valuation allowance | ( | ( | |||||||||
| Total net deferred tax assets | |||||||||||
| Deferred tax liabilities: | |||||||||||
| Depreciation and amortization | ( | ( | |||||||||
| Foreign net operating losses | ( | ( | |||||||||
| Operating lease right-of-use assets | ( | ( | |||||||||
| Total deferred tax liabilities | ( | ( | |||||||||
| Deferred tax liabilities, long-term, net | $ | ( | $ | ( | |||||||
In assessing the realizability of deferred tax assets, the Company considered whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. A valuation allowance should be recorded if, based on the weight of all positive and negative evidence, it is more likely than not that some portion or all of a deferred tax asset will not be related. At December 31, 2025 and December 31, 2024, the Company determined it was more likely than not that it will not be able to fully realize the benefits of certain existing deductible temporary differences and has recorded a partial valuation allowance against the gross deferred tax assets on its consolidated balance sheet in the amount of $1,886 and $2,156 , respectively. As of December 31, 2024, the Company’s U.S. federal net operating loss carryforwards may be carried forward indefinitely and the majority or its state net operating loss carryforwards and federal tax credits will expire at various dates from December 31, 2032 through December 31, 2044 with the remaining being carried forward indirectly.
101
SMART SAND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of U.S. dollars, except per share data)
The Company has recorded a liability of $630 and $2,240 for unrecognized tax benefits for uncertain tax positions included on its consolidated balance sheet as of December 31, 2025 and 2024, respectively. The liability for unrecognized tax benefits would change the effective tax rate if recognized. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
| Unrecognized tax benefits | ||||||||
| Balance at December 31, 2023 | $ | |||||||
| Additions based on prior year positions | ||||||||
| Decreases due to settlements and /or reduction in reserves | ||||||||
| Balance at December 31, 2024 | $ | |||||||
| Additions based on prior year positions | ||||||||
| Decreases due to settlements and /or reduction in reserves | ( | |||||||
| Balance at December 31, 2025 | $ | |||||||
The Company has (received) income taxes for the year ended December 31, 2025 as follows:
| Year Ended December 31, | |||||
| 2025 | |||||
| Federal | $ | ||||
| State and local | ( | ||||
| Foreign | |||||
| Cash (received) for income taxes | $ | ( | |||
On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (the “OBBBA”), which extends certain business tax provisions of the 2017 Tax Cuts and Jobs Act. These provisions include the reinstatement of 100% bonus depreciation for qualifying property, full and immediate expensing of domestic research and development expenditures, and the use of EBITDA, rather than EBIT, in calculating adjusted taxable income for purposes of the interest deduction limitation. The OBBBA did not have a material impact on the Company’s effective tax rate for the year ended December 31, 2025.
NOTE 15 — Retirement Benefits
U.S. Defined Contribution Plan
102
SMART SAND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of U.S. dollars, except per share data)
NOTE 16 — Commitments and Contingencies
Future Minimum Commitments
The Company is obligated under certain contracts for minimum payments for the right to use land for extractive activities, which is not within the scope of leases under ASC 842. Future minimum annual commitments under such contracts at December 31, 2025 are as follows:
| 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total future minimum annual commitments under these obligations | $ | ||||
Litigation
In addition to the matters described below, the Company may be subject to various legal proceedings, claims and governmental inspections, audits or investigations arising out of our operations in the normal course of business, which cover matters such as general commercial, governmental and trade regulations, product liability, environmental, intellectual property, employment and other actions. Although the outcomes of these routine claims cannot be predicted with certainty, in the opinion of management, the ultimate resolution of these matters will not have a material adverse effect on our financial statements.
Cory Berg, et al. v. Hi-Crush Blair LLC, LLC et al., Case No. 2019-cv-65, Trempealeau County, Wisconsin
Leland Drangstveit, et al. v. Hi-Crush Blair, LLC, et al., Case No. 2019-cv-66, Trempealeau County, Wisconsin
On April 22, 2019 and September 29, 2021, Cory Berg, et al. and Leland Drangstveit, et al., respectively (collectively, the “Plaintiffs”), filed complaints and an amended complaint in separate actions against Blair, certain of its subcontractors and its and their respective insurance companies in the Circuit Court of the State of Wisconsin in and for Trempealeau County (Case Nos. 19-CV-65 and 19-CV-66, respectively). The Plaintiffs allege that Blair and its subcontractors were negligent and created a nuisance by, among other things, generating excessive noise, light and dust. The Plaintiffs are seeking unspecified monetary damages and other relief. The insurance companies included as defendants have asserted counterclaims seeking declarations as to their rights and liabilities under their respective applicable commercial general liability insurance policies. HCR has agreed under the Purchase Agreement to indemnify the Company for any actions or omissions of HCR or its affiliates (including Blair) that occurred prior to the closing of the Company’s acquisition of Blair. In late August, several of the defendants, including Blair, agreed to settlement terms with the Plaintiffs. The parties finalized settlement paperwork in February 2025 and the matter is closed.
Bonds
103
SMART SAND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands of U.S. dollars, except per share data)
NOTE 17 — Supplemental Disclosures of Cash Flow information
Supplemental disclosures regarding cash flow information and non-cash investing and financing activities are as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Cash paid for interest | $ | $ | $ | ||||||||||||||
| Cash (received) paid for income taxes | $ | ( | $ | ( | $ | ||||||||||||
| Non-cash investing activities: | |||||||||||||||||
| Additions to asset retirement obligations | $ | $ | $ | ||||||||||||||
| Non-cash financing activities: | |||||||||||||||||
| Equipment purchased with debt | $ | $ | $ | ||||||||||||||
| Capitalized expenditures in accounts payable and accrued expenses | $ | $ | $ | ||||||||||||||
| Treasury stock purchased with debt | $ | $ | $ | ||||||||||||||
104
ITEM 9. — CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE
None.
ITEM 9A. — CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of such date, our disclosure controls and procedures were effective.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control over financial reporting is a process designed under the supervision of our Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not detect or prevent misstatements. Also, projections of any evaluation of the effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
As of December 31, 2025, our management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. Based on its assessment, management determined that we maintained effective internal control over financial reporting as of December 31, 2025.
Our independent registered public accounting firm is not yet required to formally attest to the effectiveness of our internal controls over financial reporting, and will not be required to do so for as long as we are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act.
Changes in Internal Controls Over Financial Reporting
There have been no changes in our internal control over financial reporting for the three months ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Effective July 1, 2024, the Company upgraded its enterprise management and accounting system. Management has maintained its control environment during this transition through risk evaluation, monitoring, communication and separation of duties. Detective and preventative controls have been maintained or enhanced in the new system. We will continue to evaluate whether there are changes that materially affect or are reasonably likely to have materially affected, our internal control over financial reporting.
ITEM 9B. — OTHER INFORMATION
Information Required to be Disclosed on Form 8-K for the Fiscal Quarter Ended December 31, 2025, But Not Reported.
None.
Trading Plans of Directors and Officers
During the three months ended December 31, 2025, none of our directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) informed us of the adoption termination
105
ITEM 9C. — DISCLOSURES REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None.
106
PART III
ITEM 10. — DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by this item with respect to directors and corporate governance will be set forth under “Proposal No. 1: Election of Directors” in the 2026 Proxy Statement and is incorporated herein by reference.
The information required by this item with respect to executive officers of Smart Sand, Inc., pursuant to instruction 3 of paragraph (b) of Item 401 of Regulation S-K, is set forth following Part I, Item 1 of this Annual Report on Form 10-K under “Executive Officers of the Registrant”.
The information required by this item regarding Section 16(a) beneficial ownership reporting compliance will be set forth under “Section 16(a) Beneficial Ownership Reporting Compliance” in the 2026 Proxy Statement and is incorporated herein by reference.
The Company has adopted an Insider Trading Compliance Policy that governs the purchase, sale, and/or other dispositions of our securities by directors, officers, and employees that is reasonably designed to promote compliance with insider trading laws, rules and regulations and NASDAQ listing standards. A copy of our Insider Trading Compliance Policy is filed as Exhibit 19.1 to this report.
ITEM 11. — EXECUTIVE COMPENSATION
The information required by this item will be set forth under “Executive Compensation” in the 2026 Proxy Statement and is incorporated herein by reference.
ITEM 12. — SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The Equity Compensation Plan Information table required pursuant to Item 201(d) of Regulation S-K will be set forth in the 2026 Proxy Statement and is incorporated herein by reference.
The information required by Item 403 of Regulation S-K regarding security ownership of certain beneficial owners and management will be set forth under “Principal Stockholders” in the 2026 Proxy Statement and is incorporated herein by reference.
ITEM 13. — CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by this item will be set forth under “Certain Relationships and Transactions with Related Persons” and “Corporate Governance” in the 2026 Proxy Statement and is incorporated herein by reference.
ITEM 14. — PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this item will be set forth under “Ratification of the Selection of Grant Thornton LLP as the Company’s Independent Registered Public Accounting Firm for the Year Ending December 31, 2026” in the 2026 Proxy Statement and is incorporated herein by reference.
107
PART IV
ITEM 15. — EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)Financial Statements
(1)The Consolidated Financial Statements are included in Part II, Item 8 of this Annual Report on Form 10-K.
(2)Financial Statement Schedules:
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
| Balance at Beginning of the Year | Charged to cost and expenses | Additions (Deductions) | Balance at End of the Year | |||||||||||||||||||||||
| Year Ended December 31, 2024 | ||||||||||||||||||||||||||
| Deferred tax asset valuation allowance | $ | $ | $ | $ | ||||||||||||||||||||||
| Year Ended December 31, 2025 | ||||||||||||||||||||||||||
| Deferred tax asset valuation allowance | $ | $ | $ | ( | $ | |||||||||||||||||||||
(b)Exhibits
| 2.1 | ||||||||
| 2.2 | ||||||||
| 3.1 | ||||||||
| 3.2 | ||||||||
| 4.1 | ||||||||
| 4.2 | ||||||||
| 4.3* | ||||||||
| 10.1† | ||||||||
| 10.2† | ||||||||
| 10.3† | ||||||||
| 10.4† | ||||||||
| 10.5 | ||||||||
| 10.6 | ||||||||
108
| 10.7 | ||||||||
| 10.8 | ||||||||
| 10.9 | ||||||||
| 10.10 | Amendment No. 1 to Credit Agreement and Guarantee and Collateral Agreement, by and among the Company, the subsidiary borrowers and guarantors party thereto, the lenders party thereto, and First-Citizens Bank & Trust Company, as agent for the lenders (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 22, 2025) | |||||||
| 10.11* | ||||||||
| 10.12* | ||||||||
| 10.13* | ||||||||
| 19.1 | ||||||||
| 21.1* | ||||||||
| 23.1* | ||||||||
| 23.2* | ||||||||
| 31.1* | ||||||||
| 31.2* | ||||||||
32.1*t | ||||||||
32.2*t | ||||||||
| 95.1* | ||||||||
| 97.1 | ||||||||
| 101.INS* | XBRL Instance Document | |||||||
| 101.SCH* | XBRL Taxonomy Extension Schema | |||||||
| 101.CAL* | XBRL Taxonomy Extension Calculation Linkbase | |||||||
| 101.DEF* | XBRL Taxonomy Extension Definition Linkbase | |||||||
| 101.LAB* | XBRL Taxonomy Extension Label Linkbase | |||||||
| 101.PRE* | XBRL Taxonomy Extension Presentation Linkbase | |||||||
| 104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||
| * | Filed herewith | ||||
| † | Compensatory plan, contract or arrangement. | ||||
| ‡ | Certain portions have been omitted pursuant to a confidential treatment request. Omitted information has been separately filed with the Securities and Exchange Commission. | ||||
| t | This certification is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended or the Exchange Act. | ||||
ITEM 16. — FORM 10-K SUMMARY
None.
109
Signatures
Date: February 26, 2026
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| /s/ Charles E. Young | /s/ Lee E. Beckelman | |||||||
| Charles E. Young, | Lee E. Beckelman | |||||||
| Director and Chief Executive Officer | Chief Financial Officer | |||||||
| (Principal Executive Officer) | (Principal Financial Officer) | |||||||
| /s/ Christopher Green | /s/ Frank Porcelli | |||||||
| Christopher Green | Frank Porcelli | |||||||
| Controller and Vice President of Accounting | Director | |||||||
| (Principal Accounting Officer) | ||||||||
| /s/ Andrew Speaker | /s/ Sharon Spurlin | |||||||
| Andrew Speaker | Sharon Spurlin | |||||||
| Director | Director | |||||||
| (Chairman of the Board) | ||||||||
| /s/ Timothy J. Pawlenty | ||||||||
| Timothy J. Pawlenty | ||||||||
| Director | ||||||||
110
Exhibit 4.3
DESCRIPTION OF THE COMPANY’S CAPITAL STOCK REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934
The following description of our capital stock registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to the complete text of our Second Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) and our Second Amended and Restated Bylaws (the “Bylaws”), each of which are incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.3 is a part. We encourage you to read our Certificate of Incorporation, our Bylaws and the applicable provisions of the General Corporation Law of the State of Delaware (the “DGCL”), Title 8 of the Delaware Code for additional information.
The authorized capital stock of Smart Sand, Inc. consists of 350,000,000 shares of common stock, $0.001 par value per share (“common stock”), and 10,000,000 shares of preferred stock, $0.001 par value per share (“preferred stock”). Our preferred stock is not registered pursuant to Section 12 of the Exchange Act.
As of February 19, 2026, 52,399,996 shares of common stock were issued and 43,538,189 shares of common stock were outstanding.
Common Stock
Dividend Rights
Subject to the rights of any holders of any outstanding shares or series of preferred stock, holders of common stock are entitled to the payment of dividends when and as declared by our board of directors in accordance with applicable law and to receive other distributions.
Voting Rights
Except as provided by law or in a preferred stock designation, holders of common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders, have the exclusive right to vote for the election of directors and do not have cumulative voting rights. Except as otherwise required by law, holders of common stock are not entitled to vote on any amendment to the Certificate of Incorporation (including any certificate of designations relating to any series of preferred stock) that relates solely to the terms of any outstanding series of preferred stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to the Certificate of Incorporation (including any certificate of designations relating to any series of preferred stock) or pursuant to the DGCL.
Liquidation Rights
Subject to the rights of any holders of any outstanding shares or series of preferred stock, in the event of any liquidation, dissolution or winding up of our affairs, whether voluntary or involuntary, our funds and assets, to the extent they may be legally distributed to holders of common stock, shall be distributed among the holders of the then outstanding common stock pro rata in accordance with the number of shares of common stock held by each such holder.
Other Rights and Preferences
All outstanding shares of common stock are fully paid and non-assessable. The holders of common stock have no pre-emptive or other subscription rights.
Classification of the Board of Directors
Our Certificate of Incorporation divide our board of directors into three classes, as nearly equal in number as possible, with staggered three-year terms. Subject to our stockholders agreement, under our Certificate of Incorporation and our Bylaws, any vacancy on our board of directors, including a vacancy resulting from an enlargement of our board of directors, may be filled only by the affirmative vote of a majority of our directors then in office, even though less than a quorum of the board of directors.
Listing
Our common stock is traded on the NASDAQ Global Select Market under the symbol, “SND.”
Anti-Takeover Effects of Provisions of Our Certificate of Incorporation and our Bylaws
Provisions of our Certificate of Incorporation and Bylaws may delay or discourage transactions involving an actual or potential change in control or change in our management, including transactions in which stockholders might otherwise receive a premium for their shares, or transactions that our stockholders might otherwise deem to be in their best interests. Therefore, these provisions could adversely affect the price of our common stock.
Among other things our Certificate of Incorporation and Bylaws:
•establish advance notice procedures with regard to stockholder proposals relating to the nomination of candidates for election as directors or new business to be brought before meetings of our stockholders. These procedures provide that notice of stockholder proposals must be timely given in writing to our corporate secretary prior to the meeting at which the action is to be taken. Generally, to be timely, notice must be received at our principal executive offices not less than 90 days nor more than 120 days prior to the first anniversary date of the annual meeting for the preceding year. Our Bylaws specify the requirements as to form and content of all stockholders’ notices. These requirements may preclude stockholders from bringing matters before the stockholders at an annual or special meeting;
•provide our board of directors the ability to authorize undesignated preferred stock. This ability makes it possible for our board of directors to issue, without stockholder approval, preferred stock with voting or other rights or preferences that could impede the success of any attempt to change control of us. These and other provisions may have the effect of deferring hostile takeovers or delaying changes in control or management of our company;
•provide that our board of directors will be divided into three classes, as nearly equal in number as possible, with staggered three-year terms;
•subject to the stockholders agreement, provide that the size of our board of directors may be changed only by resolution of the board of directors;
•subject to the stockholders agreement, provide that all vacancies, including newly created directorships, shall, except as otherwise required by law or, if applicable, the rights of holders of a series of preferred stock, be filled exclusively by the affirmative vote of a majority of directors then in office, even if less than a quorum;
•provide that any action required or permitted to be taken by the stockholders must be effected at a duly called annual or special meeting of stockholders and may not be effected by any consent in writing in lieu of a meeting of such stockholders, subject to the rights of the holders of any series of preferred stock with respect to such series;
•provide that our stockholders may only amend or repeal our Bylaws with the affirmative vote of at least 66 2/3% of the voting power of the outstanding shares of our stock entitled to vote;
•provide that special meetings of our stockholders may only be called by the board of directors (except that certain stockholders (each, a “Principal Stockholder”) may also call special meetings of our stockholders so long as such Principal Stockholder beneficially owns at least 20% of the voting power of the outstanding shares of our stock);
•provide that our stockholders may only amend our Certificate of Incorporation with the affirmative vote of at least 66 2/3% of the voting power of the outstanding shares of our stock entitled to vote;
•provide that, subject to the rights of the preferred stockholders and the stockholders agreement, if any, any director may be removed only upon the affirmative vote of the holders of at least 66 2/3% of the voting power of the outstanding shares of our stock entitled to vote; and
•provide that our Bylaws can be amended or repealed by the board of directors.
TECHNICAL REPORT SUMMARY FRAC SAND RESOURCES AND RESERVES OAKDALE MINE Monroe County, Wisconsin Prepared For SMART SAND, INC. Yardley, Pennsylvania By John T. Boyd Company Mining and Geological Consultants Pittsburgh, Pennsylvania, USA Report No. 3555.026 FEBRUARY 2026
John T. Boyd Company Mining and Geological Consultants February 23, 2026 File: 3555.026 Smart Sand, Inc. 1000 Floral Vale Blvd., Ste 225 Yardley, PA 19067 Attention: Mr. Christopher Green Vice President of Accounting and Principal Accounting Officer Subject: Technical Report Summary Frac Sand Resources and Reserves Oakdale Mine Monroe County, Wisconsin Ladies and Gentlemen: The John T. Boyd Company (BOYD) was retained by Smart Sand, Inc. (Smart Sand) to independently prepare estimates of mineral resources and mineral reserves— hereafter referred to as frac sand resources and frac sand reserves, respectively—for the Oakdale Mine (or “Oakdale”) as of December 31, 2025. This Technical Report Summary (TRS) has been prepared to support Smart Sand’s disclosure of the subject frac sand resources and frac sand reserves in accordance with Subpart 1300 and Item 601(b)(96) of Regulation S-K (collectively, “S-K 1300”) as adopted by the U.S. Securities and Exchange Commission’s (SEC) on October 31, 2018. Respectfully submitted, JOHN T. BOYD COMPANY By: Ronald L. Lewis Managing Director and COO Q:\ENG_WP\3555.026 SS - Oakdale FY25\WP\Report\Cover Letter.docx Chairman James W. Boyd President John T. Boyd II CEO Carlos F. Barrera Managing Director and COO Ronald L. Lewis Vice Presidents Robert J. Farmer Jisheng (Jason) Han John L. Weiss Michael F. Wick William P. Wolf Managing Director - Australia Jacques G. Steenekamp Managing Director - China Rongjie (Jeff) Li Managing Director – South America Carlos F. Barrera Pittsburgh 4000 Town Center Boulevard, Suite 300 Canonsburg, PA 15317 (724) 873-4400 (724) 873-4401 Fax jtboydp@jtboyd.com Denver (303) 293-8988 jtboydd@jtboyd.com Brisbane 61 7 3232-5000 jtboydau@jtboyd.com Beijing 86 10 6500-5854 jtboydcn@jtboyd.com Bogota +57-3115382113 jtboydcol@jtboyd.com www.jtboyd.com
JOHN T. BOYD COMPANY TABLE OF CONTENTS Page LETTER OF TRANSMITTAL TABLE OF CONTENTS GLOSSARY AND ABBREVIATIONS 1.0 EXECUTIVE SUMMARY ............................................................................. 1-1 1.1 Introduction ....................................................................................... 1-1 1.2 Property Description and Location ................................................... 1-2 1.3 Geology ............................................................................................. 1-2 1.4 Exploration ........................................................................................ 1-4 1.5 Frac Sand Reserves ......................................................................... 1-5 1.6 Operations ......................................................................................... 1-6 1.6.1 Mining .................................................................................... 1-6 1.6.2 Processing ............................................................................ 1-7 1.6.3 Infrastructure ......................................................................... 1-7 1.7 Financial Analysis ............................................................................. 1-8 1.7.1 Market Analysis ..................................................................... 1-8 1.7.2 Capital and Operating Costs ................................................. 1-8 1.7.3 Economic Analysis ................................................................. 1-9 1.8 Regulations and Liabilities .............................................................. 1-10 1.9 Conclusions ..................................................................................... 1-10 2.0 INTRODUCTION .......................................................................................... 2-1 2.1 Registrant .......................................................................................... 2-1 2.2 Purpose and Terms of Reference .................................................... 2-1 2.3 Expert Qualifications ......................................................................... 2-2 2.4 Principal Sources of Information ....................................................... 2-3 2.4.1 Personal Inspections ............................................................ 2-4 2.4.2 Reliance on Information Provided by the Registrant ............ 2-4 2.4.3 Verification of Information ..................................................... 2-5 2.4.4 Other Relevant Data and Information ................................... 2-5 2.5 Report Version .................................................................................. 2-5 2.6 Units of Measure ............................................................................... 2-6
TABLE OF CONTENTS - Continued Page JOHN T. BOYD COMPANY 3.0 PROPERTY OVERVIEW ............................................................................. 3-1 3.1 Description and Location .................................................................. 3-1 3.2 History ............................................................................................... 3-1 3.3 Property Control ................................................................................ 3-2 3.4 Adjacent Properties ........................................................................... 3-2 3.5 Regulation and Liabilities .................................................................. 3-2 3.6 Accessibility, Local Resources, and Infrastructure .......................... 3-3 3.7 Physiography .................................................................................... 3-3 3.8 Climate .............................................................................................. 3-4 4.0 GEOLOGY .................................................................................................... 4-1 4.1 Regional Geology ............................................................................. 4-1 4.2 Property Geology .............................................................................. 4-1 4.2.1 General Stratigraphy ............................................................. 4-1 4.2.2 Structural Geology ................................................................ 4-3 4.3 Frac Sand Geology ........................................................................... 4-5 5.0 EXPLORATION DATA ................................................................................. 5-1 5.1 Background ....................................................................................... 5-1 5.2 Exploration Procedures .................................................................... 5-1 5.2.1 Drilling and Sampling ............................................................ 5-1 5.2.2 Frac Sand Testing .................................................................. 5-2 5.2.3 Other Exploration Methods ................................................... 5-3 5.3 Laboratory Testing Results ............................................................... 5-3 5.3.1 Grain Size Distribution ........................................................... 5-3 5.3.2 Grain Shape (Sphericity and Roundness) ............................ 5-3 5.3.3 Acid Solubility ........................................................................ 5-4 5.3.4 Turbidity ................................................................................ 5-4 5.3.5 Crush Resistance .................................................................. 5-4 5.3.6 Quality Summary ................................................................... 5-4 5.4 Data Verification ................................................................................ 5-5 6.0 FRAC SAND RESOURCES AND RESERVES ....................................... 6-1 6.1 Applicable Standards and Definitions ............................................... 6-1 6.2 Frac Sand Resources ....................................................................... 6-2 6.2.1 Methodology .......................................................................... 6-2 6.2.2 Classification ......................................................................... 6-4 6.2.3 Estimation Criteria ................................................................. 6-5 6.2.4 Frac Sand Resource Estimate .............................................. 6-6 6.2.5 Validation .............................................................................. 6-6 6.3 Frac Sand Reserves ......................................................................... 6-6 6.3.1 Methodology .......................................................................... 6-6 6.3.2 Classification ......................................................................... 6-7 6.3.3 Frac Sand Reserve Estimate ................................................ 6-9 6.3.4 Significant Risks and Uncertainties .................................... 6-10 6.3.5 Reconciliation with Previous Estimates .............................. 6-10
TABLE OF CONTENTS - Continued Page JOHN T. BOYD COMPANY 7.0 MINING OPERATIONS .............................................................................. 7-1 7.1 Mining Method .................................................................................. 7-1 7.2 Mine Schedule, Equipment, and Staffing ......................................... 7-2 7.3 Engineering and Planning ................................................................. 7-3 7.4 Mining Sequence and Production .................................................... 7-3 7.5 Mining Risks ...................................................................................... 7-4 8.0 PROCESSING OPERATIONS ................................................................... 8-1 8.1 Processing Method ........................................................................... 8-1 8.1.1 Wet Plant ............................................................................. 8-2 8.1.2 Decant/Dry Plant .................................................................. 8-2 8.1.3 Storage and Loadout ............................................................ 8-3 8.2 Production ......................................................................................... 8-4 8.3 Processing Risks .............................................................................. 8-4 9.0 MINE INFRASTRUCTURE .......................................................................... 9-1 9.1 Overview ........................................................................................... 9-1 9.2 Transportation ................................................................................... 9-1 9.3 Utilities ............................................................................................... 9-1 9.4 Tailings Disposal ............................................................................... 9-2 9.5 Other Structures and Facilities ........................................................ 9-2 10.0 MARKET ANALYSIS ................................................................................ 10-1 10.1 Market Background ......................................................................... 10-1 10.2 Historical Sales ............................................................................... 10-3 10.3 Market Outlook ................................................................................ 10-5 10.4 Market Entry Strategies .................................................................. 10-6 10.5 Future Sales .................................................................................... 10-6 11.0 CAPITAL AND OPERATING COSTS ..................................................... 11-1 11.1 Basis of Capital and Operating Cost Estimates ............................. 11-1 11.2 Capital Expenditures ....................................................................... 11-1 11.2.1 Historical Capital Expenditures .......................................... 11-1 11.2.2 Projected Capital Expenditures ........................................... 11-2 11.3 Operating Costs .............................................................................. 11-2 11.3.1 Historical Operating Costs ................................................... 11-2 11.3.2 Projected Operating Costs .................................................. 11-3 12.0 ECONOMIC ANALYSIS ........................................................................... 12-1 12.1 Approach ......................................................................................... 12-1 12.2 Assumptions and Limitations .......................................................... 12-2 12.3 Financial Model Results ................................................................... 12-3 12.4 Sensitivity Analysis ......................................................................... 12-5
TABLE OF CONTENTS - Continued Page JOHN T. BOYD COMPANY 13.0 PERMITTING AND COMPLIANCE ......................................................... 13-1 13.1 Permitting Requirements and Status .............................................. 13-1 13.2 Environmental Studies .................................................................... 13-2 13.3 Waste Disposal and Water Management ....................................... 13-2 13.4 Compliance ..................................................................................... 13-2 13.5 Plans, Negotiations, or Agreements ............................................... 13-3 13.6 Post-Mining Land Use and Reclamation ........................................ 13-3 13.7 Local Procurement and Hiring ........................................................ 13-3 14.0 INTERPRETATION AND CONCLUSIONS ............................................. 14-1 14.1 Findings ........................................................................................... 14-1 14.2 Significant Risks and Uncertainties ................................................ 14-1 14.3 Recommendations .......................................................................... 14-2
TABLE OF CONTENTS - Continued Page JOHN T. BOYD COMPANY List of Tables 1.1 Oakdale Mine Exploration Drilling Campaign Summary .............................. 1-4 1.2 Oakdale Mine Frac Sand Reserves as of December 31, 2025 ................... 1-5 1.3 Oakdale API/ISO Test Results for the DDH1-10 Composite Sample .......... 1-6 5.1 Oakdale Mine Exploration Drilling Campaign Summary ............................... 5-2 5.2 Weighted Average Particle Size Distribution (% By Mesh Size) ................. 5-3 5.3 Oakdale API/ISO Test Results for the DDH1-10 Composite Sample .......... 5-4 6.1 Oakdale Property Drill Hole Spacing Parameters ........................................ 6-4 6.2 Oakdale Mine Frac Sand Reserves as of December 31, 2025 ................... 6-9 10.1 Historical Sales Data .................................................................................. 10-3 10.2 Frac Sand Sales Forecast .......................................................................... 10-7 11.1 Historical Capital Expenditures ................................................................... 11-1 11.2 Forecasted Capital Expenditures ............................................................... 11-2 11.3 Historical Operating Costs .......................................................................... 11-3 11.4 Forecasted Operating Costs ....................................................................... 11-4 12.1 Financial Results ......................................................................................... 12-3 12.2 Annual Production and Cash Flow Forecast ............................................... 12-4 12.3 DCF-NPV Analysis ...................................................................................... 12-5 12.4 After-Tax NPV12 Sensitivity Analysis ($ millions) ........................................ 12-5 13.1 Oakdale Mine Permit Summary .................................................................. 13-1
TABLE OF CONTENTS - Continued Page JOHN T. BOYD COMPANY List of Figures 1.1 General Location Map .................................................................................. 1-3 4.1 Generalized Stratigraphic Chart, Monroe County, Wisconsin ...................... 4-2 4.2 Cross Section A-A’ ......................................................................................... 4-4 6.1 Relationship Between Frac Sand Resources and Frac Sand Reserves ..... 6-2 6.2 Proven and Probable Reserves ..................................................................... 6-8 6.3 Reconciliation with Previous Frac Sand Reserve Estimate ........................ 6-11 7.1 Western “Bluff” Mining at Oakdale ................................................................ 7-2 8.1 Oakdale Processing Plants and Rail Loadouts ............................................. 8-2 8.2 East Wet 1 and Dry 2 ..................................................................................... 8-3 8.3 East Side Rail Loading Facilities ................................................................... 8-4 10.1 Frac Sand Sales by Mesh Size ................................................................... 10-4 10.2 Frac Sand Sales by Basin/Play ................................................................... 10-4
1 JOHN T. BOYD COMPANY GLOSSARY OF ABBREVIATIONS AND DEFINITIONS 000 : Thousand(s) $ : US dollar(s) AMSL : Above mean sea-level API : American Petroleum Institute API/ISO : API RP 19C/ISO 13503-2, Measurement of Properties of Proppants Used in Hydraulic Fracturing and Gravel-packing Operations BOYD : John T. Boyd Company Constant Dollar : A monetary measure that is not influenced by inflation and used to compare time periods. Sometimes referred to as “real dollars”. CP : Canadian Pacific DCF : Discounted Cash Flow DDA : Depreciation, depletion, and amortization expenses Discount Rate : A rate of return used to discount future cash flows based on the return investors expect to receive from their investment. EBIT : Earnings before interest and taxes EBIAT : Earnings before interest after taxes EBITDA : Earnings before interest, taxes, depreciation, and amortization E&P : Exploration and production EUR : Estimated ultimate recovery – the forecast cumulative quantity of hydrocarbons that can be economically produced from a well, reservoir, or field over its productive lifetime. Frac Sand : Frac sand is a naturally occurring, high silica content quartz sand, with grains that are generally well rounded and exhibit high compressive strength characteristics relative to other silica sand. It is utilized as a prop or “proppant” in unconventional shale frac well completions. Frac Sand Resource : A Frac Sand Resource is a concentration or occurrence of sand material of economic interest in or on the Earth’s crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A Frac Sand Resource is a reasonable estimate of mineralization, taking into account relevant factors such as quality specifications, likely mining dimensions, location or continuity, that, with the assumed and justifiable
2 GLOSSARY OF ABBREVIATIONS AND DEFINITIONS - Continued JOHN T. BOYD COMPANY technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled. Frac Sand Reserve : A Frac Sand Reserve is an estimate of tonnage and grade or quality of Frac Sand Resource that, in the opinion of the qualified person, can be the basis of an economically viable project. More specifically, it is the economically mineable part of a Frac Sand Resource, which includes diluting materials and allowances for losses that may occur when the material is mined or extracted. ft : Feet – a unit of linear measurement equal to 12 inches or 0.3048 meters. Indicated Frac Sand Resource : An Indicated Frac Sand Resource is that part of a Frac Sand Resource for which quantity, grade or quality, densities, shape, and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing, and is sufficient to assume geological and grade or quality continuity between points of observation. An Indicated Frac Sand Resource has a lower level of confidence than that applying to a Measured Frac Sand Resource and may only be converted to a Probable Frac Sand Reserve. Inferred Frac Sand Resource : That part of a Frac Sand Resource for which quantity and quality are estimated based on limited geological evidence and sampling. The level of geological uncertainty associated with an Inferred Frac Sand Resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. Because an Inferred Frac Sand Resource has the lowest level of geological confidence of all Frac Sand Resources, which prevents the application of the modifying factors in a manner useful for evaluation of economic viability, an Inferred Frac Sand Resource may not be considered when assessing the economic viability of a mining project, and may not be converted to a Frac Sand Reserve. IRR : Internal rate-of-return ISO : International Organization for Standardization lb : Pound LOM : Life-of-Mine
3 GLOSSARY OF ABBREVIATIONS AND DEFINITIONS - Continued JOHN T. BOYD COMPANY Measured Frac Sand Resource : A Measured Frac Sand Resource is that part of a Frac Sand Resource for which quantity, grade or quality, densities, shape, and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine planning and final evaluation of the economic viability of the deposit. Geological evidence is derived from detailed and reliable exploration, sampling, and testing and is sufficient to confirm geological and grade or quality continuity between points of observation. A Measured Frac Sand Resource has a higher level of confidence than that applying to either an Indicated Frac Sand Resource or an Inferred Frac Sand Resource. It may be converted to a Proven Frac Sand Reserve or to a Probable Frac Sand Reserve. Mesh : A measurement of particle size often used in determining the size distribution of granular material. In the U.S., standard mesh (or sieve) size is defined as the number of openings in one square inch of a screen. For example, a 36-mesh screen will have 36 openings while a 150-mesh screen will have 150 openings. Since the size of the screen (one square inch) is constant, the higher the mesh number the smaller the screen opening and the smaller the particle that will pass through. The following table provides mesh dimensions which are commonly referenced in frac sand specifications: Mine-gate : The location at which finished product leaves the mine or processing facility, with all mining and processing complete, but prior to transportation or delivery beyond the mine site. With regards to pricing, “mine-gate price” refers to the sales price of finished product at the point of shipment from the mine or processing facility, excluding transportation, storage, handling, and other downstream logistics costs incurred beyond the mine site. Mineral Reserve : See “Frac Sand Reserve” Mesh inches mm microns 20 0.0331 0.850 850 30 0.0232 0.600 600 35 0.0197 0.500 500 40 0.0165 0.425 425 50 0.0117 0.300 300 70 0.0083 0.212 212 100 0.0059 0.180 180 140 0.0041 0.105 105 200 0.0029 0.075 75 Opening Size
4 GLOSSARY OF ABBREVIATIONS AND DEFINITIONS - Continued JOHN T. BOYD COMPANY Mineral Resource : See “Frac Sand Resource” Modifying Factors : The factors that a qualified person must apply to Indicated and Measured Frac Sand Resources and then evaluate to establish the economic viability of Frac Sand Reserves. A qualified person must apply and evaluate modifying factors to convert Measured and Indicated Frac Sand Resources to Proven and Probable Frac Sand Reserves. These factors include, but are not restricted to: mining; processing; metallurgical; infrastructure; economic; marketing; legal; environmental compliance; plans, negotiations, or agreements with local individuals or groups; and governmental factors. The number, type and specific characteristics of the modifying factors applied will necessarily be a function of and depend upon the mineral, mine, property, or project. MSHA : Mine Safety and Health Administration. A division of the U.S. Department of Labor. NTU : Nephelometric turbidity units NPV : Net Present Value NWS : Northern White Sands Probable Frac Sand Reserve : A Probable Frac Sand Reserve is the economically mineable part of an Indicated and, in some circumstances, a Measured Frac Sand Resource. The confidence in the Modifying Factors applying to a Probable Frac Sand Reserve is lower than that applying to a Proven Frac Sand Reserve. Proppant Sand : See “Frac Sand” Proven Frac Sand Reserve : A Proven Frac Sand Reserve is the economically mineable part of a Measured Frac Sand Resource. A Proven Frac Sand Reserve implies a high degree of confidence in the Modifying Factors. psi : Pounds per square inch QP : Qualified Person ROM : Run-of-Mine. The as-mined including in-seam clay partings mined with the sand, and out-of-seam dilution. SEC : U.S. Securities and Exchange Commission S-K 1300 : Subpart 1300 and Item 601(b)(96) of the U.S. Securities and Exchange Commission’s Regulation S-K Smart Sand : Smart Sand, Inc.
5 GLOSSARY OF ABBREVIATIONS AND DEFINITIONS - Continued JOHN T. BOYD COMPANY Surficial : Relating to the earths surface or the geology that is on the surface. Ton : Short Ton. A unit of weight equal to 2,000 pounds tph : Tons per Hour TRS : Technical Report Summary UP : Union Pacific USACE : U.S. Army Corps of Engineers WDATCP : Wisconsin Department of Agriculture, Trade & Consumer Protection WDNR : Wisconsin Department of Natural Resources Q:\ENG_WP\3555.026 SS - Oakdale FY25\WP\Report\Glossary.docx
1-1 JOHN T. BOYD COMPANY 1.0 EXECUTIVE SUMMARY 1.1 Introduction Smart Sand’s Oakdale Mine is an active surface sand mining and processing operation that has been producing various finished frac sand products from the Mount Simon Sandstone Formation since commencing operations in 2012. BOYD was retained by Smart Sand to complete an update to our initial independent technical audit (BOYD Report No. 3555.021A) of frac sand resource and frac sand reserve — for the Oakdale Mine. The purpose of this TRS is threefold: (1) to summarize technical and scientific information for the subject property, (2) to provide the conclusions of our review of the information for the property, and (3) to provide statements of frac sand resources and frac sand reserves for the Oakdale Mine in accordance with the disclosure requirements set forth in Subpart 1300, Item 601(b)(96) of the U.S. Security Exchange’s (SEC) Regulation S-K (S-K 1300). BOYD’s findings are based on our detailed examination of the supporting geologic, technical, and economic information obtained from: (1) data, reports, and other information provided by Smart Sand, (2) existing BOYD work files and reports, (3) discussions with Smart Sand personnel, (4) records on file with regulatory agencies, (5) data, reports, and other information from public sources, and (6) nonconfidential information in BOYD’s possession. Our investigation was performed to obtain reasonable assurance that Smart Sand’s frac sand resource and frac sand reserve statements are free from material misstatement. This report provides results of an update to an initial independent audit concerning Smart Sand’s estimate of the frac sand resources and frac sand reserves underlying their Oakdale, Wisconsin property. The basis for these estimates is a volumetric geologic model of the frac sand resources and frac sand reserves originally completed by Smart Sand in July 2021. Updated site-specific and operational information was provided by Smart Sand to bring this estimate current as of December 31, 2025. Unless otherwise noted, the effective date of the information provided herein, including estimates of frac sand resources and frac sand reserves, is December 31, 2025.
1-2 JOHN T. BOYD COMPANY 1.2 Property Description and Location Smart Sand’s Oakdale Mine is located in Monroe County, Wisconsin. The Oakdale Mine was one of the first frac sand mines in the area, commencing operations in 2012. The mine exploits the Mount Simon Sandstone Formation which generally lies at, or below, the water table. Additionally, Smart Sand mines material from the Wonewoc Formation Sandstone found in the above grade ridges, or “bluffs”, within the western portion of the property. Smart Sand controls approximately 1,256 contiguous acres of property which is reportedly owned fee simple. The general location of the subject property is provided in Figure 1.1, following this page. 1.3 Geology Northern white sands (NWS) are generally located in the north-central portion of the United States (Minnesota, Wisconsin, and Illinois, with lesser amounts in Arkansas and Iowa). NWS is found in poorly cemented Cambrian and Ordovician sandstones and in unconsolidated alluvial deposits locally derived from these sandstones. The Saint Peter, Jordan, Wonewoc, and Mount Simon formations are the primary sources of NWS. A majority of the surface of the Oakdale property is overlain by a veneer of poorly sorted glacial till ranging from a few feet to over 30 ft in depth. The entire Oakdale property is underlain primarily by the Cambrian Age Mount Simon Formation Sandstone, which on a regional basis, ranges in thickness from 300 ft to over 2,000 ft (in Indiana). Total thickness of the Mount Simon Formation within the subject property was not determined as the deepest drill hole (240 ft) was terminated while still in the sandstone formation. The Mount Simon sands can be described as poorly consolidated, poorly sorted, fine-grained, quartz sandstone that are typically white in color, but can show variation to a yellowish-gray or grayish-red. Underlying the Mount Simon Formation is pre-Cambrian age granite. In the above grade ridges (or “bluffs”) located on the western-most portions of the subject property, Wonewoc Formation sands are deposited above the Mount Simon. The Wonewoc is generally somewhat coarser in grain size than the Mount Simon, ranging in thickness locally from 60 ft to 90 ft, and exhibiting similar API quality attributes. Both of these formations are extensively mined and processed at the Oakdale Mine.
1-4 JOHN T. BOYD COMPANY Within the property, the surface topography is predominately flat lying except in the western portion of the property where the surface elevation increases (vertical relief of 125 ft to 150 ft). The size consist of the sand found in the above drainage bluff areas is a coarser mix (Wonewoc Formation) in comparison to the sands found in the alluvial material (Mount Simon Formation) within the below drainage areas. Structure of the mineable deposits on the Oakdale property appears to be flat lying with no evidence of faulting or other distinguishing geologic features. 1.4 Exploration Based on information provided, there have been six different drilling campaigns completed on the Oakdale property. The first drilling campaign commenced in December 2010, and the most recent drilling campaign was completed in 2018. A total of 37 drill holes have been drilled throughout the Oakdale property, with 30 of these drill holes providing sufficient data able to be utilized by Smart Sand in their geologic model, and subsequently by BOYD to verify the Smart Sand model. Seven drill holes were not utilized for various reasons, such as insufficient core recovery, hole abandonment, duplicate confirmatory drilling, or drill holes that had no/insufficient data available. Table 1.1 presents summary information on the various Oakdale property drilling campaigns completed to date. Number of Sand Cores Drill Holes Year Holes Drilled Data Used Thickness (ft) Not Used Reason Not Used 2010 2 - NA 2 Insufficient Core Recovery 2011 13 12 1,581 1 Hole Abandoned 2011-BOYD 3 - NA 3 Duplicated Results 2012 3 2 330 1 No data provided 2016 12 12 1,765 - 2018 4 4 965 - Total 37 30 4,641 7 Table 1.1: Oakdale Mine Exploration Drilling Campaign Summary BOYD reviewed the drilling and sampling methodologies utilized in the various exploration campaigns, including the equipment used and information available regarding the sampling, logging, and field work performed. We note that methodologies and procedures indicate that the data obtained were carefully and professionally collected, prepared, and documented in conformance with generally accepted industry standards. BOYD opines that the work conducted is thorough and complete for purposes of evaluating and estimating frac sand resources and reserves on the Oakdale property.
1-5 JOHN T. BOYD COMPANY 1.5 Frac Sand Reserves This report provides an estimate of frac sand reserves for Smart Sand’s Oakdale Mine in accordance with the requirements set forth in S-K 1300. The estimate was independently audited by BOYD. This report, and previous reports, include a thorough geologic investigation of the property, appropriate modeling of the deposit, development of life-of-mine (LOM) plans, and consideration of the relevant processing, economic (including independent estimates of capital, revenue, and cost), marketing, legal, environmental, socio-economic, and regulatory factors. Smart Sand’s estimated surface mineable frac sand reserves for the Oakdale Mine total 228.3 million saleable product tons, as of December 31, 2025. Table 1.2, below, presents the estimated frac sand Reserve tons by product (size), that are anticipated to be produced at Smart Sand’s Oakdale Mine. The reported reserves include only frac sand which is reportedly owned as of December 31, 2025. It is BOYD’s opinion that extraction of the reported frac sand reserves is technically achievable and economically viable after the consideration of potentially material modifying factors. Projecting finished frac sand product sales of approximately 3.3 million tons per year in 2026, ramping up to a projected 4.0 million tons per year by 2030 and then remaining constant, the operation has an expected LOM of approximately 59 years. Composite samples collected during the drilling of the initial exploration drill holes were tested by Stim-Lab for APIISO frac sand characteristics. Additional testing was performed on the 20/40, 40/70, and 70/140-mesh product sizes, with summarized results presented in Table 1.3, on the following page. Mesh Size Proven Probable Total 30/50 41,931 31,410 73,341 50/140 83,090 71,918 155,008 Total 125,021 103,328 228,349 Table 1.2: Oakdale Mine Frac Sand Reserves as of December 31, 2025 Product Tons (000) by Classification
1-6 JOHN T. BOYD COMPANY The composited sample testing suggests that the Oakdale Mine produces frac sand products which meet minimum API/ISO recommended testing characteristics, and more importantly meets the specifications of their various customers. BOYD notes that the Oakdale Mine has been selling various frac sand sized products to its exploration and production (E&P) and drilling services customers since 2012. 1.6 Operations 1.6.1 Mining The Oakdale Mine property is bisected by the operation’s infrastructure (rail line spur and loadout facility, access roads, offices, and processing plant areas) into separate eastern and western mining areas. The mine has two distinct mining schemes that are employed. The eastern side of the property generally consists of lowlands with some interspersed wetlands. This area served as the initial mining area for approximately the first five to six years of the operation. Typical excavator and articulated truck method is employed in a series of benches reaching to the bottom of mining pits. There is very little overburden present in this portion of the property and the overburden that is removed is utilized to create berms or hauled to a dump area. The sandstone formation is drilled and blasted on a very wide pattern to “fluff” or disaggregate the sand grains prior to excavation. The sand is then loaded into trucks and hauled to a wet process plant located near the center of the property for processing. The active mining pits are continuously dewatered, and the water is pumped into a holding pond at the northeastern portion of the property, where the water is sampled and tested prior to being discharged. Currently, and for the immediate future, the majority of the run-of-mine (ROM) sand is mined from the western side of the property. Here, the higher elevation “bluffs” are mined which generally lie above ground level to approximately 970 ft above mean sea DDH-1-10 Average API/ISO Test Results By Product Size API RP19C API RP19C Result Recommended Result Result Recommended Test 20/40-mesh Specification 40/70-mesh 70/140-mesh* Specification Sphericity 0.8 ≥ 0.6 0.7 0.7 ≥ 0.6 Roundness 0.7 ≥ 0.6 0.7 0.6 ≥ 0.6 Acid Solubility (%) 0.7 ≤ 2.0 0.9 1.3 ≤ 3.0 Turbidity (NTU) 30 ≤ 250 16 16 ≤ 250 K-Value (000 psi) 7 - 9 12 - * Note: Currently, 70/140-mesh proppant sand material does not have an API/ISO specification. Table1.3: Oakdale API/ISO Test Results for the DDH-1-10 Composite Sample
1-7 JOHN T. BOYD COMPANY level (amsl) in elevation. Typical of other regional Wonewoc Formation “bluff” mines, there is little overburden, and following vegetation grubbing, 50 ft mining benches are drilled and blasted progressing from the highest elevations downward. Excavators load articulated trucks which haul the ROM material to a primary crusher located near the center of the property. 1.6.2 Processing The Oakdale processing plants consist of a series of two wash plants, three dry plants, and three rail loadouts centered around the centrally-located internal rail line on the property. The original processing plant layout (Wet 1, Dry 1, Loadout 1) was constructed in 2012 on the eastern side of the rail line, and an additional dry plant (Dry 2) was subsequently added to this area which was also fed by Wet 1. The most recent expansion in Q1 2018 included a new fully enclosed wet plant, dry plant, and rail loadout on the west side of the rail line (Wet 2, Dry 3, Loadout 3). This newer plant is where the majority of the mined sand is now processed and loaded. The east side plants are still utilized for incremental production as a “peaking” type facility when demand for product cannot be satisfied solely by the west side facility. The overall complex has an approximate annual finished product capacity of 5.5 million tons and is staffed by approximately 150 employees. This number can fluctuate based on product demand. The average process yield is reported to be 77.3%; as such, 5.1 million ROM tons are expected to produce approximately 4.0 million tons of finished frac sand product per year. The entire operation conforms to a 2-2 3-2 2-3 rotating shift schedule which uses four teams (crews) and two 12-hour shifts to provide 24/7 coverage. Personnel work an average 42 hours per week. The quarry pit generally operates 12-hours per day utilizing this rotation for the entire operation. 1.6.3 Infrastructure The Oakdale Mine transports finished frac sand products via either the on-site rail spur connecting with the Canadian Pacific (CP) rail line, or through a transloading facility located approximately three miles northeast of the mine in Byron, Wisconsin, that accesses the Union Pacific (UP) rail line. Three phase power and a natural gas pipeline is routed along County Road CA and into the plants from the southern end of the property. Wet plant process water is supplied
1-8 JOHN T. BOYD COMPANY primarily by surface water retention ponds, as wash process water is recycled after fines are removed via settling through a series of constructed ponds. A backup high-capacity water well has been drilled if additional water is needed. As the mine progresses, silt ponds are constructed in mined-out areas. Wastewater from offices and other buildings are collected via holding tanks and disposed of on a regular basis. Potable water is provided by a public water system. On-site facilities include a scale house, office, shop, and a quality laboratory located in the dry process plants. 1.7 Financial Analysis 1.7.1 Market Analysis The North American frac sand market has structurally shifted from long-haul NWS to lower-cost in-basin sands, driven primarily by logistics efficiency and cost optimization following the 2014–2016 oil price downturn. Today, in-basin sand dominates bulk volumes—particularly in the Permian Basin—while NWS retains a defensible niche in high-stress or performance-sensitive wells where superior conductivity and crush strength materially improve production outcomes. Smart Sand has demonstrated steady growth in sales volumes from 3.2 million tons in 2021 to 5.4 million tons in 2025, supported by a strong contract base (≈69% of volume) and concentration in key basins such as the Marcellus and Bakken (≈68% of shipments). However, average selling prices declined to $26.28/ton in 2025, reflecting broader market pricing pressures and competitive dynamics. Looking forward, demand for NWS is expected to remain stable but niche, supported by performance-critical applications, constrained supply, and steady premium pricing. While in-basin sands will continue to dominate overall volumes, NWS will remain strategically important for specialized completions. Long-term forecasts indicate stable pricing of approximately $23.08/ton and consistent production volumes, reinforcing the viability of continued frac sand operations at the Oakdale Mine. 1.7.2 Capital and Operating Costs The Oakdale Mine is a mature frac sand operation with well-established production, capital, and operating cost structures supported by historical performance and internal forecasts. Based on BOYD’s evaluation and experience with similar mining operations, the capital and operating cost estimates are considered reasonable and reliable, with an expected accuracy range of approximately ±20%.
1-9 JOHN T. BOYD COMPANY The operation is currently in steady-state production and does not require significant development or expansion capital to maintain planned output levels. Capital expenditures are primarily limited to sustaining capital required to maintain equipment, infrastructure, and operational efficiency. Historical capital spending was approximately $1.01 per ton sold in 2024 and $1.73 per ton sold in 2025, while projected sustaining capital expenditures are forecast at approximately $1.23 per ton sold in 2026, declining to approximately $1.01 per ton sold in 2030 and thereafter. These modest capital requirements reflect the mine’s mature infrastructure and lack of dependence on major future capital investment. Operating costs are stable and predictable, reflecting consistent mining, processing, logistics, and site-level administrative expenses. Historical cash production costs were approximately $13.10 per ton sold in 2025, and projected life-of-mine operating costs are expected to remain consistent at an average of approximately $12.98 per ton sold. These projections are based on expected labor, consumables, power, maintenance, and equipment costs, and exclude corporate overhead and royalties. Overall, the Oakdale Mine’s low sustaining capital requirements, stable operating cost structure, and mature operational profile support continued reliable production and long-term economic viability. 1.7.3 Economic Analysis BOYD’s economic analysis confirms the Oakdale Mine’s frac sand reserves are economically viable and capable of generating substantial long-term positive cash flow under reasonable operating and market assumptions. Using a discounted cash flow (DCF) model with a 12% after-tax discount rate, the project generates an after-tax net present value (NPV₁₂) of approximately $149 million and total after-tax life-of-mine cash flow of approximately $1.04 billion over a remaining reserve life of 59 years. Life-of-mine production is forecast at approximately 228.3 million tons of finished frac sand, generating total revenues of approximately $5.27 billion at an average mine-gate price of $23.08 per ton sold. Cash production costs average approximately $12.98 per ton sold, resulting in strong contribution margins and cumulative pre-tax cash flow exceeding $1.1 billion. Capital requirements are modest, totaling approximately $232 million over the life of the mine, reflecting the operation’s mature, steady-state status.
1-10 JOHN T. BOYD COMPANY Sensitivity analysis demonstrates that project economics are most influenced by frac sand pricing and operating costs, while capital cost variations have relatively limited impact. Even under adverse conditions, the project remains economically robust across a wide range of assumptions. Based on these results, BOYD concludes that the Oakdale Mine represents a financially viable and sustainable long-term frac sand operation with significant remaining economic value. 1.8 Regulation and Liabilities The Oakdale Mine’s operations are predominantly regulated by a Monroe County, Wisconsin non-metallic reclamation permit which contains detailed reclamation plans for the property. Mine operators must submit annual reports to Monroe County containing information on the reclamation status of their mines and pay annual fees based on the disturbed acres. They must also provide written certification that the reclamation plan is being followed. A significant portion of the mineable deposit underlies current wetlands areas that will need to be mitigated prior to mining; these areas are not in the current five-year mining plan. Air emissions are regulated by the Wisconsin Department of Natural Resources, Bureau of Air Management. Smart Sand monitors air emissions and has current permits. Based on our review of information provided by Smart Sand and available public information, it is BOYD’s opinion that the Oakdale Mine’s record of compliance with applicable mining, water quality, and environmental regulations is generally superior for that of the industry. BOYD is not aware of any regulatory violation or compliance issue which would materially impact the frac sand reserve estimate. 1.9 Conclusions It is BOYD’s overall conclusion that Smart Sand’s Oakdale Mine frac sand reserves, as reported herein: (1) were prepared in conformance with accepted industry standards and practices, and (2) are reasonably and appropriately supported by technical evaluations, which consider all relevant modifying factors. We do not believe there is other relevant data or information material to the Oakdale Mine that would render this TRS misleading. Our conclusions represent only informed professional judgment. The ability of Smart Sand, or any mine operator, to recover all of the reported frac sand reserves is dependent on numerous factors that are beyond the control of, and cannot be anticipated by, BOYD. These factors include mining and geologic conditions, the
1-11 JOHN T. BOYD COMPANY capabilities of management and employees, the securing of required approvals and permits in a timely manner, future sand prices, etc. Unforeseen changes in regulations could also impact performance. Opinions presented in this report apply to the site conditions and features as they existed at the time of BOYD’s investigations and those reasonably foreseeable. Q:\ENG_WP\3555.026 SS - Oakdale FY25\WP\Report\CH-1 - Executive Summary.docx
2-1 JOHN T. BOYD COMPANY 2.0 INTRODUCTION 2.1 Registrant Smart Sand is a fully integrated frac and industrial sand supply and services company focused on the mining, processing, and distribution of Northern White frac sand, an essential material in hydraulic fracturing for oil and gas that boosts hydrocarbon recovery. The company delivers end-to-end logistics solutions, transporting sand efficiently from the mine to the wellsite, with innovative storage and delivery systems such as SmartDepot™ silos and SmartPath® transloaders. In addition to serving the oil and gas sector, Smart Sand also provides sand products for industrial manufacturers and a variety of other industrial applications. Smart Sand, incorporated in Delaware in July 2011 and headquartered in Yardley, Pennsylvania, is a publicly traded company listed on NASDAQ under the ticker SND. Additional information regarding Smart Sand can be found on their website at www.smartsand.com. 2.2 Purpose and Terms of Reference Smart Sand retained BOYD to independently prepare and present estimates of frac sand resources and frac sand reserves for the Oakdale Mine in accordance with the disclosure requirements set forth in S-K 1300. As such, the purpose of this TRS is threefold: (1) to summarize technical and scientific information for the subject mining property, (2) to provide the conclusions of our review of the information for the property, and (3) to provide statements of frac sand resources and frac sand reserves for the Oakdale Mine. BOYD’s opinions and conclusions are based on our detailed review of the supporting geologic, technical, and economic information provided by Smart Sand, which was used in formulating the estimates of frac sand resources and frac sand reserves disclosed herein. We independently estimated the frac sand resources and frac sand reserves from first principles using exploration information provided by Smart Sand or by third-party experts engaged by Smart Sand. We employed standard engineering and geoscience methods, or a combination of methods, that we considered to be appropriate and necessary to establish the conclusions set forth herein. Our independent estimate of frac sand resources and frac sand reserves was then compared to Smart Sand’s internally prepared estimate of frac sand resources and frac sand reserves; the results of
2-2 JOHN T. BOYD COMPANY which were reasonably similar. Smart Sand included minor adjustments to the overall geologic model based on their operational knowledge of the Oakdale Property, and BOYD opines these modifications were reasonable and conservative in nature; as such, the Smart Sand volumetric estimate was therefore utilized as the basis to estimating frac sand resources and subsequent frac sand reserves. As in all aspects of mining property evaluation, there are uncertainties inherent in the interpretation of engineering and geoscientific data; therefore, our conclusions necessarily represent only informed professional judgment. The ability of Smart Sand, or any mine operator, to recover all the estimated frac sand reserves presented in this report is dependent on numerous factors that are beyond the control of, and cannot be anticipated by, BOYD. These factors include mining and geologic conditions, the capabilities of management and employees, the securing of required approvals and permits in a timely manner, future sand prices, etc. Unforeseen changes in regulations could also impact performance. Opinions presented in this report apply to the site conditions and features as they existed at the time of BOYD’s investigations and those reasonably foreseeable. This report is intended for use by Smart Sand, subject to the terms and conditions of its professional services agreement with BOYD. We also consent to Smart Sand filing this TRS with the SEC pursuant to S-K 1300. Except for the purposes legislated under U.S. securities law, any other uses of or reliance on this report by any third party is at that party’s sole risk. 2.3 Expert Qualifications BOYD is an independent consulting firm specializing in mining-related engineering and financial consulting services. Since 1943, BOYD has completed over 4,000 projects in the United States and more than 90 other countries. Our full-time staff comprises experts in: civil, environmental, geotechnical, and mining engineering; geology; mineral economics; and market analysis. Our extensive experience in frac sand resource and frac sand reserve estimation, and our knowledge of the subject properties, provides BOYD with an informed basis to opine on the frac sand resources and frac sand reserves available at the Oakdale Sand Mine. An overview of BOYD can be found on our website at www.jtboyd.com. The individuals primarily responsible for the preparation of this report and the estimates of frac sand reserves presented herein are by virtue of their education, experience, and professional association considered qualified persons (QPs) as defined in S-K 1300.
2-3 JOHN T. BOYD COMPANY Neither BOYD nor its staff employed in the preparation of this report have any beneficial interest in Smart Sand, and are not insiders, associates, or affiliates of Smart Sand. The results of our assignment were not dependent upon any prior agreements concerning the conclusions to be reached, nor were there any undisclosed understandings concerning any future business dealings between Smart Sand and BOYD. This report was prepared in return for fees based on agreed-upon commercial rates, and the payment for our services was not contingent upon our opinions regarding the project or approval of our work by Smart Sand and its representatives. 2.4 Principal Sources of Information The information, estimates, opinions, and conclusions presented herein are informed by: (1) data, reports, and other information provided by Smart Sand, (2) discussions with Smart Sand personnel, (3) records on file with regulatory agencies, (4) data, reports, and other information from public sources, and (5) nonconfidential information in BOYD’s possession. The following information was provided by Smart Sand: • Exploration records (e.g., drill hole location maps, drilling logs, and lab testing summaries) • Mapping data, including: - Property control boundaries - Infrastructure locations - Easement and right-of-way boundaries - Topographic site surveys - Recent mining extents • Overview of processing operations and detailed flow diagrams • Preliminary business plans • Historical information, including: - Production reports and reconciliation statements - Financial statements - Product sales and pricing - Mine plans - Site plans - Operational data • Files related to mining and operating permits
2-4 JOHN T. BOYD COMPANY Work files prepared for, and information contained in, the following BOYD reports were utilized to prepare the estimates of frac sand resources and frac sand reserves disclosed herein: John T. Boyd Company. Technical Report Summary: Frac Sand Resources and Reserves, Oakdale Mine, Monroe County, Wisconsin, Report No. 3555.021 (January 2022). John T. Boyd Company. Technical Report Summary: Frac Sand Resources and Reserves, Oakdale Mine, Monroe County, Wisconsin, Report No. 3555.021A (February 2024). Any other information from sources external to BOYD and/or Smart Sand is referenced accordingly. The data and work papers used in the preparation of this report are on file in our offices. 2.4.1 Personal Inspections The most recent personal inspections of the Oakdale operation were made by two of BOYD’s senior geology and mining staff—both qualified persons—on October 26, 2021. The site visit included: (1) observation of the active mining operations, (2) a tour of the mine site’s surface infrastructure, and (3) a detailed discussion of Smart Sand’s geologic model and mine plan. BOYD’s representatives were accompanied by Smart Sand management who openly and cooperatively answered questions regarding, but not limited to: site geology, mining conditions and operations, equipment usage, labor relations, operating and capital costs, current and proposed processing operations, and frac sand marketing. 2.4.2 Reliance on Information Provided by the Registrant In the preparation of this report, BOYD has relied, exclusively and without independent verification, upon information furnished by Smart Sand with respect to: • Property title and status • Encumbrances, easements, and rights-of-way • Permits, bonds, and reclamation liability • Sustainability initiatives • Surface tailings management • Mine closure requirements and plans • Monitoring/compliance requirements for protected areas/species • Community relations • Market overview and strategy
2-5 JOHN T. BOYD COMPANY • Product specifications • Marketing and sales contracts • Income tax rates • Inflation and discount rates Our opinions and conclusions regarding this information are provided in the relevant sections of this report. 2.4.3 Verification of Information BOYD exercised due care in reviewing the information provided by Smart Sand within the scope of our expertise and experience (which is in technical and financial mining issues) and concluded the data are reasonable and reliable considering the status of the subject properties and the purpose for which this report was prepared. We have no reason to believe that any material facts have been withheld or misstated, or that further analysis may reveal additional material information. However, the accuracy of the results and conclusions of this report are reliant on the accuracy of the information provided by Smart Sand. While we are not responsible for any material omissions in the information provided for use in this report, we accept responsibility for the disclosure of information contained herein which is within the scope of our expertise. 2.4.4 Other Relevant Data and Information BOYD is not aware of any additional information that would materially affect the frac sand resource and frac sand reserve estimates reported herein. 2.5 Report Version The effective (i.e., “as of”) date of this TRS is December 31, 2025. The estimates of frac sand resources and frac sand reserves and supporting information presented in this report are effective as of December 31, 2025. This is the third TRS for the Oakdale Mine filed by Smart Sand. This report supersedes the previously filed TRSs and any predated estimates of frac sand resources or frac reserves for the Oakdale Mine. Users of this document should ensure that this is the most recent disclosure of frac sand resources and frac sand reserves for the Oakdale Mine as it is no longer valid if more recent estimates are available.
2-6 JOHN T. BOYD COMPANY 2.6 Units of Measure The U.S. customary measurement system has been used throughout this report. Tons are short tons of 2,000 pounds-mass. Volumes and tonnages have been rounded to reflect estimate precision; minor differences generated by rounding are not considered material to the disclosed estimates. Unless otherwise stated, currency is expressed in U.S. Dollars ($). Historic prices and costs are presented in nominal (i.e., unadjusted) dollars. Future dollar values are expressed on a constant (i.e., unescalated) basis as of the effective date of this report. q:\eng_wp\3555.026 ss - oakdale fy25\wp\report\ch-2 - introduction.docx
3-1 JOHN T. BOYD COMPANY 3.0 PROPERTY OVERVIEW 3.1 Description and Location Smart Sand’s Oakdale Mine is an active surface frac sand mining and processing operation that produces premium branded NWS products for use in the hydraulic fracturing process (known as “fracking”) to produce petroleum fluids, such as oil, natural gas, and natural gas liquids. Figure 6.2 (page 6-8) shows the general layout of the Oakdale property, including locations of mine offices and ancillary facilities, processing plants, loadout facilities, and current and former mining pits. The Oakdale Mine is located in Monroe County, Wisconsin, consisting of a contiguous block of property totaling approximately 1,256 acres with surface and mineral rights owned in fee by Smart Sand. The subject property is situated less than two miles southwest of the town of Oakdale, and approximately 150 miles southeast of the Minneapolis-St. Paul metro area. Geographically, the Oakdale frac sand processing plant is located at approximately 43°57'5.46” N latitude and 90°24'14.22” W longitude. 3.2 History Smart Sand’s Oakdale Mine has operated since 2012, mining and producing premium NWS frac sand products for use in the oil/gas industry. NWS has historically been extensively mined, via surface mining operations, in the north central portion of the United States (Minnesota, Wisconsin, and Illinois, and to lesser extents in Arkansas and Iowa). The primary sources of NWS are from the Ordovician Age Saint Peter, and the Cambrian Age Jordan, Wonewoc, and Mount Simon Formations, which are mineable at the surface throughout an area spanning from south central Minnesota into Wisconsin and portions of Northern Illinois. Smart Sand purchased the Oakdale property as a greenfield site in 2010, and immediately began developing the property, commencing operations in 2012. Oakdale’s Mine Safety and Health Administration (MSHA) identification number (4703625) was assigned in 2012, with mining operations commencing in the third quarter 2012.
3-2 JOHN T. BOYD COMPANY 3.3 Property Control The Oakdale property comprises approximately 1,256 contiguous acres of surface and subsurface mineral rights reportedly owned in fee by Smart Sand. As part of the purchase agreement, Smart Sand pays a royalty of $0.50 per ton of finished frac sand sold to the former landowner. It is BOYD’s understanding that there are no additional royalties, overriding or limited royalties, working interests, production payments, net profit interests, or other mineral interests in the Oakdale property. 3.4 Adjacent Properties Extensive frac sand mining and processing activity occurs throughout three general mining districts (regions) of Wisconsin: the Barron (northwestern Wisconsin), Blair (west- central Wisconsin), and Oakdale (south-central Wisconsin) districts. Smart Sand’s Oakdale Mine is located at the southeastern extent of the Oakdale mining district. Nearby frac sand mines include Iron Oak Energy’s Tunnel City and Wyeville operations, both situated in the Oakdale mining district. A concentration of at least a half-dozen additional frac sand mines are located between 40 – 50 miles northwest in the Blair District, including Smart Sand’s own Blair Mine. There is no information included in the preparation of this report that has been sourced from adjacent operations. 3.5 Regulation and Liabilities The Oakdale Mine operates under several permits and must comply with various other federal, state, and municipal regulations that do not require a specific permit. Smart Sand reports that necessary permits are in place or applied for to support immediate operations. New permits or permit revisions may be necessary from time to time to facilitate future operations. Given sufficient time and planning, Smart Sand should be able to secure new permits, as required, to maintain its planned operations within the context of the current regulations. Smart Sand pays property taxes to the local government in Monroe County in order to maintain ownership of the Oakdale property.
3-3 JOHN T. BOYD COMPANY To the extent known to BOYD, there are no current violations, fines, liens, or other significant factors or risks that may affect access, title, or the right or ability to perform work on the Oakdale property. 3.6 Accessibility, Local Resources, and Infrastructure Smart Sand’s Oakdale Mine is located near a number of small towns in Monroe County, Wisconsin. Monroe County, and the four surrounding counties, have a combined population of over 240,000 people, according to 2020 population estimates for the State of Wisconsin. General access to the Oakdale Mine is via a well-developed network of primary and secondary roads serviced by state and local governments. These roads offer direct access to the mine and processing facilities and are open year-round. Primary vehicular access to the property is via State Route 12, with nearby access to Interstate 90/94. Finished frac sand products from the Oakdale Mine are transported via rail, as the subject property has on-site rail access to the CP rail network. Alternatively, Smart Sands owns an off-site transload facility near the town of Byron, approximately three miles north of the mine property, providing access to the UP rail network. Several regional airports are within an hour’s drive from the mine, and the nearest major international airport, the Minneapolis-St. Paul International Airport, is less than three hours away by road. Reliable sources of three phase electrical power, natural gas, water, and other miscellaneous materials are readily available. Electrical power is provided by regional utility companies. Water is supplied via various sources such as recycled process water ponds, an on-site high-capacity water well, and the public water system. The operation was issued a public water system permit in 2015. 3.7 Physiography The Oakdale property is located in the Western Upland physiographic region of Wisconsin, a geographical region that comprises much of the western half of the state. The Western Upland region is characterized by steep hills, wooded ridges, and rocky outcrops dissected by streams and rivers. The region comprises a portion of the greater driftless area, which marks the termination of advancing glaciers during the last glacial periods of the ice age (Wisconsin Period), which lasted until approximately 11,000 years ago.
3-4 JOHN T. BOYD COMPANY The surface of the Oakdale property is overlain by a veneer of poorly sorted glacial till ranging from a few feet to over 30 ft in depth. Beneath the glacial till is the Mount Simon Formation Sandstone, the primary formation of economic interest at the Oakdale operation. In the higher elevations found on the western portion of the property, Smart Sand mines Wonewoc Formation deposits from “bluffs” that overly the Mount Simon Formation. Both formations are primary sources of sand that is mined and processed into frac sand (NWS) from the region. Surface topography within the property is predominately flat lying, except for the western-most portions of the property where the surface elevation increases, and a series of hills or bluffs are present (vertical relief of 125 ft to 150 ft). Land cover in the immediate area consists primarily of a mixture of hardwood and conifer forests in higher elevations, and intermittent grasslands and wetlands in lower elevations with agricultural land in between. 3.8 Climate Near the Oakdale operation, summers are relatively mild; winters are cold, dry, and enduring; skies are generally partly cloudy to clear. Average high temperatures may range from 9ºF to 83ºF, with the months of November-March exhibiting average lows at or below freezing (32ºF). Average annual rainfall is approximately 3 in., with approximately 75 days of rain annually. Average annual snowfall is approximately 38 in., with an average 23 days per year of notable snowfall. In general, the operating season for the Oakdale Mine is year-round, as Smart Sand has an enclosed wet processing plant that is able to run throughout the winter season. Adverse weather conditions seldom restrict or interfere with the mining, processing, and loading operations; however, extreme weather conditions may temporarily impact operations. Although rare, periodic flooding may be possible during extreme rainfall events. Q:\ENG_WP\3555.026 SS - Oakdale FY25\WP\Report\CH-3 - Property Description.docx
4-1 JOHN T. BOYD COMPANY 4.0 GEOLOGY 4.1 Regional Geology NWS are generally located in the north-central portion of the United States (Minnesota, Wisconsin, and Illinois, and to lesser extents in Arkansas and Iowa). NWS is found in poorly cemented Cambrian and Ordovician sandstones and in unconsolidated alluvial deposits locally derived from these sandstones. The Saint Peter, Jordan, Wonewoc, and Mount Simon formations are the primary sources of NWS. Smart Sand’s Oakdale Mine is located in an area of western Wisconsin near where the Central Sand Plains and Western Coulees and Ridges ecoregions converge. The Central Sand Plains ecoregion is characterized by widespread and relatively flat-lying sand deposits originating from lacustrine and glacial lake outwashes as glaciers began to recede from the region. Glacial melt waters, towards the end of the Wisconsin glacial period (c.19,000 years ago), carried sediment into an ancient lake, Glacial Lake Wisconsin, where they accumulated for approximately 5,000 years. This ancient lake covered much of the nearby region, spanning 70 miles in length, with depths reaching over 150 ft. Approximately 14,000 years ago, Glacial Lake Wisconsin was abruptly drained as ice dams began to melt, flooding the lowlands it typically drained to within a matter of days. Deposition of lakebed sediments were sorted to varying degrees, and the nearby sands that were deposited eventually dried out and were further transported by intense winds throughout the region. The Western Coulees and Ridges ecoregion is characterized by heavily eroded, yet unglaciated, early Paleozoic (Cambrian and Ordovician) Age bedrock. Extensive river channels with networks of floodplains, deltas, and terraces eroded much of the poorly cemented sandstone bedrock formations from the region, leaving scoured valley areas that were gradually infilled by further erosional processes from the surrounding ridges. 4.2 Property Geology 4.2.1 General Stratigraphy The Cambrian Age Mount Simon Formation sandstone is the primary lithologic unit of economic interest on the Oakdale property, and on a regional basis, ranges in thickness from approximately 300 ft to over 2,000 ft (in Indiana). The Mount Simon Formation unconformably overlies Pre-Cambrian Age granite bedrock that exhibits a heavily
4-2 JOHN T. BOYD COMPANY weathered upper interval, or rind, of saprolite—a chemically weathered, decomposed granite--that still exhibits original structural features of the granite bedrock. In localized, higher elevation areas of the Oakdale property, deposits of Cambrian Age Wonewoc sands are also found. The Wonewoc is only found in these western bluffs and is also mined and processed into frac sand products at the Oakdale Mine. The surface of the Oakdale property is overlain by a veneer of poorly sorted glacial till ranging from a few feet to over 30 ft in depth. Surface topography is predominately flat lying except in the western-most extents of the property, where the surface elevation increases as a series of hills or bluffs (vertical relief of 125 ft to 150 ft). The size consist of the sand found in the above drainage bluff areas is a coarser mix, typical of the Wonewoc Formation, in comparison to the sands found in the alluvial material and in the in-place below drainage sand formations (Mount Simon Formation). A generalized stratigraphic chart of the surficial geologic units in Monroe County, Wisconsin is presented in Figure 4.1. Figure 4.1: Generalized Stratigraphic Chart, Monroe County, Wisconsin The following text discusses the strata encountered on and around the Oakdale property, in depositional order: Pre-Cambrian Granite Pre-Cambrian granites present in the region tend to exhibit an upper, heavily weathered saprolite interval comprising the upper-most portion of the granitic bedrock. The chemically altered saprolite rind indicates intense weathering has occurred over extended timeframes (millions of years) to varying depths within the granite bedrock. System Group Geologic Unit Glacial Till Wonewoc Formation Eau Claire Formation Mount Simon Formation Saprolite / Granite Neogene Cambrain Elk Mound Pre-Cambrian
4-3 JOHN T. BOYD COMPANY Cambrian Mount Simon Formation The Mount Simon Formation unconformably overlies Pre-Cambrian granite bedrock, and can be described locally as a poorly consolidated, poorly sorted, fine-grained, quartz sandstone deposited in shallow marine environments as Cambrian seas formed in the region. Sands derived from the Mount Simon Formation are typically white in color, but may occur as yellowish-gray or grayish-red sands as well. Cambrian Eau Claire Formation The Eau Claire Formation typically overlies the Mount Simon, and is locally a finer-grained, moderately- to well-sorted, sandstone which may be glauconitic and dolomitic, containing varying degrees of laminated shales. The Eau Claire Formation, however, seems to be absent from the Oakdale Property based on drilling records. Cambrian Wonewoc Formation The Wonewoc typically overlies the Eau Claire Formation; however, on the Oakdale Property, Wonewoc sands are deposited in the higher elevation bluff areas, unconformably overlying the Mount Simon Formation, presumably as a result of glacial outwash deposition. The Wonewoc is coarser-grained when compared to the Mount Simon, and is typically white in color, but may also appear as a pale yellow. 4.2.2 Structural Geology Structure of the mineable deposits located on the Oakdale property appear to be flat lying with no evidence of faulting or other distinguishing geologic features. Total thickness of the Mount Simon Formation contained on the property was not determined as the deepest drill hole (240 ft in length) was stopped while still in the sandstone formation. The Wonewoc deposits within the property boundaries reach approximately 90 ft in thickness when present in the western bluff areas. A cross-section through the deposit is provided in Figure 4.2, on the following page.
4-5 JOHN T. BOYD COMPANY 4.3 Frac Sand Geology Frac sand is a naturally occurring, high silica content quartz sand, with grains that are generally well-rounded. The main difference between frac sand and other sands is that frac sand grains are relatively pure in composition, consisting almost entirely of quartz; other sands have numerous impurities that may be cemented to the quartz grains. The pure quartz composition of frac sand grains, along with being well-rounded and spherical in shape, gives these sands the characteristics (crush strength, high acid solubility, low turbidity) that are sought after by oil and gas producers for use in developing wells. The sands mined at Oakdale are NWS that are processed into various high quality frac sand products. Frac sands generally exhibit the following characteristics required by oil and gas producers for use in developing wells: • High-purity – frac sand grains are relatively pure (typically, >95% silicon dioxide) in composition and almost entirely free from contaminants. Typical sand deposits have numerous impurities fused to the silica grains, such as iron, carbonate, potassium, and other trace elements/minerals, which can make them more susceptible to mechanical and chemical alteration. Mineralogical purity of silica content is a characteristic of mature sand, which has been highly reworked and well sorted, so that the mechanically and chemically less-resistant minerals and fine particles have been dissolved or winnowed away. • Homogeneous grain size – hydraulic fracturing procedures require sand in a relatively narrow range of grain sizes which are dependent on the specific geological conditions of the well and the fracking procedures used. Larger sand grains generally provide better permeability, but smaller sand grains are typically stronger. When describing frac sand, the product is frequently referred to as simply the sieve cut, e.g., 20/40 mesh sand—meaning that 90 percent of the sand is fine enough to pass through a 20-mesh sieve and is coarse enough to be retained on a 40-mesh sieve. Common frac sand sizes include 20/40 mesh, 30/50 mesh, 40/70 mesh, “100 mesh”, “200 mesh”, and finer. The size ranges for “100 mesh” and “200 mesh” vary significantly between manufacturers. As of the date of this report, finer sands such as 40/70 mesh and “100 mesh” have become more widely utilized in shale gas well fracturing. • High sphericity and roundness – Sphericity and roundness describe the overall shape of the sand grains. Sphericity measures how close the grains approach the shape of a sphere while roundness measures the relative sharpness of corners and curvatures of the grains. Greater sphericity and roundness provide better grain strength and porosity/permeability between grains, allowing better flow of oil and gas from the fractures to the wellhead. A more spherical shape also enables the grains to be carried in the fracking fluid with minimal turbulence. • High crush resistance – Crush resistance of frac sand is dependent upon the hardness and shape of the sand grain. Generally, a high percentage of silica in the
4-6 JOHN T. BOYD COMPANY sand increases its crush resistance. Additionally, monocrystalline grains are stronger than composite grains. Crush resistance is expressed as a K-value that indicates the highest pressure (rounded to the nearest 1,000 psi) that generates less than 10 weight percent fines (i.e., crushed sand grains). For example, a K-value of 7 means that, at 7,000 psi pressure, no more than 10 weight percent fines were generated, but more than 10 weight percent fines were generated at the next highest pressure. The higher the K-value, the more crush-resistant the sand is. • Low acid solubility – Acid solubility is an indication of the amount of soluble cement or soluble mineral grains (i.e., non-silica contaminants) in the frac sand; low solubility requires a high silica content, as pure quartz tends to be insoluble under normal conditions. • Low turbidity – Turbidity is a measure of the clay, silt, or other fine grains and impurities in the sand. Low turbidity is a result of mineralogical maturity and grain-size sorting in the natural depositional environment. Generally, fine suspended matter in the mined sand is washed out during processing, so this property can be somewhat controlled for the final product. Frac sands are generally characterized by a high silica content, high roundness and sphericity, white color, and lack of deleterious material. Because of their monocrystalline structure, these sands have superior grain strength when compared to other silica sands. q:\eng_wp\3555.026 ss - oakdale fy25\wp\report\ch-4 - geology.docx
5-1 JOHN T. BOYD COMPANY 5.0 EXPLORATION DATA 5.1 Background BOYD has been involved with Smart Sand’s Oakdale property since mid-2011. At that time, under BOYD’s supervision, three drill holes were completed with the intent to confirm results from earlier drilling; the confirmatory drill holes had composite frac sand core samples submitted to Stim-Lab for API testing. BOYD used the results of this program to confirm prior drilling and testing data obtained on the property. Upon completion of confirmatory drilling, BOYD was able to map the Oakdale deposit and calculate an initial resource estimate. Since this initial involvement, BOYD has completed numerous updated resource and reserve studies on the Oakdale property, utilizing data from additional exploration programs, as well as completing annual reserve depletion updates for Smart Sand over their typical course of operations. 5.2 Exploration Procedures 5.2.1 Drilling and Sampling Based on information provided to BOYD by Smart Sand, there have been six different drilling campaigns completed on the Oakdale property. The first drilling campaign commenced in December 2010, and the most recent drilling campaign was completed in 2018. From 2010 to 2018, a total of 37 drill holes have been completed throughout the Oakdale property, with 30 of these drill holes providing sufficient data able to be utilized by Smart Sand in their geologic model, and subsequently by BOYD to verify the Smart Sand model. Seven drill holes were not utilized for various reasons, such as insufficient core recovery, hole abandonment, duplicate confirmatory drilling, or drill holes that had no/insufficient data provided. More specifically, drill holes completed in the first campaign were later twinned for verification in the 2014 and 2016 campaigns; accurate collar locations for the initial drill holes were unable to be verified. Table 5.1, on the following page, presents summary information on the various Oakdale property drilling campaigns completed to date.
5-2 JOHN T. BOYD COMPANY Number of Sand Cores Drill Holes Year Holes Drilled Data Used Thickness (ft) Not Used Reason Not Used 2010 2 - NA 2 Insufficient Core Recovery 2011 13 12 1,581 1 Hole Abandoned 2011-BOYD 3 - NA 3 Duplicated Results 2012 3 2 330 1 No data provided 2016 12 12 1,765 - 2018 4 4 965 - Total 37 30 4,641 7 Table 5.1: Oakdale Mine Exploration Drilling Campaign Summary BOYD reviewed the drilling and sampling methodologies utilized in the various exploration campaigns completed on the Oakdale property, as well as the equipment used (ranging from wireline coring to air rotary to rotosonic coring methods), sampling and logging procedures, and the overall field work performed. We note that methodologies and procedures utilized indicate the data obtained were carefully and professionally collected, prepared, and documented in conformance with generally accepted industry standards. BOYD opines that the exploration drilling and sampling completed is thorough and comprehensive for purposes of evaluating and estimating frac sand resources and reserves on the Oakdale property. 5.2.2 Frac Sand Testing Numerous samples obtained on the Oakdale property from each of the various drilling campaigns were taken to Stim-Lab, where they were first prepared and analyzed for particle size distribution. The general procedure for particle size distribution analysis was as follows: 1. The sample was dried to remove moisture. 2. A 600- to 1,200-gram subsample was collected and weighed. 3. The subsample was placed in a blender for three minutes to break up the material as much as possible. 4. The blended subsample was then placed on a 200-mesh wash screen, and thoroughly washed to remove any fine materials (e.g., clays and silts). 5. The remaining larger than 200 mesh (+200 mesh) material is then dried and weighed to determine the mass of fines that were washed out (i.e., wash loss). 6. The cleaned subsample was then either placed into a sieve stack of different mesh sizes and agitated for a period of 20 minutes, or run through a high-speed photographic particle size analyzer (i.e., CAMSIZER) to determine the particle size distribution of the subsample.
5-3 JOHN T. BOYD COMPANY Stim-Lab then prepared composite samples for various product sizes, as directed by Smart Sand. The composite samples were then analyzed for API RP 19C/ISO 13503-2 (API/ISO) frac sand characteristics. Grain size distribution analyses and API/ISO testing results are summarized in Section 5.3. 5.2.3 Other Exploration Methods No other methods of exploration (such as airborne or ground geophysical surveys) were completed on the Oakdale property. 5.3 Laboratory Testing Results The relatively uniform nature of the sandstone deposit underlying the Oakdale property, combined with the results of independent laboratory testing, indicates the subject property is capable of producing various frac sand products—typically in the 30/140- mesh size fraction—that meet various customer specifications. 5.3.1 Grain Size Distribution Grain size distribution was analyzed according to API/ISO, Section 6. A table of the weighted average grain size distributions of the in-situ sand deposit, and corresponding product size distributions, were derived from laboratory testing results. Results of these analyses are presented in Table 5.2, below. The preceding table highlights the relative size consist of the sands found within the Oakdale Property deposit, indicating approximately 86% of the sand particles are concentrated between the “passing 30-mesh” and “retained 140-mesh” size fraction. Moreover, of the 30/140-mesh product size sand fraction, approximately 68% of the marketable product consists of finer 50/140-mesh sands. 5.3.2 Grain Shape (Sphericity and Roundness) Grain shape was analyzed according to API/ISO, Section 7. Under this standard, recommended sphericity and roundness values for proppants are 0.6 or greater. As part of the grain shape analysis, the presence of grain clusters (weakly cemented grain aggregates) and their approximate proportion in the sample were reported.
5-4 JOHN T. BOYD COMPANY 5.3.3 Acid Solubility Acid solubility was analyzed according to API/ISO, Section 8. Under this standard, five grams of sand is treated with 100 milliliters of 12:3 hydrochloric acid to hydrofluoric acid at 150oF for 30 minutes. The recommended maximum acid solubility for proppants in the 30/50-mesh size and coarser size range is 2.0%, and for proppants in the 40/70-mesh size and finer size range is 3.0%. 5.3.4 Turbidity Turbidity was analyzed according to API/ISO, Section 9. Under this standard, the suggested maximum frac sand turbidity should be equal to or less than 250 nephelometric turbidity units (NTU). 5.3.5 Crush Resistance Crush resistance is a key test that determines the amount of pressure a sand grain can withstand under laboratory conditions for a two-minute duration. The sample was analyzed according to API/ISO, Section 11. Under this standard, the highest stress level (psi) in which the proppant produces no more than 10% crushed fine material is rounded down to the nearest 1,000 psi and reported as the “K-value” of the material. 5.3.6 Quality Summary Stim-Lab performed API/ISO analyses on composite samples created in the 20/40, 40/70, and 70/140-mesh product sizes. The test results are presented in Table 5.3, below. DDH-1-10 Average API/ISO Test Results By Product Size API RP19C API RP19C Result Recommended Result Result Recommended Test 20/40-mesh Specification 40/70-mesh 70/140-mesh* Specification Sphericity 0.8 ≥ 0.6 0.7 0.7 ≥ 0.6 Roundness 0.7 ≥ 0.6 0.7 0.6 ≥ 0.6 Acid Solubility (%) 0.7 ≤ 2.0 0.9 1.3 ≤ 3.0 Turbidity (NTU) 30 ≤ 250 16 16 ≤ 250 K-Value (000 psi) 7 - 9 12 - * Currently, 70/140-mesh proppant sand material does not have an API/ISO specification. Table 5.3: Oakdale API/ISO Test Results for the DDH-1-10 Composite Sample The composited sample testing suggests that the Oakdale Mine can produce frac sands which meet minimum API/ISO recommended testing characteristics. BOYD notes that the Oakdale Mine has been selling various frac sand products to their E&P and drilling services customers since 2012.
5-5 JOHN T. BOYD COMPANY 5.4 Data Verification For purposes of this report, BOYD notes that we prepared an initial resource/reserve report for the Oakdale property in 2012 and have since prepared updates to the estimated frac sand resources and frac sand reserves as material changes have occurred in the development of the operation. Material changes may include but are not limited to: new exploration drilling and testing data; the purchase or sale of property; changes in demand for product sizes; operational changes or updates. The December 31, 2025 reserve estimate for the Oakdale Mine is based on historic drill hole data previously used by BOYD in the preparation of our prior reserve estimates. It is customary in preparing frac sand resource and frac sand reserve estimates to accept basic drilling and quality testing data as provided by the client, subject to the reported results being judged representative and reasonable. As we have judged the drilling and quality data representative and reasonable, we opine that they are still representative and reasonable for use in the December 31, 2025 resource and reserve estimate. q:\eng_wp\3555.026 ss - oakdale fy25\wp\report\ch-5 - exploration.docx
6-1 JOHN T. BOYD COMPANY 6.0 FRAC SAND RESOURCES AND RESERVES 6.1 Applicable Standards and Definitions Unless otherwise stated, frac sand resource and frac sand reserve estimates disclosed herein are completed in accordance with the standards and definitions provided by S-K 1300. It should be noted that BOYD considers the terms “mineral” and “frac sand” to be generally interchangeable within the relevant sections of S-K 1300. Estimates of any mineral resources and reserves are always subject to a degree of uncertainty. The level of confidence that can be applied to a particular estimate is a function of, among other things: the amount, quality, and completeness of exploration data; the geological complexity of the deposit; and economic, legal, social, and environmental factors associated with mining the resource/reserve. By assignment, BOYD used the definitions provided in S-K 1300 to describe the degree of uncertainty associated with the estimates reported herein. The definition of mineral (frac sand) resource provided by S-K 1300 is: Mineral resource is a concentration or occurrence of material of economic interest in or on the Earth's crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A mineral resource is a reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining dimensions, location or continuity, that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled. Estimates of frac sand resources are subdivided to reflect different levels of geological confidence into measured (highest geologic assurance), indicated, and inferred (lowest geologic assurance). Please refer to the Glossary of Abbreviations and Definitions for the meanings ascribed to these terms. The definition of mineral (frac sand) reserve provided by S-K 1300 is: Mineral reserve is an estimate of tonnage and grade or quality of indicated and measured mineral resources that, in the opinion of the qualified person, can be the basis of an economically viable project. More specifically, it is the economically mineable part of a measured or indicated mineral resource, which includes diluting materials and allowances for losses that may occur when the material is mined or extracted.
6-2 JOHN T. BOYD COMPANY Estimates of frac sand reserves are subdivided to reflect geologic confidence, and potential uncertainties in the modifying factors, into proven (highest assurance) and probable. Please refer to the Glossary of Abbreviations and Definitions for the meanings ascribed to these terms. Figure 6.1 shows the relationship between frac sand resources and frac sand reserves. Figure 6.1: Relationship Between Frac Sand Resources and Frac Sand Reserves In this report, the term “frac sand reserves” represent the tonnage of frac sand products that meets customer specifications and will be available for sale after processing of the ROM sand. 6.2 Frac Sand Resources 6.2.1 Methodology BOYD independently prepared estimates of in-place frac sand resources for the Oakdale Mine, as of December 31, 2025, by performing the following tasks: 1. Available drilling logs and laboratory testing results were reviewed to check for accuracy and to support development of the geologic model. The geologic database utilized for modeling and estimation consists of results of 30 drillholes, as discussed in Chapter 5. The subsequent geologic data were imported into Carlson Software, a geologic modeling and mine planning software suite that is widely used and accepted by the mining industry.
6-3 JOHN T. BOYD COMPANY 2. A geologic model of the deposit was created in Carlson Software using industry-standard grid modeling methods well-suited for simple stratigraphic deposits. The geologic model delineates the top and bottom of the overburden material, the mineable sand horizon, and the distribution of the product size fractions throughout the deposit. The top and bottom of the mineable frac sand interval was established thusly: a. There is minimal overburden material across the property. The top of the mineable sand interval was defined by Smart Sand, after reviewing drill hole records to define depths at which the sand interval began, as well as considering that the upper few feet of the sand interval tended to exhibit lower yields, and were considered as waste (overburden) as opposed to material that would be fed into the wet processing plant. BOYD opines this approach results in a reasonable, and slightly more conservative basis, to define the upper extent of the mineable sand interval. b. The current ground surface was provided by compiling several aerial topographic surveys that have been conducted from the beginning of the project through August 31, 2025. The flyovers recorded advancement of active and previously mined pits, and the original LIDAR data were used to define the remaining undisturbed ground surface to estimate currently available sand resource volumes. c. The bottom of the mineable sand interval was established at an elevation of 800 ft amsl. Although drilling records show the sand interval extending below an elevation of 800 ft amsl, due to waste material stockpile space constraints, it is unlikely that mining material below this elevation would be operationally feasible. 3. After reviewing the continuity and variability of the deposit, suitable resource classification criteria were developed and applied, which are discussed further in Section 6.2.2. 4. BOYD then reviewed the proposed mining regions identified by Smart Sand. Estimation of the in-place frac sand resources for the Oakdale Property assumes mining operations using standard surface excavation equipment, which is widely utilized for mining similar deposit types. Estimates were subject to the following setbacks and slope requirements: a. 100 ft setback inside of property lines. b. Site infrastructure, including rail lines, plants and processing areas, and site access were eliminated from the resource areas. 5. A 75-degree pit highwall, with a 30 ft catch bench for every 100 ft drop was observed, and a final mining pit floor elevation of 800 ft amsl was used to define the mineable pits within the Oakdale Property. In-place volumes for the proposed pits were calculated from the geologic model. A dry, in-place, bulk density of 125 pounds per cubic foot (based on a density study completed by Smart Sand in 2019) was used to convert the in-place frac sand resource volumes into tonnages.
6-4 JOHN T. BOYD COMPANY 6. For the inaugural Oakdale TRS (BOYD Report 3555.021A) BOYD compared the volumetric estimate derived from our independent geologic modeling to that of the model provided by Smart Sand. The volumetric estimates from the two models were reasonably similar; as such, the Smart Sand volumetric estimate was utilized as the basis for the resource estimate. 7. To estimate remaining frac sand resources as of December 31, 2025, BOYD again utilized Smart Sand’s geologic model as a basis to create an updated volumetric estimate. Recent topographic survey data was utilized to estimate remaining resources available on the Oakdale Property as of the date of the flyover (August 31, 2025). 8. BOYD then utilized provided production data to reconcile the estimate of remaining frac sand resources from the date of volumetric estimate to December 31, 2025. 6.2.2 Classification Geologic assuredness is established by the availability of both structural (thickness and elevation) and quality (size fraction) information for the deposit. Resource classification is generally based on the concentration or spacing of exploration data which can be used to demonstrate the geologic continuity of the deposit. When material variations in thickness, depth, and/or sand quality occur between drill holes, the allowable spacing distance between drill holes is reduced. The following drill hole spacing criteria were established by BOYD after reviewing the available exploration data and geologic model, and were used to classify the frac sand resources of the Oakdale Property as shown in Table 6.1, below: Table 6.1: Oakdale Property Drill Hole Spacing Parameters Resource Classification Spacing Requirement (ft) (Nominal Maximum) Measured 1,750 Indicated 3,500 Inferred 7,000 BOYD has classified all of the estimated frac sand resources within the defined mineable areas of the Oakdale Property as either Measured or Indicated based on drilling density and the low geologic complexity of the deposit. In determining the resource classifications, these factors suggest that a majority of the Oakdale Property may be considered as a Measured Resource; however, areas with significant wetlands were classified as Indicated Resources, as additional environmental studies may be required prior to mining. BOYD is of the opinion that there is a low degree of uncertainty associated with each of the resource classifications.
6-5 JOHN T. BOYD COMPANY 6.2.3 Estimation Criteria Development of the frac sand resource estimates for the Oakdale Mine assumes mining and processing methods and equipment that have been utilized successfully at the operation for several years. The target mining horizon manifests as a continuous sand unit exhibiting relatively consistent depth, thickness, and quality. There is relatively little overburden, and the high-quality sand is easily distinguished from the overlying waste interval; as such, interpretation of the mineable horizon is relatively easy to distinguish. Mined sand is processed to remove out-size materials (i.e., sand which is either too coarse or silts/fines which cannot be sold) and produce saleable finish frac sand products. The amount of finished sand produced as a percentage of the raw sand mined is referred to as the processing yield (or plant yield), which is analogous to the “cut-off grade” of other mining operations. If the expected processing yield of the sand is too low, the cost of production will outweigh sales revenues, and the deposit cannot be economically mined. The minimum processing yield—based on historical and forecasted economics (refer to Chapter 10 through 12)—for the Oakdale Mine is estimated to be 45%. It should be noted that the cut-off grade is well below the expected processing yield of the deposit. Other limiting criteria, such as minimum mining thickness or maximum stripping ratio (the ratio of waste to sand excavated) generally do not negatively impact the economics of the Oakdale Mine when considering the results of the geologic data and overall mine planning used to estimate the surface mineable frac sand resources. The limits of the frac sand resources are constrained to those portions of the interpreted sand deposit that: • Are reasonably defined by available drilling and sampling data. • Contain products that meet generally accepted specifications and can be sold at a profit (i.e., be economic). • Honor any legal mining constraints (e.g., property boundaries, environmental setbacks, utility and infrastructure setbacks, etc.). • Adhere to physical mining limitations. Frac sand resources for the Oakdale Mine are assessed for reasonable prospects for eventual economic extraction by reporting: (1) those resources which have been subsequently converted to frac sand reserves after the application of all material modifying factors, and/or (2) those resources which have similar characteristics (i.e.,
6-6 JOHN T. BOYD COMPANY mining conditions, and expected processing yields and qualities) to those converted to frac sand reserves. The criteria employed in developing the estimates of frac sand resources for the Oakdale Mine is supported by historical results and aligns with those employed at similar operations. As such, it is BOYD’s opinion that the stated criteria are reasonable and appropriate for the estimation of frac sand resources at the Oakdale Mine. 6.2.4 Frac Sand Resource Estimate There are no reportable frac sand resources excluding those converted to frac sand reserves for the Oakdale Mine. Quantities of frac sand controlled by Smart Sand within the defined boundaries of the Oakdale Property which are not reported as frac sand reserves are not considered to have potential economic viability; as such, they are not reportable as frac sand resources. 6.2.5 Validation BOYD independently estimated in-place frac sand resources for the Oakdale Mine based on the provided drilling, sampling, and testing data obtained from Smart Sand. Utilizing industry-standard grid modeling techniques we have estimated volumes of frac sand indicated by the available data. Based on the favorable comparison of our estimate to that of Smart Sand’s well-documented geologic exploration and volumetric estimate, we are of the opinion that Smart Sand’s estimate is reasonable and appropriate. Furthermore, it is our opinion that the estimation methods employed are both appropriate and reasonable for the deposit type and proposed extraction methods. 6.3 Frac Sand Reserves 6.3.1 Methodology Estimates of frac sand reserves for the Oakdale Mine were derived contemporaneously with estimates of frac sand resources. To derive an estimate of saleable product tons (proven and probable frac sand reserves), the following modifying factors were applied to the in-place measured and indicated frac sand resources underlying the respective mine plan areas: • A mining recovery factor utilized in the estimates assumes that approximately 5% of the mineable (in-place) frac sand resource will not be recovered for various reasons. Applying this recovery factor to the in-place resource results in the estimated ROM sand tonnage that will be delivered to the wet process plant.
6-7 JOHN T. BOYD COMPANY • A wet plant recovery factor, which accounts for removal of out-sized (i.e., larger than 30-mesh and smaller than 140-mesh) sand was derived from sieve analysis results from drilling data. The overall wet plant recovery is approximately 85.8%. • A 95% dry processing recovery, which accounts for losses in the dry processing plant due to minor inefficiencies, was used in the estimate of the reserves. The overall product yield (after mining and processing losses) for the Oakdale Mine is estimated at 77.3%. That is, for every 100 tons of in-place frac sand resources available, approximately 77.3 tons will be able to be recovered and sold as product. 6.3.2 Classification Proven and Probable frac sand reserves are derived from Measured and Indicated frac sand resources, respectively, in accordance with S-K 1300. BOYD is satisfied that the frac sand reserve classification reflects the outcome of technical and economic studies. Figure 6.2, on the following page, illustrates the reserve classification of the Oakdale frac sand deposit.
6-9 JOHN T. BOYD COMPANY 6.3.3 Frac Sand Reserve Estimate BOYD’s estimate of surface mineable frac sand reserves for the Oakdale Mine totals 228.3 million saleable product tons, as of December 31, 2025. Estimated frac sand reserve tons reported in Table 6.2, below, are based on a LOM plan which, in BOYD’s opinion, is technically achievable and economically viable after the consideration of all material modifying factors. The reported reserves include only frac sand which is owned in fee by Smart Sand, as of December 31, 2025. The frac sand reserves of the Oakdale Mine are generally well-explored and defined. It is our conclusion that approximately 55% of the stated reserves can be classified in the proven reliability category (the highest level of assurance) with the remainder classified as probable. The Oakdale Mine, and other frac sand operations in the area, have a well-established history of mining and selling frac sand products into the various tight shale oil and gas basins. BOYD has assessed that sufficient studies have been undertaken to enable the frac sand resources to be converted to frac sand reserves based on current and proposed operating methods and practices. Changes in the factors and assumptions employed in these studies may materially affect the frac sand reserve estimate. The estimated product distribution of the frac sand reserves is based on available laboratory gradation test data provided by Smart Sand. Grain size distribution and overall yields may vary based on the depth and location at which mining occurs. The economic viability of the stated frac sand reserves is demonstrated by the production and financial projections and marketing information presented in Chapters 10 through 12 of this report. The forecasted sales price used in the estimation of frac sand reserves for the Oakdale Mine is estimated to be $23.08 per ton of finished frac sand (refer to Section 10.5 and Table 12.1 for further details). Mesh Size Proven Probable Total 30/50 41,931 31,410 73,341 50/140 83,090 71,918 155,008 Total 125,021 103,328 228,349 Table 6.2: Oakdale Mine Frac Sand Reserves as of December 31, 2025 Product Tons (000) by Classification
6-10 JOHN T. BOYD COMPANY 6.3.4 Significant Risks and Uncertainties The extent to which the frac sand reserves may be affected by any known geological, operational, environmental, permitting, legal, title, variation, socio-economic, marketing, political, or other relevant issues has been reviewed, if and as warranted. It is the opinion of BOYD that Smart Sand has appropriately mitigated, or has the operational acumen to mitigate, the risks associated with these factors. BOYD is not aware of any additional risks that could materially affect the development of the frac sand reserves. Given the data available at the time this report was prepared, the estimates presented herein are considered reasonable. However, they should be accepted with the understanding that additional data and analysis available after the date of estimate may result in changes to the current estimate. These revisions may be material. Based on our independent estimate and operations review, we have a high degree of confidence that the estimates shown in this report accurately represent the available frac sand reserves controlled by Smart Sand at the Oakdale Mine, as of December 31, 2025. 6.3.5 Reconciliation with Previous Estimates Figure 6.3, on the following page, illustrates the reconciliation between the December 31, 2021, frac sand reserve estimate of 250 million tons and the current frac sand reserve estimate of 228.3 million tons. The largest contributor to the reduction was mining depletion, which accounted for a decrease of approximately 19.4 million tons (7.8%), reflecting normal extraction of reserves during the reporting period. In addition, an estimate revision resulted in a further decrease of approximately 2.2 million tons (0.9%), due to updated surface topography and refinement of reserve boundaries. The combined effect of these changes resulted in a total reserve decrease of 21.6 million tons, or approximately 8.6%, compared to the prior estimated
6-11 JOHN T. BOYD COMPANY Figure 6.3: Reconciliation with Previous Frac Sand Reserve Estimate q:\eng_wp\3555.026 ss - oakdale fy25\wp\report\ch-6 - mineral resources and reserves.docx
7-1 7.0 MINING OPERATIONS 7.1 Mining Method The Oakdale Mine has two distinct mining schemes that are utilized, as the property is bisected by the operation’s infrastructure (rail line spur and loadout facility, access roads, offices, and processing plant areas) into separate eastern and western mining areas. The eastern side of the property generally consists of lowlands with some interspersed wetlands. This area served as the initial mining area for approximately the first five to six years of the operation. Typical excavator and articulated truck method is employed in a series of benches downward. There is very little overburden overlying the sand and the overburden that is stripped is utilized in berms or hauled to a dump area. The sand is drilled and blasted on a very wide pattern to “fluff” or disaggregate the sand grains. The mined sand is crushed then hauled to a wet process plant located near the central region of the property for processing. The pits are continuously dewatered, and the water is pumped into a holding pond at the northeast area of the property prior to sampling and discharging. Currently, and for the immediate future, the majority of the ROM sand is mined from the western side of the property. Here, the “bluffs” are mined which generally lie above ground level to approximately 970 ft amsl in elevation. Typical of other Wonewoc Formation “bluff” mines, there is little overburden, and following vegetation grubbing, benches are drilled and blasted in approximately 50 ft high intervals that progress from the highest elevations downward. Excavators load articulated trucks which haul the ROM material to a primary crusher located near the central region of the property. Figure 7.1, on the following page, illustrates the benching and primary crusher on the west side of the property. The current mine plan and exploration drilling have projected the mineable pits to extend down to a base elevation of approximately 800 ft amsl. Typically, blasting occurs twice per week in the pit. Drilling and blasting are contracted to a third-party vendor. JOHN T. BOYD COMPANY
7-2 JOHN T. BOYD COMPANY Figure 7.1: Western “Bluff” Mining at Oakdale 7.2 Mine Schedule, Equipment, and Staffing The entire operation conforms to a 2-2 3-2 2-3 rotating shift schedule which uses four teams (crews) and two 12-hour shifts to provide 24/7 coverage. Personnel work an average 42 hours per week. The quarry pit generally operates on 12 hours daily utilizing this rotation for the entire operation. The primary pit mobile equipment involved in sand excavation includes: • Four Cat 988 loaders. • Two Cat 982 loaders. • Eight Volvo A45 haul trucks. • Three Cat 745 haul trucks. • One Cat 390 excavator. • One Cat 349 excavator. • One Volvo 480 excavator.
7-3 JOHN T. BOYD COMPANY In addition, there are numerous support vehicles (maintenance trucks, skid steers, water truck, etc.) to complement the fleet. The mine, plants, and loadout operate year-round, with staff consisting of approximately 150 employees. 7.3 Engineering and Planning The primary mine planning consideration is the safe, economical, and regular supply of raw high-quality sand feed to the processing plants. In commercial mining terms, the quantities of overburden removed, and sand excavated each year at the Oakdale Mine is considered modest. Mining plans are relatively simple and very flexible; able to be modified based on demand in a relatively short time frame. The sand deposit is relatively competent, and the mining depths are relatively shallow. As a result, slumping, or collapsing, has not been and is not expected to be a detriment to mining operations. Flooding of the mine’s pits may occur, but is considered manageable with existing pumping equipment. 7.4 Mine Sequence and Production Historical mine production has ranged from 4.5 to 6.7 million ROM tons over the last five years, reflecting adjustments in mining rates consistent with operational planning and reserve management. Forecast mine production is projected to range from approximately 4.2 million ROM tons in 2026 to approximately 5.1 million ROM tons by 2030, after which production is expected to remain relatively constant over the remaining life of the mine. This forecast production profile is consistent with the demonstrated capabilities of the existing mining fleet and processing infrastructure and reflects a sustainable, steady-state operating plan aligned with the long-term capacity of the operation. The key driver of the mining operations is the adequate supply of feed material to the Oakdale Mine’s processing plants. At the projected LOM production rates, the Oakdale operation has an expected mine life of approximately 59 years. Future mine production, and hence the longevity of the mine, is directly related to the energy market demand for frac sand. Actual yearly production volumes may, and are likely to, fluctuate significantly based on this demand.
7-4 JOHN T. BOYD COMPANY The areal extents of the remaining mining areas (as shown in Figure 6.2, on page 6-8) and the geologic characteristics of the sand deposit afford the Oakdale Mine a great deal of operational and planning flexibility. Generally, mining operations are expected to advance in blocks outwards from the processing plant areas to minimize haul distances and expand waste storage capacity. It is BOYD’s opinion that the forecasted production levels for the Oakdale Mine are reasonable, logical, and consistent with typical sand surface mining practices in the region. 7.5 Mining Risks Surface mines face two primary types of operational risks. The first category of risk includes those daily variations in physical mining conditions, mechanical failures, and operational activities that can temporarily disrupt production activities. Several examples are as follows: • Water accumulations/soft floor conditions. • Process water shortages. • Power curtailments. • Variations in grain size consistency. • Encountering excessive clay and other waste material. • Failures or breakdowns of operating equipment and supporting infrastructure. • Weather disruptions (power outages, dust storms, excessive heat etc.). The above conditions/circumstances can adversely affect production on any given day, but are not regarded as “risk issues” relative to the long-term operation of a mining entity. Instead, these are considered “nuisance items” that, while undesirable, are encountered on a periodic basis at many mining operations. BOYD does not regard the issues listed above as being material to the Oakdale Mine’s operations or otherwise compromising its forecasted performance. The second type of risk is categorized as “event risk.” Items in this category are rare, but significant occurrences that are confined to an individual mine, and ultimately have a pronounced impact on production activities and corresponding financial outcomes. Examples of event risks are major fires or explosions, floods, or unforeseen geological anomalies that disrupt extensive areas of proposed or operating mine workings and require alterations of mining plans. Such an event can result in the cessation of production activities for an undefined but extended period (measured in months, and
7-5 JOHN T. BOYD COMPANY perhaps years) and/or result in the sterilization of frac sand reserves. This type of risk is minimal in a relatively simple surface sand mining operation. q:\eng_wp\3555.026 ss - oakdale fy25\wp\report\ch-7 - mining operations.docx
8-1 JOHN T. BOYD COMPANY 8.0 PROCESSING OPERATIONS 8.1 Processing Method Frac sand processing at the Oakdale Mine typically comprises the following three major components: • Wet Plant – ROM material from the pit is delivered to the wet plant where the oversize (e.g., gravel) and slime (e.g., fine sand and silt) material is removed. The wet plant does not crush the material, but predominantly scrubs (i.e., washes) and classifies (i.e., sizes) the raw feed material. • Dry Plant – The damp WIP material produced by the wet plant is dried and screened/sorted into finished products. • Storage and Loadout – Finished products are stored in silos and are discharged via gravity from the bottom of the silos onto either a belt system that feeds the on-site rail loadout for transport on the CP rail line, or into highway trucks that transport finished product to the nearby transload facility for transport on the UP rail line. The Oakdale processing facilities comprise two wash plants, three dry plants, and three rail loadouts that are centered around the centrally-located internal rail line on the property. The original processing plant layout (Wet 1, Dry 1, Loadout 1) was constructed in 2012 on the eastern side of the rail line, and an additional dry plant (Dry 2) was subsequently added to this area which was also fed by Wet 1. The most recent expansion in Q1 2018 included a new fully enclosed wet plant, dry plant, and loadout on the west side of the rail line (Wet 2, Dry 3, Loadout 3). This newer plant is where the majority of the mined sand is now processed and loaded. The east side plants are still utilized for incremental production as a “peaking” type facility when demand for product cannot be satisfied solely from the west side facility. Figure 8.1, on the following page, illustrates the layout and location of the processing and loadout facilities. The overall complex has an approximate annual finished product capacity of 5.5 million tons and is staffed by approximately 150 employees. The number of employees can fluctuate based on product demand. .
8-2 JOHN T. BOYD COMPANY Figure 8.1 Oakdale Processing Plants and Rail Loadouts 8.1.1 Wet Plant The Oakdale Mine utilizes two different wet processing plants, the west plant (Wet 2) and the east plant (Wet 1). ROM material from the pit is hauled to a primary crusher to reduce oversized material before entering the wet plant. Sand that is greater than 30-mesh and less than 140-mesh is removed in a typical screen-hydrosizer-cycone wet classification system. The resulting 30/140-mesh WIP material is stockpiled and decanted before being fed into the dry plants. Silt and fine waste (<140-mesh) is captured in a series of ponds. Plant process water is recycled from these ponds. Each wet plant has a nominal capacity of approximately 3 million tons per year, or 650 tons per hour (tph), of WIP material. The west plant produces the majority of the sand and the east plant is utilized during periods of high demand. 8.1.2 Decant/Dry Plant After decanting, the damp 30/140-mesh material produced at the wet process plants is loaded into a feed hopper and metered into one of five Carrier fluid bed dryers. Each dryer has a nominal finished capacity of approximately 1.1 million tons per year. Each dryer operates in the 220 tph to 250 tph range of feed input depending on moisture content. Three dryers are located on the east side serving the dry plants there, and two dryers are located within the west plant. Once the sand is dried it is separated by Rotex multi-deck screens into finished product sizes. The material is then conveyed to storage silos before being loaded into railcars. The plant produces mainly 30/50-mesh, 40/70-
8-3 JOHN T. BOYD COMPANY mesh, and 70/140-mesh (100-mesh) products. Figure 8.2 shows the east side wet plant and a dry plant. Figure 8.2 East Wet 1 and Dry 2 8.1.3 Storage and Loadout Finished products are stored in 13 product silos (6 at the west plant, 7 at the east plants). Approximate finished storage capacity of all the silos totals 36,000 tons. There are three on-site rail loadouts that service the CP rail line; one loadout is supplied directly by the west plant, and the other two loadouts are located on the east side at Dry 1 and Dry 2. There is also a nearby fourth transloading facility, located 3 miles north of the mine in Byron, Wisconsin, that services the UP rail line. Finished product is hauled to this facility by truck. The on-site rail spur is capable of loading unit train shipments and the off- site loadout is a manifest loadout. Figure 8.3, on the following page, shows the two east side loadouts.
8-4 JOHN T. BOYD COMPANY ` Figure 8.3 East Side Rail Loading Facilities 8.2 Production From a processing perspective, historical finished sand production has ranged from 3.4 million tons to 4.9 at peak levels, reflecting adjustments in plant throughput consistent with operational planning and product demand. Forecast finished sand production is projected to range from approximately 3.3 million tons in 2026 to approximately 5.1 million tons by 2030, after which production is expected to remain relatively constant over the remaining life of the operation. This forecast production rate is consistent with the demonstrated capacity and performance of the existing processing facilities, including crushing, washing, drying, and classification circuits, and reflects a sustainable steady-state throughput level that can be reliably maintained over the long term. 8.3 Processing Risks BOYD is unaware of any reported interruptions, outages, shortages, or failures related to processing operations that have materially affected the Oakdale Mine. Given the operation is well-established, we opine that there is a low risk of such events materially affecting the estimates of frac sand reserves presented herein.
8-5 JOHN T. BOYD COMPANY Based on our review, it is BOYD’s opinion that the processing methods and existing equipment at the plants are sufficient for the forecasted production of finished frac sand products. q:\eng_wp\3555.026 ss - oakdale fy25\wp\report\ch-8 - processing operations.docx
9-1 JOHN T. BOYD COMPANY 9.0 MINE INFRASTRUCTURE 9.1 Overview All of the basic infrastructure required for the ongoing operation of the Oakdale Mine is in place. Figure 6.2 illustrates the general layout of the site and infrastructure at the subject operation. Surface facilities currently located on the Oakdale property are well constructed and have the necessary capacity/capabilities to support Smart Sand’s near-term operating plans. Operational preference may lead to the upgrading of some existing facilities if the operation expands in the future. BOYD is unaware of any reported interruptions, outages, shortages, or failures to infrastructure requirements that have materially affected the Oakdale Mine’s operations. Given the operation is well-established, we opine that there is a low risk that such events would materially affect the estimates of frac sand reserves presented herein. 9.2 Transportation The Oakdale Mine is serviced by several roads maintained by the local municipality, county, and state governments. These roads are either paved or well-maintained graded roadways. Road access is available year-round. Oakdale has a series of on-site loadouts and a rail loop with a capacity of several hundred railcars. Finished frac sand products are transported via rail through either the rail spur access at the north end of the property on the CP rail line, or through an off-site transloading facility on the UP rail line. 9.3 Utilities The Oakdale Mine is serviced by three phase power and a natural gas pipeline that are routed along County Road CA and into the plant at the southern end of the property. Plant process water is supplied by surface water retention ponds and a drilled high-capacity water well if needed. Additionally, wash process water is recycled after fines are removed via settling in a series of constructed ponds.
9-2 JOHN T. BOYD COMPANY 9.4 Tailings Disposal The mining and processing of frac sand at the Oakdale Mine creates a substantial amount of tailings (i.e., waste material). These tailings are typically a mixture of clay, very fine sand, and other non-silica minerals. As the mine progresses, silt ponds are constructed in mined-out areas, where the solid materials settle to the bottom and water is recovered for reuse. 9.5 Other Structures and Facilities Wastewater from offices and other buildings is collected via holding tanks and disposed of on a regular basis. Potable water is provided by a public water system. On-site facilities include a guard house, office, shop, and a quality laboratory located in the dry process plants. q:\eng_wp\3555.026 ss - oakdale fy25\wp\report\ch-9 - infrastructure.docx
10-1 JOHN T. BOYD COMPANY 10.0 MARKET ANALYSIS 10.1 Market Background The modern North American frac sand industry emerged alongside the shale oil and gas revolution of the mid-2000s, when horizontal drilling and multi-stage hydraulic fracturing dramatically increased demand for high-quality proppant. Early shale completions placed a premium on high crush strength and proppant conductivity, which positioned NWS— sourced primarily from high-purity quartz formations in Wisconsin and Minnesota—as the industry’s benchmark material. NWS deposits such as the Saint Peter, Jordan, Wonewoc, and Mount Simon sandstones exhibit excellent sphericity, roundness, and >99% quartz content, characteristics that deliver superior performance under high closure stresses. As a result, NWS dominated the market through the early 2010s and was shipped via unit trains to every major unconventional basin, despite significant transportation costs associated with 1,000 to 1,500-mile rail hauls. Following the 2014–2016 oil price collapse, operators shifted from quality-driven to cost-optimized completion designs, accelerating adoption of high-proppant-intensity fracturing and longer laterals. This sharply increased total proppant mass per well and magnified logistics as a cost driver—often more than half of delivered sand cost in the Permian was attributable to transportation rather than mine-gate pricing. In response, the industry began developing regional or in-basin sands that could be trucked short distances from the mine to the well pad. Texas brown sands and analogous formations in Oklahoma and the Haynesville provided sufficient crush strength for many reservoir stress environments, even though they lacked the conductivity profile of NWS. Between 2016 and 2019, more than 20 new in-basin mines were constructed in the Permian alone, creating substantial overcapacity and dramatically reducing dependence on Midwestern supply. Industry analysts describe this period as a structural market realignment, with Permian in-basin penetration rising toward 70 to 80% of total proppant demand by 2019. The result is a bifurcated market architecture that persists today. In-basin sand now serves as the volume backbone for most major oil-dominant basins, driven by logistics efficiency, last-mile delivery integration, and reduced total well cost. Mine-gate pricing and transportation networks have become strategic differentiators, with infrastructure innovations—such as West Texas overland conveyor systems—further reducing reliance on long-haul rail. Meanwhile, NWS functions as a performance-oriented niche product, selected for wells with elevated closure stresses, complex fracture geometries, or estimated ultimate recovery (EUR) sensitive economics where conductivity degradation
10-2 JOHN T. BOYD COMPANY from regional sands may be unacceptable. Recent technical assessments indicate that while in-basin sands meet operational requirements for most Permian completions, NWS retains measurable conductivity and permeability retention advantages that can translate to improved long-term recovery in certain reservoir conditions. The competitive relationship between NWS and in-basin producers is best described as selective substitution rather than universal displacement: • In-basin producers dominate on delivered cost, making them the default choice for most high-volume Permian and Haynesville completions. • NWS maintains a defensible niche in wells with elevated closure stress, complex fracture networks, or high EUR sensitivity, where conductivity degradation from lower-quality sands may materially impact long-term production. • Supply elasticity differs sharply – in-basin suppliers expand and contract capacity quickly, whereas NWS supply is slower to adjust, leading to different pricing cycles across segments. • Vertical integration is a growing differentiator, with in-basin suppliers capturing value through last-mile logistics and storage, while NWS suppliers increasingly rely on strategic partnerships with railroads, terminals, and pressure pumpers to stabilize demand. Basin‑level competitive dynamics in frac sand markets are driven mainly by differences in logistics, cost structures, and sand quality relative to specific shale plays: Appalachia (Marcellus/Utica) • NWS retains strong share due to geological requirements and proximity to Midwestern supply. • Limited local sand resources of comparable quality. Bakken • Combination of NWS and regional sands; long rail distances common. • Delivered cost is competitive versus trucking local alternatives across North Dakota. Duvernay • Oil window – regional sands increasingly adopted for cost efficiency. • Deep gas window – NWS remains preferred due to high stress. Eagle Ford • Mixed NWS and regional sands historically; increasing in-basin supply reducing NWS share.
10-3 JOHN T. BOYD COMPANY • Logistics costs remain material due to dispersed well locations. Haynesville • High pressure environment increases NWS relevance, but many wells still use in- basin sand for cost reasons. • Delivered-cost advantages strongly influence procurement decisions. Montney • Among North America’s deepest unconventional plays. • NWS remains the primary proppant due to crush-strength requirements. • Regional Canadian sands are used selectively in shallower Montney benches. Permian Basin • In-basin sand has >80% market share. • NWS used only for selective high-stress benches or operator-specific conductivity programs. • Logistics integration (trucking fleets, silos, conveyors) is the dominant competitive advantage. 10.2 Historical Sales Smart Sand supplies a range of frac sand products to major oilfield services companies and E&P companies operating in various North American oil and gas basins. Recent historical sales data (on a consolidated basis) provided by Smart Sand are summarized in Table 10.1, below. 2021 2022 2023 2024 2025 Product Sales (000 tons): Oakdale 2,350 3,386 3,353 3,534 3,551 Ottawa 839 945 790 566 582 Blair - - 402 1,150 1,309 Total 3,189 4,330 4,545 5,250 5,442 Net Sand Revenue ($ 000) 61,383 126,662 144,801 160,653 143,026 Average Selling Price ($/ton sold) 19.25 29.25 31.86 30.60 26.28 Note: Totals may not sum due to rounding. Net Sand Revenue and Average Selling Price are at the mine-gate. Table 10.1: Historical Sales Data
10-4 JOHN T. BOYD COMPANY As shown in Figure 10.1, below, almost 85% of Smart Sand’s sales in 2025 were of 40/70 and 100 Mesh frac sand. Figure 10.1: Frac Sand Sales by Mesh Size In 2025, almost 68% of Smart Sand’s finished frac sand was destined for the Marcellus and Bakken basins (as shown in Figure 10.2, below). Figure 10.2: Frac Sand Sales by Basin/Play Smart Sand has structured long-term contracts with some customers outlining volume commitments and, in some cases, fixed pricing. Smart Sand also services customers on a spot basis where volume thresholds are not set, and orders are serviced on an
10-5 JOHN T. BOYD COMPANY as-available basis at prevailing market prices. In 2025, contract sales accounted for almost 69% (on a tonnage basis) of all frac sand sales for Smart Sand. In 2025, the top five customers (by sales volume) accounted for over 62%of total sales for Smart Sand, while the top ten customers accounted for over 86% of total sales. 10.3 Market Outlook NWS remains a critical proppant for high-performance completions in oil and gas wells, particularly in deep or high-stress reservoirs. While in-basin sand dominates bulk volumes, NWS continues to hold a defensible position where premium proppant performance is essential. The following outlines BOYD’s demand, supply dynamics, pricing expectations, and key market risks from the NWS perspective. Demand Outlook • Baseline demand for NWS remains stable, driven by its use in wells requiring high- performance proppant, such as deeper or stress-critical reservoirs. • Moderate growth is expected from increased completion intensity (lb/ft) and wider adoption of simul-frac techniques, which can raise sand consumption per crew per day. • NWS demand is less sensitive to rig count fluctuations than in the past because wells with longer laterals and more stages still require performance-critical proppant in smaller quantities. Supply Outlook • NWS supply remains constrained by permitting challenges, limited high-quality deposits, and the declining share of key oil plays. • Expansion potential is limited; few deposits can economically supply performance- critical sand in large volumes. • This constrained supply supports stable premium pricing and reinforces NWS as a niche but essential component in completions that demand superior proppant performance. Balance & Pricing • Market conditions are expected to be balanced to slightly oversupplied for in-basin sands, while NWS retains its premium position. • Pricing for NWS should remain stable, with periodic uplifts linked to deeper or higher-stress drilling activity. • Delivered-cost differentials continue to shape procurement, ensuring that NWS maintains a selective but high-value role in completions.
10-6 JOHN T. BOYD COMPANY Downside Market Risks • Reduced drilling or completion activity in high-spec wells could compress NWS demand. • Improved in-basin proppants that encroach on NWS performance could challenge market share. • Logistical constraints, regulatory hurdles, or environmental compliance issues could impact supply consistency or cost. Upside Market Opportunities • Increases in completion intensity or longer lateral lengths could boost per-well NWS consumption. • Renewed demand for high-performance proppants in deeper or more challenging reservoirs could tighten NWS availability. • Supply chain or regional logistical bottlenecks may elevate delivered pricing and improve margins for NWS producers. • Technology adoption in transportation and last-mile delivery could create competitive advantages for integrated NWS suppliers. NWS is unlikely to reclaim historical market share for bulk sand but will remain critical where premium performance is non-negotiable. 10.4 Market Entry Strategies As an existing producer with a lengthy commercial history and established customer base, it is BOYD’s opinion that market entry strategies are not required for continued sale of the Oakdale Mine’s frac sand products. 10.5 Future Sales BOYD’s projections of sales volumes and frac sand prices for the Oakdale Mine are informed by Smart Sand’s historical operating results, their budget forecasts, and our knowledge of frac sand markets. Forecasted prices are based on sales of various sizes (e.g., 30/50, 40/70, and 70/140-mesh) of finished frac sand. Our frac sand sales forecast for the Oakdale Mine is provided in Table 10.2, on the following page.
10-7 JOHN T. BOYD COMPANY BOYD is not aware of any material contracts for the sale of frac sand from the Oakdale Mine. Q:\ENG_WP\3555.026 SS - Oakdale FY25\WP\Report\CH-10 - Market Analysis.docx Sales Average Selling Price Year(s) (000 tons) ($/ton) 2026 3,264 23.08 2027 3,427 23.08 2028 3,598 23.08 2029 3,778 23.08 2030 3,967 23.08 2031 3,967 23.08 2032 3,967 23.08 2033 3,967 23.08 2034 3,967 23.08 2035 3,967 23.08 2036–2084 190,480 23.08 Total 228,349 Minimum 23.08 Maximum 23.08 Average 23.08 Table 10.2: Frac Sand Sales Forecast
11-1 JOHN T. BOYD COMPANY 11.0 CAPITAL AND OPERATING COSTS 11.1 Basis of Capital and Operating Cost Estimates The production and unit cost estimates for the Oakdale Mine are informed by Smart Sand’s historical performance and internal budget forecasts, in combination with BOYD’s familiarity with mining costs at similar operations. Operating volumes are well-defined and understood, as are mining and processing productivities at the Oakdale operation. As such, it is BOYD’s opinion that the production and financial projections are reasonable for an operating mine and are likely to be within ±20% accuracy level. This section contains forward-looking information related to capital and operating cost estimates for the Oakdale Mine. There are inherent known and unknown risks and uncertainties associated with all mining operations. These risks, uncertainties, and other factors are not quantifiable, but include, and are not limited to, adverse general economic conditions, operating hazards, inherent uncertainties in interpreting engineering and geologic data, fluctuations in commodity prices and prices for operational services, government regulation and political risks, as well as other risks commonly associated with the mining industry. 11.2 Capital Expenditures 11.2.1 Historical Capital Expenditures Historical capital expenditures have consisted primarily of sustaining capital required to maintain production capacity and supporting infrastructure at the Oakdale Mine. Discretionary capital has been limited and generally directed toward incremental improvements, equipment upgrades, and operational optimization initiatives, rather than material expansion or development activities. Capital expenditures at the Oakdale Mine over the last two years are summarized in Table 11.1, below. 2024 2025 Capital Expenditures ($ 000) 3,566 6,171 Capital Expenditures ($/ton sold) 1.01 1.73 Table 11.1: Historical Capital Expenditures
11-2 JOHN T. BOYD COMPANY 11.2.2 Projected Capital Expenditures The Oakdale Mine is currently in steady-state production and is not dependent on significant development or expansion capital to maintain planned output levels. Forecast capital expenditures are limited primarily to sustaining capital required to maintain equipment, infrastructure, and production capacity over the life of mine. Other capital expenditures are largely discretionary in nature and relate to optimization, efficiency improvements, or potential expansions. Accordingly, continued operations are not contingent upon material additional capital investment beyond normal sustaining requirements. Projected capital expenditures for the Oakdale Mine over the next five years are summarized in Table 11.2, below. BOYD projected annual sustaining capital expenditures after 2030 at a unit cost of $1.01 per ton sold, this includes maintenance of production equipment as well as other items, for the operation. This factor is based on our judgment and experience with similar operations. 11.3 Operating Costs 11.3.1 Historical Operating Costs Operating costs (i.e., cash production costs) comprise all site-level cash expenditures incurred in the extraction, processing, and production of the finished frac sand products. These costs include mining and processing activities, site-specific general and administrative expenses (including non-income taxes and fees), and ongoing reclamation. Cash production costs at the Oakdale Mine over the last two years are summarized in Table 11.3, on the following page. 2026 2027 2028 2029 2030 Capital Expenditues ($ 000) 4,000 4,000 4,000 4,000 4,000 Capital Expenditues ($/ton sold) 1.23 1.17 1.11 1.06 1.01 Table 11.2: Forecasted Capital Expenditures
11-3 JOHN T. BOYD COMPANY 11.3.2 Projected Operating Costs Future operating cost estimates were developed based on recent actual costs and considering specific operational activity levels and cost drivers. The estimates consider current and expected labor headcount and salaries, major consumables and unit prices, power costs, and equipment and maintenance costs. The total operating cost estimate includes all site costs related to mining, processing, loading, and site-specific general and administrative expenses (including non-income taxes and fees). Excluded from the projected operating costs are: (1) allocated corporate selling, general, and administrative (SG&A) expenses; and (2) production royalties. As shown in Table 11.4, on the following page, The Oakdale Mine’s projected operating costs are expected to remain relatively consistent (on an uninflated basis) with 2025 results. As such, the projected total cash production cost over the life of the mine averages $12.98 per ton sold over the life of the mine. As the operation is in a steady state, BOYD considers the future operating cost estimates to be reasonable and appropriate. 2024 2025 2024 2025 Cash Production Costs: Mining 9,306 14,070 2.64 3.95 Production 18,992 19,252 5.38 5.41 Logistics 1,228 971 0.35 0.27 Maintenance 5,381 4,260 1.52 1.20 Safety 450 421 0.13 0.12 Quality 9 420 0.00 0.12 Environmental 730 627 0.21 0.18 Plant Management 1,577 1,534 0.45 0.43 Other 4,581 5,071 1.30 1.43 Total 42,255 46,627 11.97 13.10 Note: Totals may not sum due to rounding. $ 000 $/ton sold Table 11.3: Historical Operating Costs
11-4 JOHN T. BOYD COMPANY q:\eng_wp\3555.026 ss - oakdale fy25\wp\report\ch-11 - capital and operating costs.docx 2026 2027 2028 2029 2030 Cash Production Costs ($ 000): Mining 13,609 14,601 15,644 16,738 17,887 Production 18,150 19,474 20,864 22,324 23,856 Logistics 2,421 2,597 2,783 2,977 3,182 Maintenance 4,002 4,293 4,600 4,922 5,260 Safety 406 435 466 499 533 Quality 314 337 361 386 412 Environmental 692 742 795 851 910 Plant Management 1,339 1,437 1,539 1,647 1,760 Other (1,661) (1,782) (1,910) (2,043) (2,183) Total 39,271 42,135 45,142 48,300 51,616 Cash Production Costs ($/ton sold): Mining 4.17 4.26 4.35 4.43 4.51 Production 5.56 5.68 5.80 5.91 6.01 Logistics 0.74 0.76 0.77 0.79 0.80 Maintenance 1.23 1.25 1.28 1.30 1.33 Safety 0.12 0.13 0.13 0.13 0.13 Quality 0.10 0.10 0.10 0.10 0.10 Environmental 0.21 0.22 0.22 0.23 0.23 Plant Management 0.41 0.42 0.43 0.44 0.44 Other (0.51) (0.52) (0.53) (0.54) (0.55) Total 12.03 12.30 12.55 12.78 13.01 Note: Totals may not sum due to rounding. Table 11.4: Forecasted Operating Costs
12-1 JOHN T. BOYD COMPANY 12.0 ECONOMIC ANALYSIS 12.1 Approach The economic analysis presented in this chapter was prepared by BOYD for the purpose of confirming the commercial viability of the Oakdale Mine’s reported frac sand reserves and not for the purpose of valuing the Oakdale operation, or its assets. The economic analysis contains forward-looking information related to the projected operating and financial performance of the Oakdale Mine. This projection involves inherent known and unknown risks and uncertainties, some of which may be outside of Smart Sand’s control. Smart Sand, as with all mining companies, actively evaluates, changes, and modifies business and operating plans in response to various factors that may affect operational and/or financial results. Actual results, production levels, operating expenses, sales realizations, and all other modifying factors could vary significantly from the assumptions and estimates provided in this analysis. Risk is subjective, as such, BOYD recommends that each reader should evaluate the project based on their own investment criteria. The financial model used for the purposes of the economic analysis forecasts future free cash flow from frac sand production and sales over the life cycle of the Oakdale Mine using the annual forecasts of production, sales revenues, and operating and capital costs discussed earlier in this report. A DCF analysis, in which future free cash flows are discounted to present value, is used to derive an NPV for the frac sand reserves. The use of DCF-NPV analysis is a standard method within the mining industry to assess the economic value of a project after allowing for the cost of capital invested. The financial evaluation of the Oakdale Mine has been undertaken on a simplified after-tax basis and does not reflect Smart Sand’s corporate tax structure. NPV is calculated using an after-tax discount rate of 12% (NPV12). Cash flows were assumed to occur in the middle of each year and are discounted to January 1, 2026. Cost estimates and other inputs to the cash flow model for the project have been prepared using constant 2025 money terms, i.e., without provision for inflation. The internal rate of return and project payback were not calculated, as there was no initial investment (sunk costs) considered in the financial model provided herein. A suite of sensitivities was calculated to evaluate the effect of the main drivers of economic performance, including variations in sales prices, operating costs, and capital costs.
12-2 JOHN T. BOYD COMPANY 12.2 Assumptions and Limitations Cash flow projections for the Oakdale Mine have been generated from the annual forecasts of production, sales revenues, and operating and capital costs discussed earlier in this report. A summary of the key assumptions and limitations is provided below: • Sales volumes of finished frac sand through 2030 are based on Smart Sand’s budget projections and are expected to remain constant thereafter. Forecasted sales volumes are at or below the capacity of the Oakdale processing facilities (approximately 5.5 million tons of finished frac sand per year). • ROM production requirements are based on an expected processing yield of 77.3% and will remain in line with expected sales volumes. Forecasted ROM production is at or below the capacity of the existing mining equipment and related infrastructure. • Forecasted revenues are based on projected sales of various sizes (e.g., 30/50, 40/70, and 70/140-mesh) of finished frac sand with a weighted average mine-gate sales price of $23.08 per ton in 2026, and remain relatively constant over the life of the reserves. Additional transportation and delivery costs are assumed to be incurred by the customer or added as a pass-through to the mine-gate price. Market specifications and forecasted sales prices for Smart Sand’s finished frac sand from the Oakdale Mine are provided in Chapter 10. • Projected operating costs are discussed in Chapter 11 and include all site costs related to mining, processing, loading, and general and administrative expenses (including non-income taxes, fees, and royalties). Unit operating costs are expected to remain relatively constant over the life of the operation. • Projected capital expenditures are discussed in Chapter 11 and include sustaining/maintenance of operations costs. Unit capital expenditures are expected to remain relatively constant over the life of the operation. • No allowance for changes in or the recapture of working capital has been made in the financial analysis as the Oakdale Mine business unit is a going concern. Exclusion of working capital from the financial analysis does not have a material impact on the NPV calculation. • Depreciation and amortization expenses through 2030 are based on Smart Sand’s budget projections and are expected to remain constant thereafter. • Allocation of corporate SG&A expenses is based on the Oakdale Mine’s relative share of Smart Sand’s operating performance. • Anticipated royalty payments have been provided by Smart Sand. • Income taxes are based on: − Federal Business Income Tax rate of 21%. − Wisconsin State Income Tax rate of 7.9%.
12-3 JOHN T. BOYD COMPANY • Asset recovery/salvage values were not included in the valuation. • Post-mining reclamation costs were not included in the valuation. Based on the information available at the time of our analysis, it is BOYD’s opinion that the production and financial projections provided herein are reasonable and are accurate to within ±20%. 12.3 Financial Model Results Table 12.1, below, provides a summary of the estimated remaining life of reserves financial results for the Oakdale Mine. Estimated LOM pre-tax and after-tax cash flows for frac sand production from the Oakdale Mine are presented in Table 12.2, on the following page. Units Remaining Life of Mine Total Expected Remaining Life years 59 Production: ROM Production 000 tons 295,583 Product Sales 000 tons 228,349 Total Revenues $ millions 5,270.5 Average Selling Price $/t sold 23.08 Total Cash Production Costs $ millions 2,963.0 Average Cash Production Cost $/t sold 12.98 Capital Expenditures $ millions 232.1 Average Capital Expenditures $/t sold 1.02 Pre-Tax: Cash Flow $ millions 1,126.8 NPV ₁₂ $ millions 160.0 After-tax: Cash Flow $ millions 1,036.0 NPV ₁₂ $ millions 149.3 Table 12.1: Financial Results
12-4 JO H N T. B O Y D C O M PA N Y Description Units 2026 2027 2028 2029 2030 Total Production Statistics: ROM Production 000 tons 4,225 4,436 4,658 4,891 5,135 25,675 51,350 51,350 143,863 295,583 Process Yield % 77.3 77.3 77.3 77.3 77.3 77.3 77.3 77.3 77.3 77.3 Product Sales 000 tons 3,264 3,427 3,598 3,778 3,967 19,835 39,670 39,670 111,140 228,349 Sand Revenue $ 000 75,328 79,095 83,049 87,202 91,562 457,810 915,620 915,620 2,565,213 5,270,499 Average Selling Price $/ton sold 23.08 23.08 23.08 23.08 23.08 23.08 23.08 23.08 23.08 23.08 Cash Production Costs $ 000 39,272 42,134 45,142 48,301 51,617 258,085 516,170 516,170 1,446,109 2,963,000 Average Cash Production Costs $/ton sold 12.03 12.29 12.55 12.78 13.01 13.01 13.01 13.01 13.01 12.98 Contribution Margin $ 000 36,056 36,961 37,907 38,901 39,945 199,725 399,450 399,450 1,119,104 2,307,499 SG&A Allocation $ 000 18,148 17,587 16,997 16,377 15,728 78,640 157,280 157,280 440,638 918,675 Royalties $ 000 428 450 472 496 520 2,600 5,200 5,200 14,568 29,934 EBITDA $ 000 17,480 18,924 20,438 22,028 23,697 118,485 236,970 236,970 663,898 1,358,890 DDA $ 000 18,013 18,013 18,013 18,013 18,013 90,065 180,130 180,130 504,655 1,045,045 Operating Income (EBIT) $ 000 (533) 911 2,425 4,015 5,684 28,420 56,840 56,840 159,244 313,846 Taxes $ 000 - 263 701 1,160 1,643 8,213 16,427 16,427 46,021 90,855 EBIAT $ 000 (533) 648 1,724 2,855 4,041 20,207 40,413 40,413 113,222 222,990 Capital Expenditures $ 000 4,000 4,000 4,000 4,000 4,000 20,000 40,000 40,000 112,065 232,065 Net Income $ 000 (4,533) (3,352) (2,276) (1,145) 41 207 413 413 1,158 (9,074) Pre-tax Cash Flow $ 000 13,480 14,924 16,438 18,028 19,697 98,485 196,970 196,970 551,834 1,126,826 Discounted at 12% $ 000 12,737 12,591 12,382 12,125 11,828 42,638 37,922 12,210 5,556 159,990 After-tax Cash Flow $ 000 13,480 14,661 15,737 16,868 18,054 90,272 180,543 180,543 505,812 1,035,970 Discounted at 12% $ 000 12,737 12,369 11,854 11,345 10,842 39,082 34,760 11,192 5,092 149,273 John T. Boyd Company Mining and Geological Consultants February 2026 2056 to 2084 Table 12.2 ANNUAL PRODUCTION AND CASH FLOW FORECAST OAKDALE MINE Prepared For SMART SAND, INC. By 2031 to 2035 2036 to 2045 2046 to 2055
12-5 JOHN T. BOYD COMPANY DCF-NPV on a pre-tax and after-tax basis, using discount rates of 8%, 10%, 12% (the base case), and 15% were calculated utilizing the projected cash flows. Table 12.3 summarizes the results of the pre-tax and after-tax DCF-NPV analyses: As shown, the pre-tax DCF-NPV ranges from approximately $127.8 million to $238.7 million. The after-tax DCF-NPV ranges from approximately $119.7 million to $221.6 million. The economic analysis confirms that the Oakdale Mine generates positive pre- and after-tax financial results and a real NPV12 of $149.3 million. As such, it is BOYD’s opinion that the Oakdale Mine’s frac sand reserves have demonstrated economic viability. 12.4 Sensitivity Analysis Table 12.4, below, shows the sensitivity of the project after-tax for a cash flow discounted at 12% (NPV12) to a variation over a range of 20% above and below the base case in: (1) average selling prices and (2) cash production costs. 8% 10% 12% 15% Pre-Tax 238.7 191.9 160.0 127.8 After-Tax 221.6 178.6 149.3 119.7 Table 12.3: DCF-NPV Analysis NPV ($ millions) -20% -15% -10% -5% 0% 5% 10% 15% 20% -20% 91.3 126.1 155.4 182.8 210.3 237.7 265.1 292.5 319.9 -15% 69.9 108.5 139.5 167.6 195.0 222.5 249.9 277.3 304.7 -10% 48.5 87.1 122.9 152.3 179.8 207.3 234.7 262.1 289.5 -5% 27.1 65.7 104.3 136.3 164.6 192.0 219.5 246.9 274.3 0% 5.8 44.3 82.9 119.6 149.3 176.8 204.2 231.7 259.1 5% -15.6 22.9 61.5 100.0 133.2 161.6 189.0 216.5 243.9 10% -37.0 1.5 40.1 78.7 116.4 146.2 173.8 201.2 228.7 15% -58.4 -19.9 18.7 57.3 95.8 130.1 158.6 186.0 213.5 20% -79.8 -41.2 -2.7 35.9 74.4 113.0 143.2 170.8 198.2 C as h P ro du ct io n C os ts Table 12.4: After-Tax NPV12 Sensitivity Analysis ($ millions) Revenues
12-6 JOHN T. BOYD COMPANY As expected, the project is most sensitive to changes in product pricing and production costs. The Oakdale Mine generates negative value only if costs are increased substantially and selling prices are reduced dramatically. The project is less sensitive to capital costs. There is little to no impact varying the capital costs from 70% to 130% of the base case. This analysis demonstrates the project value to be relatively robust, with positive NPVs reported across a wide range of assessed values. q:\eng_wp\3555.026 ss - oakdale fy25\wp\report\ch-12 - economic analysis.docx
13-1 JOHN T. BOYD COMPANY 13.0 PERMITTING AND COMPLIANCE 13.1 Permitting Requirements and Status Several permits, and compliance with federal, state, and municipal regulations are required for mining, processing, and related activities at the Oakdale Mine. The mine’s operations are predominantly regulated under a Monroe County, Wisconsin non-metallic reclamation permit, which contains detailed reclamation plans for the property. Mine operators must submit annual reports to Monroe County containing information on the reclamation status of their mines and pay annual fees based on the disturbed acres, as well as providing written certification that the reclamation plan is being followed. Additional permitting is regulated by Wisconsin state governmental agencies—The Wisconsin Department of Natural Resources (WDNR) or the Wisconsin Department of Agriculture, Trade & Consumer Protection (WDATCP)—and the U.S. Army Corps of Engineers (USACE). Permitting requirements include various Air Permits and Storm Water Management permits. Smart Sands monitors air emissions and has also developed an Environmental Management System and Quality Management System, successfully completing an outside surveillance audit of their Environmental Management System to the ISO 14001: 2015 standard on June 21, 2019. A significant portion of the Probable Reserves areas on the Oakdale property underlie current wetland areas. These areas will be mitigated as designated wetlands prior to mining. These reserves are not in the current five-year plan. A summary of the permits for the Oakdale Mine is provided in Table 13.1, below. BOYD reviewed the permits necessary to support continued operations at the Oakdale Mine, with the required permits appearing to be valid and in good standing.
13-2 JOHN T. BOYD COMPANY The approved permits and certifications are adequate for the continued operation of the mine and processing facilities. New permits, permit revisions, and/or renewals may be necessary from time to time to facilitate future operations. Given sufficient time and planning, Smart Sand should be able to secure new permits, as required, to maintain its planned operations within the context of current regulations. 13.2 Environmental Studies It is BOYD’s understanding that various studies related to wetland delineation and ambient air monitoring have been completed for the Oakdale Mine. As part of the state and federal permitting process, various environmental assessments have been conducted and reviewed by the relevant local, state, and federal agencies. As the necessary permits for mining and processing operations have been issued, it is BOYD’s understanding that all environmental assessments have been accepted by the relevant regulatory bodies, and no material issues were found. 13.3 Waste Disposal and Water Management The coarse refuse generated from the sand processing operations is stockpiled and used in the construction of impoundments or backfilled into dredge ponds or previously mined pits. The fine refuse generated from the sand processing operations is disposed of by pumping it into dredge or impoundment ponds. Waste disposal facilities are in place for current mining operations, with plans to expand the disposal facilities to meet life of reserve storage requirements. Please refer to Section 9.4 for a detailed description of these facilities. Water control structures are in place and function as required by regulatory agencies. 13.4 Compliance Mine safety is regulated by MSHA, as are all mining operations. MSHA inspects the facilities, at a minimum, twice a year. Smart Sand’s safety record compares favorably with its regional peers. Based on our review of information provided by Smart Sand and available public information, it is BOYD’s opinion that the Oakdale Sand Mine’s record of compliance with applicable mining, water quality, and environmental regulations is generally superior
13-3 JOHN T. BOYD COMPANY to that of the industry. BOYD is not aware of any regulatory violation or compliance issue which would materially impact the estimated frac sand reserves. 13.5 Plans, Negotiations, or Agreements New permits and certain permit amendments/revisions require public notification. The public is made aware of pending permits by advertisement in local newspapers. Additionally, a copy of the application is retained at the local county’s public library for review. A comment period follows the last advertisement date to allow the public to submit comments to the regulatory authority. BOYD is not aware of any community or stakeholder concerns, impacts, negotiations, or agreements that would materially impact the estimated frac sand reserves. 13.6 Post-Mining Land Use and Reclamation Under current regulations in Wisconsin, the WDNR governs surface mining reclamation, outlining requirements in Chapter NR 135 of the Wisconsin Administrative Code. WDNR requires reclamation permits and plans be approved prior to beginning mining operations and requires operators to provide financial guarantees ensuring their ability to complete approved reclamation plans. Local ordinances for non-metallic mining reclamation plans are also enforced by each county, or incorporated areas within a county, that ensure non-metallic mining operations are reclaimed to meet standardized reclamation requirements, ground stabilization, revegetation, surface water management, groundwater quality, development and restoration of natural habitats, and the removal of refuse. As a matter of good mining practice, Smart Sand acts to conduct progressive reclamation throughout the operation’s mining life to minimize risk and costs at closure. Mine site reclamation costs are included in the capital and operating costs discussed in Chapter 11 and included in the economic analysis presented in Chapter 12. 13.7 Local Procurement and Hiring BOYD is not aware of any commitments for local procurement or hiring. Smart Sand reports making efforts to source supplies and materials from regional vendors. The workforce is likewise located in the regional area.
13-4 JOHN T. BOYD COMPANY Smart Sand’s stated core values include making positive impacts in the communities in which it operates. In addition to the payment of income taxes and other local community taxes such as property taxes and royalties, Smart Sand supports, financially and otherwise, local community endeavors. q:\eng_wp\3555.026 ss - oakdale fy25\wp\report\ch-13 - permitting and compliance.docx
14-1 JOHN T. BOYD COMPANY 14.0 INTERPRETATION AND CONCLUSIONS 14.1 Findings BOYD’s independent technical assessment was conducted in accordance with S-K 1300 and concludes: • Sufficient data have been obtained through the site exploration and sampling programs and mining operations to support the geological interpretations of the sand deposit underlying the Oakdale property. The data are of sufficient quantity and reliability to reasonably support the sand resource and sand reserve estimates presented in this report. • BOYD is of the opinion that our data validation efforts: (1) adequately confirm the reasonableness of the geologic interpretations, resource estimation criteria, and economic assumptions; and (2) support the use of the data in frac sand resource/reserve estimation. • The 228.3 million product tons of frac sand reserves (as of December 31, 2025) identified on the property are reasonably and appropriately supported by technical studies, which consider expected geologic conditions, planned mining and processing operations, forecasted product revenues, and operating and capital cost estimates. As such, BOYD is of the opinion that there are reasonable expectations that the stated frac sand reserves for the Oakdale Mine are technically, economically, and legally extractable as of December 31, 2025. • To our knowledge, there is no other relevant data or information considered material to the Oakdale Mine that would impact or change this TRS. 14.2 Significant Risks and Uncertainties The ability of Smart Sand, or any mining company, to achieve production and financial projections is dependent on numerous factors. These factors primarily include site-specific geological conditions, the capabilities of management and operational personnel, product sales prices and market conditions, environmental issues, securing permit renewals and bonds, and developing and operating mines in a safe and efficient manner. Unforeseen changes in legislation and new industry developments could substantially alter the performance of any mining company. It is our understanding that Smart Sand continuously assesses these factors and adjusts operating plans as a matter of course.
14-2 JOHN T. BOYD COMPANY As a mining operation with an established history of commercial success, there is a high degree of certainty for the Oakdale Mine under the current and foreseeable operating environment. However, it should be noted that frac sand is generally marketed exclusively to the energy sector which has historically faced more volatility than many other industries. Subject specific assessments of risk are presented in the relevant sections of this report. 14.3 Recommendations Based on the current status of the Oakdale Mine, BOYD has no recommendations for additional work relevant to the subject frac sand reserves at this time. q:\eng_wp\3555.026 ss - oakdale fy25\wp\report\ch-14 - conclusions.docx
TECHNICAL REPORT SUMMARY FRAC SAND RESOURCES AND RESERVES OTTAWA MINE LaSalle County, Illinois Prepared For SMART SAND, INC. Yardley, Pennsylvania By John T. Boyd Company Mining and Geological Consultants Pittsburgh, Pennsylvania, USA Report No. 3555.027 FEBRUARY 2026
John T. Boyd Company Mining and Geological Consultants February 23, 2026 File: 3555.027 Smart Sand, Inc. 1000 Floral Vale Blvd., Ste 225 Yardley, PA 19067 Attention: Mr. Christopher Green Vice President of Accounting and Principal Accounting Officer Subject: Technical Report Summary Frac Sand Resources and Reserves Ottawa Mine LaSalle County, Illinois Ladies and Gentlemen: The John T. Boyd Company (BOYD) was retained by Smart Sand, Inc. (Smart Sand) to independently prepare estimates of mineral resources and mineral reserves— hereafter referred to as frac sand resources and frac sand reserves, respectively—for the Ottawa Mine (or “Ottawa”) as of December 31, 2025. This Technical Report Summary (TRS) has been prepared to support Smart Sand’s disclosure of the subject frac sand resources and frac sand reserves in accordance with Subpart 1300 and Item 601(b)(96) of Regulation S-K (collectively, “S-K 1300”) as adopted by the U.S. Securities and Exchange Commission’s (SEC) on October 31, 2018. Respectfully submitted, JOHN T. BOYD COMPANY By: Ronald L. Lewis Managing Director and COO Q:\ENG_WP\3555.027 SS - Utica FY25\Report Work\Draft 1\Cover Letter.docx Chairman James W. Boyd President John T. Boyd II CEO Carlos F. Barrera Managing Director and COO Ronald L. Lewis Vice Presidents Robert J. Farmer Jisheng (Jason) Han John L. Weiss Michael F. Wick William P. Wolf Managing Director - Australia Jacques G. Steenekamp Managing Director - China Rongjie (Jeff) Li Managing Director – South America Carlos F. Barrera Pittsburgh 4000 Town Center Boulevard, Suite 300 Canonsburg, PA 15317 (724) 873-4400 (724) 873-4401 Fax jtboydp@jtboyd.com Denver (303) 293-8988 jtboydd@jtboyd.com Brisbane 61 7 3232-5000 jtboydau@jtboyd.com Beijing 86 10 6500-5854 jtboydcn@jtboyd.com Bogota +57-3115382113 jtboydcol@jtboyd.com www.jtboyd.com
JOHN T. BOYD COMPANY TABLE OF CONTENTS Page LETTER OF TRANSMITTAL TABLE OF CONTENTS GLOSSARY AND ABBREVIATIONS 1.0 EXECUTIVE SUMMARY ............................................................................. 1-1 1.1 Introduction ....................................................................................... 1-1 1.2 Property Description and Location ................................................... 1-2 1.3 Geology ............................................................................................. 1-2 1.4 Exploration ........................................................................................ 1-4 1.5 Frac Sand Reserves .......................................................................... 1-4 1.6 Operations ......................................................................................... 1-6 1.6.1 Mining .................................................................................... 1-6 1.6.2 Processing ............................................................................ 1-6 1.6.3 Infrastructure ......................................................................... 1-7 1.7 Financial Analysis ............................................................................. 1-7 1.7.1 Market Analysis ..................................................................... 1-7 1.7.2 Capital and Operating Costs ................................................. 1-8 1.7.3 Economic Analysis ................................................................. 1-9 1.8 Regulation and Liabilities ................................................................ 1-10 1.9 Conclusions ..................................................................................... 1-10 2.0 INTRODUCTION .......................................................................................... 2-1 2.1 Registrant .......................................................................................... 2-1 2.2 Purpose and Terms of Reference .................................................... 2-1 2.3 Expert Qualifications ......................................................................... 2-2 2.4 Principal Sources of Information ....................................................... 2-3 2.4.1 Personal Inspections ............................................................ 2-4 2.4.2 Reliance on Information Provided by the Registrant ............ 2-4 2.4.3 Verification of Information ..................................................... 2-4 2.4.4 Other Relevant Data and Information ................................... 2-5 2.5 Report Version .................................................................................. 2-5 2.6 Units of Measure ............................................................................... 2-5
TABLE OF CONTENTS - Continued Page JOHN T. BOYD COMPANY 3.0 PROPERTY OVERVIEW ............................................................................. 3-1 3.1 Description and Location .................................................................. 3-1 3.2 History ............................................................................................... 3-1 3.3 Property Control ................................................................................ 3-2 3.4 Adjacent Properties ........................................................................... 3-2 3.5 Regulation and Liabilities .................................................................. 3-2 3.6 Accessibility, Local Resources, and Infrastructure .......................... 3-3 3.7 Physiography .................................................................................... 3-3 3.8 Climate .............................................................................................. 3-4 4.0 GEOLOGY .................................................................................................... 4-1 4.1 Regional Geology ............................................................................. 4-1 4.2 Property Geology .............................................................................. 4-2 4.2.1 General Stratigraphy ............................................................ 4-2 4.2.2 Structural Geology ................................................................ 4-4 4.3 Frac Sand Geology ........................................................................... 4-5 5.0 EXPLORATION DATA ................................................................................. 5-1 5.1 Background ....................................................................................... 5-1 5.2 Exploration Procedures .................................................................... 5-1 5.2.1 Drilling and Sampling ............................................................ 5-1 5.2.2 Frac Sand Testing ................................................................. 5-2 5.2.3 Other Exploration Methods ................................................... 5-3 5.3 Laboratory Testing Results ............................................................... 5-3 5.3.1 Grain Size Distribution ........................................................... 5-3 5.3.2 Grain Shape (Sphericity and Roundness) ............................. 5-3 5.3.3 Acid Solubility ......................................................................... 5-4 5.3.4 Turbidity ................................................................................. 5-4 5.3.5 Crush Resistance .................................................................. 5-4 5.3.6 Quality Summary ................................................................... 5-4 5.4 Data Verification ................................................................................ 5-5
TABLE OF CONTENTS - Continued Page JOHN T. BOYD COMPANY 6.0 FRAC SAND RESOURCES AND RESERVES ....................................... 6-1 6.1 Applicable Standards and Definitions ............................................... 6-1 6.2 Frac Sand Resources ....................................................................... 6-2 6.2.1 Methodology .......................................................................... 6-2 6.2.2 Classification ......................................................................... 6-4 6.2.3 Estimation Criteria ................................................................. 6-4 6.2.4 Frac Sand Resource Estimate .............................................. 6-5 6.2.5 Validation .............................................................................. 6-6 6.3 Frac Sand Reserves ......................................................................... 6-6 6.3.1 Methodology .......................................................................... 6-6 6.3.2 Classification ......................................................................... 6-6 6.3.3 Frac Sand Reserve Estimate ................................................ 6-8 6.3.4 Significant Risks and Uncertainties ...................................... 6-9 6.3.5 Reconciliation with Previous Estimates ................................ 6-9 7.0 MINING OPERATIONS .............................................................................. 7-1 7.1 Mining Method .................................................................................. 7-1 7.2 Mine Schedule, Equipment, and Staffing ......................................... 7-2 7.3 Engineering and Planning ................................................................. 7-2 7.4 Mine Sequence and Production ....................................................... 7-2 7.5 Mining Risks ...................................................................................... 7-3 8.0 PROCESSING OPERATIONS ................................................................... 8-1 8.1 Processing Method ........................................................................... 8-1 8.1.1 Wet Plant .................................................................................. 8-1 8.1.2 Decant/Dry Plant ....................................................................... 8-2 8.1.3 Storage and Loadout ................................................................ 8-2 8.2 Production .......................................................................................... 8-3 8.3 Processing Risks ............................................................................... 8-3 9.0 MINE INFRASTRUCTURE .......................................................................... 9-1 9.1 Overview ........................................................................................... 9-1 9.2 Transportation ................................................................................... 9-1 9.3 Utilities ............................................................................................... 9-1 9.4 Tailings Disposal ............................................................................... 9-2 9.5 Other Structures and Facilities ......................................................... 9-2
TABLE OF CONTENTS - Continued Page JOHN T. BOYD COMPANY 10.0 MARKET ANALYSIS ................................................................................ 10-1 10.1 Market Background .......................................................................... 10-1 10.1.1 Frac Sand ............................................................................. 10-1 10.1.2 Industrial Sand ...................................................................... 10-3 10.2 Historical Sales ................................................................................ 10-4 10.3 Market Outlook ................................................................................. 10-6 10.3.1 Frac Sand ............................................................................. 10-6 10.3.2 Industrial Sand ...................................................................... 10-8 10.4 Market Entry Strategies ................................................................... 10-9 10.5 Future Sales ..................................................................................... 10-9 11.0 CAPITAL AND OPERATING COSTS ...................................................... 11-1 11.1 Basis of Capital and Operating Cost Estimates ............................. 11-1 11.2 Capital Expenditures ....................................................................... 11-1 11.2.1 Historical Capital Expenditures ............................................ 11-1 11.2.2 Projected Capital Expenditures ............................................ 11-2 11.3 Operating Costs .............................................................................. 11-2 11.3.1 Historical Operating Costs .................................................... 11-2 11.3.2 Projected Operating Costs ................................................... 11-3 12.0 ECONOMIC ANALYSIS ........................................................................... 12-1 12.1 Approach ......................................................................................... 12-1 12.2 Assumptions and Limitations .......................................................... 12-2 12.3 Financial Model Results .................................................................. 12-3 12.4 Sensitivity Analysis ......................................................................... 12-5 13.0 PERMITTING AND COMPLIANCE ......................................................... 13-1 13.1 Permitting Requirements and Status .............................................. 13-1 13.2 Environmental Studies .................................................................... 13-2 13.3 Waste Disposal and Water Management ....................................... 13-2 13.4 Compliance ..................................................................................... 13-2 13.5 Plans, Negotiations, or Agreements ............................................... 13-2 13.6 Post-Mining Land Use and Reclamation ........................................ 13-3 13.7 Local Procurement and Hiring ........................................................ 13-3 14.0 INTERPRETATION AND CONCLUSIONS ............................................. 14-1 14.1 Findings ........................................................................................... 14-1 14.2 Significant Risks and Uncertainties ................................................ 14-1 14.3 Recommendations .......................................................................... 14-2
TABLE OF CONTENTS - Continued Page JOHN T. BOYD COMPANY List of Tables 1.1 Ottawa Mine Frac Sand Reserves as of December 31, 2025 ...................... 1-5 1.2 Ottawa API/ISO Test Results by Product Size (2011 Composite Samples) 1-5 1.3 Ottawa API/ISO Test Results by Product Size (2018 Composite Samples) 1-6 5.1 Weighted Average Particle Size Distribution (% By Mesh Size) .................. 5-3 5.2 Ottawa API/ISO Test Results by Product Size (2011 Composite Samples) 5-4 5.3 Ottawa API/ISO Test Results by Product Size (2018 Composite Samples) 5-5 6.1 Ottawa Property Drill Hole Spacing Parameters .......................................... 6-4 6.2 Ottawa Mine Frac Sand Reserves as of December 31, 2025 ...................... 6-8 10.1 Historical Sales Data .................................................................................. 10-4 10.2 Frac Sand and Industrial Sand Sales Forecast ......................................... 10-9 11.1 Historical Capital Expenditures ................................................................... 11-1 11.2 Forecasted Capital Expenditures ................................................................ 11-2 11.3 Historical Operating Costs ........................................................................... 11-3 11.4 Forecasted Operating Costs ........................................................................ 11-4 12.1 Financial Results ......................................................................................... 12-3 12.2 Annual Production and Cash Flow Forecast ............................................... 12-4 12.3 DCF-NPV Analysis ....................................................................................... 12-5 12.4 After-Tax NPV12 Sensitivity Analysis ($ millions) ........................................ 12-5 13.1 Ottawa Mine Permit Summary .................................................................... 13-1
TABLE OF CONTENTS - Continued Page JOHN T. BOYD COMPANY List of Figures 1.1 General Location Map ................................................................................... 1-3 4.1 Generalized Stratigraphic Chart, LaSalle County, Illinois ............................. 4-3 4.2 Cross Section A-A’ ......................................................................................... 4-7 6.1 Relationship Between Frac Sand Resources and Frac Sand Reserves ..... 6-2 6.2 Proven and Probable Reserves ..................................................................... 6-7 6.3 Reconciliation with Previous Frac Sand Reserve Estimate ........................ 6-10 7.1 Ottawa Quarry Pit Looking North .................................................................. 7-1 8.1 Ottawa Wet Processing Plant ........................................................................ 8-2 8.2 Decant Shed and Dry Processing Plant ........................................................ 8-3 10.1 Frac Sand Sales by Mesh Size ................................................................... 10-5 10.2 Frac Sand Sales by Basin/Play ................................................................... 10-5 10.3 Industrial Sand Sales by Industry ................................................................ 10-6 Q:\ENG_WP\3555.027 SS - Utica FY25\WP\Report\TOC.doc
1 JOHN T. BOYD COMPANY GLOSSARY OF ABBREVIATIONS AND DEFINITIONS 000 : Thousand(s) $ : US dollar(s) AMSL : Above mean sea-level API : American Petroleum Institute API/ISO : API RP 19C/ISO 13503-2, Measurement of Properties of Proppants Used in Hydraulic Fracturing and Gravel-packing Operations BNSF : Burlington Northern Santa Fe BOYD : John T. Boyd Company Constant Dollar : A monetary measure that is not influenced by inflation and used to compare time periods. Sometimes referred to as “real dollars”. DCF : Discounted Cash Flow DDA : Depreciation, depletion, and amortization expenses Discount Rate : A rate of return used to discount future cash flows based on the return investors expect to receive from their investment. EBIT : Earnings before interest and taxes EBIAT : Earnings before interest after taxes EBITDA : Earnings before interest, taxes, depreciation, and amortization E&P : Exploration and production EUR : Estimated ultimate recovery – the forecast cumulative quantity of hydrocarbons that can be economically produced from a well, reservoir, or field over its productive lifetime. Frac Sand : Frac sand is a naturally occurring, high silica content quartz sand, with grains that are generally well rounded and exhibit high compressive strength characteristics relative to other silica sand. It is utilized as a prop or “proppant” in unconventional shale frac well completions. Frac Sand Resource : A Frac Sand Resource is a concentration or occurrence of sand material of economic interest in or on the Earth’s crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A Frac Sand Resource is a reasonable estimate of mineralization, taking into account relevant factors such as quality specifications, likely mining dimensions, location or continuity, that, with the assumed and justifiable
2 GLOSSARY OF ABBREVIATIONS AND DEFINITIONS - Continued JOHN T. BOYD COMPANY technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled. Frac Sand Reserve : A Frac Sand Reserve is an estimate of tonnage and grade or quality of Frac Sand Resource that, in the opinion of the qualified person, can be the basis of an economically viable project. More specifically, it is the economically mineable part of a Frac Sand Resource, which includes diluting materials and allowances for losses that may occur when the material is mined or extracted. ft : Feet – a unit of linear measurement equal to 12 inches or 0.3048 meters. IDNR : Illinois Department of Natural Resources IEPA : Illinois Environmental Protection Agency Indicated Frac Sand Resource : An Indicated Frac Sand Resource is that part of a Frac Sand Resource for which quantity, grade or quality, densities, shape, and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing, and is sufficient to assume geological and grade or quality continuity between points of observation. An Indicated Frac Sand Resource has a lower level of confidence than that applying to a Measured Frac Sand Resource and may only be converted to a Probable Frac Sand Reserve. Inferred Frac Sand Resource : That part of a Frac Sand Resource for which quantity and quality are estimated based on limited geological evidence and sampling. The level of geological uncertainty associated with an Inferred Frac Sand Resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. Because an Inferred Frac Sand Resource has the lowest level of geological confidence of all Frac Sand Resources, which prevents the application of the modifying factors in a manner useful for evaluation of economic viability, an Inferred Frac Sand Resource may not be considered when assessing the economic viability of a mining project, and may not be converted to a Frac Sand Reserve. IRR : Internal rate-of-return ISO : International Organization for Standardization lb : Pound
3 GLOSSARY OF ABBREVIATIONS AND DEFINITIONS - Continued JOHN T. BOYD COMPANY LOM : Life-of-Mine Measured Frac Sand Resource : A Measured Frac Sand Resource is that part of a Frac Sand Resource for which quantity, grade or quality, densities, shape, and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine planning and final evaluation of the economic viability of the deposit. Geological evidence is derived from detailed and reliable exploration, sampling, and testing and is sufficient to confirm geological and grade or quality continuity between points of observation. A Measured Frac Sand Resource has a higher level of confidence than that applying to either an Indicated Frac Sand Resource or an Inferred Frac Sand Resource. It may be converted to a Proven Frac Sand Reserve or to a Probable Frac Sand Reserve. Mesh : A measurement of particle size often used in determining the size distribution of granular material. In the U.S., standard mesh (or sieve) size is defined as the number of openings in one square inch of a screen. For example, a 36-mesh screen will have 36 openings while a 150-mesh screen will have 150 openings. Since the size of the screen (one square inch) is constant, the higher the mesh number the smaller the screen opening and the smaller the particle that will pass through. The following table provides mesh dimensions which are commonly referenced in frac sand specifications: Mine-gate : The location at which finished product leaves the mine or processing facility, with all mining and processing complete, but prior to transportation or delivery beyond the mine site. With regards to pricing, “mine-gate price” refers to the sales price of finished product at the point of shipment from the mine or processing facility, excluding transportation, storage, handling, and other downstream logistics costs incurred beyond the mine site. Mesh inches mm microns 20 0.0331 0.850 850 30 0.0232 0.600 600 35 0.0197 0.500 500 40 0.0165 0.425 425 50 0.0117 0.300 300 70 0.0083 0.212 212 100 0.0059 0.180 180 140 0.0041 0.105 105 200 0.0029 0.075 75 Opening Size
4 GLOSSARY OF ABBREVIATIONS AND DEFINITIONS - Continued JOHN T. BOYD COMPANY Mineral Reserve : See “Frac Sand Reserve” Mineral Resource : See “Frac Sand Resource” Modifying Factors : The factors that a qualified person must apply to Indicated and Measured Frac Sand Resources and then evaluate to establish the economic viability of Frac Sand Reserves. A qualified person must apply and evaluate modifying factors to convert Measured and Indicated Frac Sand Resources to Proven and Probable Frac Sand Reserves. These factors include, but are not restricted to: mining; processing; metallurgical; infrastructure; economic; marketing; legal; environmental compliance; plans, negotiations, or agreements with local individuals or groups; and governmental factors. The number, type and specific characteristics of the modifying factors applied will necessarily be a function of and depend upon the mineral, mine, property, or project. MSHA : Mine Safety and Health Administration. A division of the U.S. Department of Labor. NTU : Nephelometric turbidity units NPV : Net Present Value NWS : Northern White Sands Probable Frac Sand Reserve : A Probable Frac Sand Reserve is the economically mineable part of an Indicated and, in some circumstances, a Measured Frac Sand Resource. The confidence in the Modifying Factors applying to a Probable Frac Sand Reserve is lower than that applying to a Proven Frac Sand Reserve. Proppant Sand : See “Frac Sand” Proven Frac Sand Reserve : A Proven Frac Sand Reserve is the economically mineable part of a Measured Frac Sand Resource. A Proven Frac Sand Reserve implies a high degree of confidence in the Modifying Factors. psi : Pounds per square inch QP : Qualified Person ROM : Run-of-Mine. The as-mined including in-seam clay partings mined with the sand, and out-of-seam dilution. SEC : U.S. Securities and Exchange Commission SG&A : Selling, general, and administrative S-K 1300 : Subpart 1300 and Item 601(b)(96) of the U.S. Securities and
5 GLOSSARY OF ABBREVIATIONS AND DEFINITIONS - Continued JOHN T. BOYD COMPANY Exchange Commission’s Regulation S-K Smart Sand : Smart Sand, Inc. Surficial : Relating to the earths surface or the geology that is on the surface. Ton : Short Ton. A unit of weight equal to 2,000 pounds tph : Tons per Hour TRS : Technical Report Summary WIP : Work-in-process Q:\ENG_WP\3555.027 SS - Utica FY25\WP\Report\Glossary.docx
1-1 JOHN T. BOYD COMPANY 1.0 EXECUTIVE SUMMARY 1.1 Introduction Smart Sand’s Ottawa Mine is an active surface sand mining and processing operation that has been producing finished proppant sand and industrial sand (collectively referred to as “frac sand,” unless otherwise specified) products from the Saint Peter Sandstone Formation since commencing operations in 2014. BOYD was retained by Smart Sand to complete an update to our initial independent technical estimate (BOYD Report No. 3555.022A) of frac sand resource and frac sand reserve estimates for the Ottawa Mine. The purpose of this TRS is threefold: (1) to summarize technical and scientific information for the subject property, (2) to provide the conclusions of our review of the information for the property, and (3) to provide statements of frac sand resources and frac sand reserves for the Ottawa Mine in accordance with the disclosure requirements set forth in Subpart 1300, Item 601(b)(96) of the U.S. Security Exchange’s (SEC) Regulation S-K (S-K 1300). BOYD’s findings are based on our detailed examination of the supporting geologic, technical, and economic information obtained from: (1) data, reports, and other information provided by Smart Sand, (2) existing BOYD work files and reports, (3) discussions with Smart Sand personnel, (4) records on file with regulatory agencies, (5) data, reports, and other information from public sources, and (6) nonconfidential information in BOYD’s possession. Our investigation was performed to obtain reasonable assurance that Smart Sand’s frac sand resource and frac sand reserve statements are free from material misstatement. This report provides results of an update to an initial independent estimate of the frac sand resources and frac sand reserves underlying the Ottawa property. The basis for these estimates is a volumetric geologic model estimating the frac sand resources and frac sand reserves originally completed by BOYD in July 2020. Updated site-specific and operational information was provided by Smart Sand to bring this estimate current as of the effective date of this report. Unless otherwise noted, the effective date of the information provided herein, including estimates of frac sand resources and frac sand reserves, is December 31, 2025.
1-2 JOHN T. BOYD COMPANY 1.2 Property Description and Location Smart Sand’s Ottawa Mine is located in LaSalle County, Illinois. The mine exploits the Saint Peter Sandstone Formation which is extensively mined for frac sand in the area. Smart Sand controls approximately 819 contiguous acres of property which is reportedly owned fee simple. The general location of the subject property is provided in Figure 1.1, following this page. 1.3 Geology Northern white sands (NWS) are generally located in the north-central portion of the United States (Minnesota, Wisconsin, and Illinois, with lesser amounts in Arkansas and Iowa). NWS is found in poorly cemented Cambrian and Ordovician sandstones and in unconsolidated alluvial deposits locally derived from these sandstones. The Saint Peter, Jordan, Wonewoc, and Mount Simon formations are the primary sources of NWS. The Ottawa Property’s target silica bearing formation is the Ordovician Age Saint Peter Sandstone, which is a massive formation in areal extent and thickness. On a regional basis, the Saint Peter ranges in thickness from a few feet to over 700 ft, with a general thickness of 100 ft to 200 ft. In northern Illinois, the thickness of the Saint Peter can reach over 300 ft. The surface of the Ottawa property is overlain by clays, sandy gravels, peat, and a limestone caprock overburden interval, ranging in thickness from 57 ft to 77 ft, with an average thickness of approximately 66 ft. The Saint Peter Sandstone deposit on the Ottawa property is flat lying with no evidence of faulting, and has been eroded to an average thickness of approximately 100 ft. The formation is a white to buff in color, with fine to medium grained ortho-quartzite. It contains rounded, clear polished quartz sand grains with minor secondary silica and clay cement. Care must be taken in defining the presence of erosion channels, which can replace the critical upper portion of the Saint Peter Sandstone locally. Grain size distribution drives mine planning as the deposit is coarser in its upper half. Iron tends to be concentrated near the surface and is visible in orange staining. Iron also increases nearing the bottom sandstone contact, occurring mostly as pyrite. In areas of the deposit where the upper part of the formation is eroded, multiple mining faces must operate to ensure an adequate composition of run-of-mine (ROM) material is fed to the processing plants in order to meet product size specifications.
1-4 JOHN T. BOYD COMPANY 1.4 Exploration Based on information provided, there were several exploration drilling campaigns performed on the Ottawa property. The most recent campaign was completed in 2024. Overall, there have been 30 drill holes completed on the property. However, BOYD utilized the results of only 15 exploration holes to develop the geologic model of the Ottawa deposit, as many previous drilling records lacked particle size analyses and/or accurate lithology thickness data. The lithologic data obtained from the 15 drill holes utilized, along with results of the particle size distribution analyses (tested on 10 ft increments) were the principal sources of information used to define the extent of the overburden and sandstone intervals on the subject property. These data were compiled into a database for input into the geologic model. BOYD opines, although the available data was limited in scope and detail, that the overall data provided look to be sufficient for the purposes of evaluating and estimating frac sand resources and reserves on the Ottawa property. 1.5 Frac Sand Reserves This report provides an estimate of frac sand reserves for Smart Sand’s Ottawa Mine in accordance with the requirements set forth in S-K 1300. The estimate was independently completed by BOYD. This report, and previous reports, include a thorough geologic investigation of the property, appropriate modeling of the deposit, development of life-of-mine (LOM) plans, and consideration of the relevant processing, economic (including independent estimates of capital, revenue, and cost), marketing, legal, environmental, socio-economic, and regulatory factors. Smart Sand’s estimated surface mineable frac sand reserves for the Ottawa Mine total 125.3 million saleable product tons, as of December 31, 2025.
1-5 JOHN T. BOYD COMPANY Table 1.1, below, presents the estimated frac sand Reserve tons by product (size), that are anticipated to be produced at Smart Sand’s Ottawa Mine. The reported reserves include only frac sand which is reportedly owned as of December 31, 2025. It is BOYD’s opinion that extraction of the reported frac sand reserves is technically achievable and economically viable after the consideration of potentially material modifying factors. Projecting finished frac sand product sales of approximately 840,000 tons per year in 2026, ramping up to a projected 1.0 million tons per year by 2030 and then remaining constant, the operation has an expected LOM of approximately 124 years. Composite samples collected during the 2011 and 2018 exploration campaigns were tested by Stim-Lab, Duncan, Oklahoma (Stim-Lab) for API RP 19C/ISO 13503-2 (API/ISO) frac sand characteristic testing. Testing was performed on the 20/40, 30/50, 40/70, and 70/140-mesh (100-mesh) product sizes. Results from the 2011 samples, provided to Stim-Lab in August 2011, are presented in Table 1.2, below. Mesh Size Proven Probable Total 20/40 27,960 8,660 36,620 40/70 53,856 18,159 72,015 70/140 12,362 4,340 16,702 Total 94,178 31,159 125,337 Table 1.1: Ottawa Mine Frac Sand Reserves as of December 31, 2025 Product Tons (000) by Classification Table 1.2: Ottawa API/ISO Test Results by Product Size (2011 Composite Samples) API RP 19C API RP 19C Result Recommended Result Result Recommended Test 20/40-mesh Specification 40/70-mesh 70/140-mesh* Specification Sphericity 0.7 ≥ 0.6 0.6 0.6 ≥ 0.6 Roundness 0.7 ≥ 0.6 0.6 0.6 ≥ 0.6 Acid Solubility (%) 0.6 ≤ 2.0 0.9 1.2 ≤ 3.0 Turbidity (NTU) 44 ≤ 250 35 35 ≤ 250 K-Value (000 psi) 6 - 7 9 - *Currently, 70/140-mesh frac sand does not have an API/ISO specification.
1-6 JOHN T. BOYD COMPANY Results from the 2018 samples, provided to Stim-Lab in August 2018, are presented in Table 1.3, below. Testing suggests that the Ottawa Mine produces frac sand products which meet minimum API/ISO recommended testing characteristics. BOYD notes that the Ottawa Operation has a prior history of selling various frac sand sized products to its E&P and drilling services customers since 2014. 1.6 Operations 1.6.1 Mining The Ottawa Mine produces approximately 800,000 to 1 million tons of finished sand products per year. The quarry exploits the Saint Peter sandstone formation which is extensively mined in the Ottawa-Utica, Illinois area. To produce 800,000 tons of frac sand product, approximately 1 million tons of ROM sand is uncovered, drilled, blasted, and then hauled to the slurry plant. Conventional excavators, front-end loaders, articulated haul trucks and dozers are used to strip the overburden and recover the sand. Currently the mine pit operates two, 10-hour shifts, four days per week resulting in a 40-hour work week per shift. A 10-hour Friday shift is added if needed. Generally, there are seven employees on the day shift and five employees on the night shift. The sand is mined, processed, and stored on one contiguous property. Finished product is generally trucked to the nearby Peru, Illinois rail loadout for transport on the Burlington Northern Santa Fe (BNSF) rail line. Production from the operation commenced in 2014. 1.6.2 Processing The Ottawa Mine commenced operations in 2014. Initially, the work-in-process (WIP) sand was railed to a dry process plant in Corpus Christi, Texas. In 2018, a 1.6 million tons per year dry process plant was constructed on-site and has since been utilized to Table 1.3: Ottawa API/ISO Test Results by Product Size (2018 Composite Samples) API RP 19C API RP 19C Result Result Recommended Result Result Recommended Test 20/40-mesh 30/50-mesh Specification 40/70-mesh 70/140-mesh* Specification Sphericity 0.8 0.8 ≥ 0.6 0.7 0.7 ≥ 0.6 Roundness 0.7 0.7 ≥ 0.6 0.6 0.6 ≥ 0.6 Acid Solubility (%) 0.3 0.3 ≤ 2.0 0.3 - ≤ 3.0 Turbidity (NTU) 9 12 ≤ 250 7 - ≤ 250 K-Value (000 psi) 6 7 - 8 - - *Currently, 70/140-mesh frac sand does not have an API/ISO specification.
1-7 JOHN T. BOYD COMPANY finish frac sand product. The ROM sand material is hauled to an in-pit feed hopper where it is slurried and pumped to an enclosed wet process plant. Following removal of oversize and waste (< 140-mesh) material, the sand is pumped to a decant facility adjacent to the drying and screening plant. After decanting, the sand is reclaimed, dried, and screened into the various frac sand size products, before being placed into truck dump silos. Finished sand is then either trucked to local industrial customers or to the nearby BN rail loadout facility. The wet plant employs typical screen-hydrosizer-cyclone classification and dewatering methods and also has an ultrafine circuit and thickener. The wet plant operates two, 10- hour shifts, four days per week. A drag chain arrangement reclaims dryer sand from the top of the decant/dry shed pile and conveys the sand to a 250 tons per hour (tph) natural gas fired dryer. Dry sand is then screened into predominantly 20/40, 30/50,40/70, and 70/140 (“100 Mesh”) mesh size finished frac sand products. The finished products are stored in four 2,000-ton truck loadout silos. 1.6.3 Infrastructure The Ottawa Mine is serviced by three phase power and a natural gas pipeline routed along U.S. highway 6, north of the property. Plant process water is supplied by water collected in the pit and ponds, and wash process water is recycled after fines are removed via settling with a flocculent in a thickener and series of constructed ponds. On-site facilities include a scale house, office, shop, and a quality laboratory located in the dry process plant. 1.7 Financial Analysis 1.7.1 Market Analysis The North American frac sand market has structurally shifted from long-haul NWS to lower-cost in-basin sands, driven primarily by logistics efficiency and cost optimization following the 2014–2016 oil price downturn. Today, in-basin sand dominates bulk volumes—particularly in the Permian Basin—while NWS retains a defensible niche in high-stress or performance-sensitive wells where superior conductivity and crush strength materially improve production outcomes. Smart Sand’s operations are well positioned within this evolving market structure. Historical sales increased from approximately 3.2 million tons in 2021 to 5.4 million tons in 2025, although average selling prices declined to $26.28 per ton in 2025 due to broader market pricing pressures. Approximately 94% of sales volume consisted of frac
1-8 JOHN T. BOYD COMPANY sand, with industrial sand representing a smaller but strategically important segment. Frac sand sales were concentrated in the Marcellus and Bakken basins, which together accounted for nearly 68% of total frac sand shipments in 2025. Contract sales accounted for approximately 69% of frac sand volume, providing revenue stability, while industrial sand sales were largely conducted on a spot basis. Industrial sand markets provide diversification benefits and exhibit more stable demand fundamentals compared to frac sand. Key end-use sectors include foundry, glass manufacturing, and building products, which together accounted for approximately 80% of industrial sand sales. Demand in these sectors is driven by long-term economic factors such as construction activity, manufacturing output, infrastructure investment, and population growth, resulting in relatively stable and predictable consumption patterns. Looking forward, demand for NWS frac sand is expected to remain stable, supported by continued drilling in high-stress reservoirs and increasing completion intensity. However, in-basin sand will continue to dominate bulk volumes due to cost advantages. Supply of high-quality NWS is constrained by geological and permitting limitations, supporting its premium market position. Industrial sand demand is expected to grow modestly over the long term, supported by diversified end markets and favorable macroeconomic trends. Sales projections for the Ottawa Mine indicate stable long-term production, with total forecasted sales of approximately 125 million tons through the life of the mine at a projected weighted-average selling price of approximately $24.71 per ton. Overall, the operation is expected to benefit from established customer relationships, diversified end markets, and the continued need for high-quality silica sand in both energy and industrial applications. 1.7.2 Capital and Operating Costs The Ottawa Mine is a mature frac sand operation with well-established production, capital, and operating cost structures supported by historical performance and internal forecasts. Based on BOYD’s evaluation and experience with similar mining operations, the capital and operating cost estimates are considered reasonable and reliable, with an expected accuracy range of approximately ±20%. The operation is currently in steady-state production and does not require significant development or expansion capital to maintain planned output levels. Capital expenditures are primarily limited to sustaining capital required to maintain equipment, infrastructure, and operational efficiency. Historical capital spending was approximately
1-9 JOHN T. BOYD COMPANY $0.21 per ton sold in 2024 and $7.03 per ton sold in 2025, highlighting the discretionary nature of capital spending. Projected sustaining capital expenditures are forecast at approximately $1.37 per ton sold in 2026, declining to approximately $1.13 per ton sold in 2030 and thereafter. These modest capital requirements reflect the mine’s mature infrastructure and lack of dependence on major future capital investment. Operating costs are stable and predictable, reflecting consistent mining, processing, logistics, and site-level administrative expenses. Historical cash production costs were approximately $21.51 per ton sold in 2025, and projected life-of-mine operating costs are expected to remain consistent at an average of approximately $20.94 per ton sold. These projections are based on expected labor, consumables, power, maintenance, and equipment costs, and exclude corporate overhead and royalties. Overall, the Ottawa Mine’s low sustaining capital requirements, stable operating cost structure, and mature operational profile support continued reliable production and long-term economic viability. 1.7.3 Economic Analysis The economic analysis prepared by John T. Boyd Company evaluates the economic viability of the Ottawa Mine’s frac sand reserves using a discounted cash flow (DCF) methodology based on projected production, revenues, operating costs, and capital expenditures over the remaining life of the mine. Cash flows were modeled on an after- tax basis using constant 2025 dollar terms and discounted at a 12% rate (NPV12), consistent with standard mining industry practice for reserve economic evaluations. Based on available operating data, budget forecasts, and cost assumptions, Boyd concluded that the production forecasts and financial projections are reasonable and sufficient to assess the economic viability of the frac sand reserves. The Ottawa Mine is projected to produce approximately 161.4 million tons of ROM material, yielding approximately 125.3 million tons of finished frac sand over an estimated remaining mine life of 124 years. Total projected revenues are approximately $3.1 billion, based on a weighted average mine gate sales price of $24.71 per ton, with average cash production costs of $20.94 per ton and total life-of-mine capital expenditures of approximately $141.7 million. These projections result in estimated pre-tax and after-tax life-of-mine cash flows of approximately $144.3 million and a base case NPV12 of $9.6 million, confirming that the frac sand reserves generate positive economic returns under the assumed operating and pricing conditions. The analysis reflects no income tax liability over the evaluation period, as projected net income
1-10 JOHN T. BOYD COMPANY remains negative due to depreciation and amortization expenses exceeding operating income. Sensitivity analysis demonstrates that the project’s economic performance is highly sensitive to changes in product pricing and operating costs, with pricing representing the most significant value driver. At the base case operating cost assumption, a 20% decrease in revenue results in a materially negative NPV, while a 20% increase in revenue significantly increases project value. Conversely, relatively modest changes in operating costs also materially impact project economics, although capital expenditure variations have minimal effect on NPV. Across a range of discount rates from 8% to 15%, NPV remains positive, further supporting the economic viability of the reserves under reasonable market and operating conditions. The Ottawa Mine benefits from operational flexibility supported by existing infrastructure capacity and demonstrated operating history. Smart Sand has the ability to adjust production levels, manage operating costs, and prioritize higher-margin product specifications in response to changes in market demand and pricing conditions. These operational capabilities, combined with the positive projected cash flows and sensitivity- tested financial resilience, support the conclusion that the Ottawa Mine’s frac sand reserves are economically viable over the projected life of the operation. 1.8 Regulation and Liabilities The Ottawa Mine’s operations are predominantly regulated by LaSalle County, Illinois and the State of Illinois concerning reclamation of the site. Air emissions are regulated by the Illinois Environmental Protection Agency. Based on our review of information provided by Smart Sand and available public information, it is BOYD’s opinion that the Ottawa Mine’s record of compliance with applicable mining, water quality, and environmental regulations is generally typical for that of the industry. BOYD is not aware of any regulatory violation or compliance issue which would materially impact the frac sand reserve estimate. 1.9 Conclusions It is BOYD’s overall conclusion that Smart Sand’s Ottawa Mine frac sand reserves, as reported herein: (1) were prepared in conformance with accepted industry standards and practices, and (2) are reasonably and appropriately supported by technical evaluations, which consider all relevant modifying factors. We do not believe there is other relevant
1-11 JOHN T. BOYD COMPANY data or information material to the Ottawa Property that would render this technical report summary misleading. Our conclusions represent only informed professional judgment. The ability of Smart Sand, or any mine operator, to recover all of the reported frac sand reserves is dependent on numerous factors that are beyond the control of, and cannot be anticipated by, BOYD. These factors include mining and geologic conditions, the capabilities of management and employees, the securing of required approvals and permits in a timely manner, future sand prices, etc. Unforeseen changes in regulations could also impact performance. Opinions presented in this report apply to the site conditions and features as they existed at the time of BOYD’s investigations and those reasonably foreseeable. Q:\ENG_WP\3555.022 SS - YE 2022 S-K 1300\3555.022A - Utica\CH-1 - Executive Summary.docx
2-1 JOHN T. BOYD COMPANY 2.0 INTRODUCTION 2.1 Registrant Smart Sand is a fully integrated frac and industrial sand supply and services company focused on the mining, processing, and distribution of Northern White frac and industrial sands, an essential material in hydraulic fracturing for oil and gas that boosts hydrocarbon recovery. The company delivers end-to-end logistics solutions, transporting sand efficiently from the mine to the wellsite, with innovative storage and delivery systems such as SmartDepot™ silos and SmartPath® transloaders. In addition to serving the oil and gas sector, Smart Sand also provides sand products for industrial manufacturers and a variety of other industrial applications. Smart Sand, incorporated in Delaware in July 2011 and headquartered in Yardley, Pennsylvania, is a publicly traded company listed on NASDAQ under the ticker SND. Additional information regarding Smart Sand can be found on their website at www.smartsand.com. 2.2 Purpose and Terms of Reference Smart Sand retained BOYD to independently prepare and present estimates of frac sand resources and frac sand reserves for the Ottawa Mine in accordance with the disclosure requirements set forth in S-K 1300. As such, the purpose of this TRS is threefold: (1) to summarize technical and scientific information for the subject mining property, (2) to provide the conclusions of our review of the information for the property, and (3) to provide statements of frac sand resources and frac sand reserves for the Ottawa Mine. BOYD’s opinions and conclusions are based on our detailed review of the supporting geologic, technical, and economic information provided by Smart Sand, which was used in formulating the estimates of frac sand resources and frac sand reserves disclosed in this report. We independently estimated the frac sand resources and frac sand reserves from first principles using exploration information provided by Smart Sand or by third-party experts engaged by Smart Sand. We employed standard engineering and geoscience methods, or a combination of methods, that we considered to be appropriate and necessary to establish the conclusions set forth herein. As in all aspects of mining property evaluation, there are uncertainties inherent in the interpretation of engineering and geoscience data; therefore, our conclusions necessarily represent only informed professional judgment.
2-2 JOHN T. BOYD COMPANY The ability of Smart Sand, or any mine operator, to recover all the estimated frac sand reserves presented in this report is dependent on numerous factors that are beyond the control of, and cannot be anticipated by, BOYD. These factors include mining and geologic conditions, the capabilities of management and employees, the securing of required approvals and permits in a timely manner, future sand prices, etc. Unforeseen changes in regulations could also impact performance. Opinions presented in this report apply to the site conditions and features as they existed at the time of BOYD’s investigations and those reasonably foreseeable. This report is intended for use by Smart Sand, subject to the terms and conditions of its professional services agreement with BOYD. We also consent to Smart Sand filing this TRS with the SEC pursuant to S-K 1300. Except for the purposes legislated under U.S. securities law, any other uses of or reliance on this report by any third party is at that party’s sole risk. 2.3 Expert Qualifications BOYD is an independent consulting firm specializing in mining-related engineering and financial consulting services. Since 1943, BOYD has completed over 4,000 projects in the United States and more than 90 other countries. Our full-time staff comprises experts in: civil, environmental, geotechnical, and mining engineering; geology; mineral economics; and market analysis. Our extensive experience in frac sand resource and reserve estimation and our knowledge of the subject properties, provides BOYD with an informed basis to opine on the frac sand resources and frac sand reserves available at the Ottawa Sand Mine. An overview of BOYD can be found on our website at www.jtboyd.com. The individuals primarily responsible for the preparation of this report and the estimates of frac sand reserves presented herein are by virtue of their education, experience, and professional association considered qualified persons (QPs) as defined in S-K 1300. Neither BOYD nor its staff employed in the preparation of this report have any beneficial interest in Smart Sand, and are not insiders, associates, or affiliates of Smart Sand. The results of our assignment were not dependent upon any prior agreements concerning the conclusions to be reached, nor were there any undisclosed understandings concerning any future business dealings between Smart Sand and BOYD. This report was prepared in return for fees based on agreed-upon commercial rates, and the payment for our services was not contingent upon our opinions regarding the project or approval of our work by Smart Sand and its representatives.
2-3 JOHN T. BOYD COMPANY 2.4 Principal Sources of Information The information, estimates, opinions, and conclusions presented herein are informed by: (1) data, reports, and other information provided by Smart Sand, (2) discussions with Smart Sand personnel, (3) records on file with regulatory agencies, (4) data, reports, and other information from public sources, and (5) nonconfidential information in BOYD’s possession. The following information was provided by Smart Sand: • Exploration records (e.g., drill hole location maps, drilling logs, and lab testing summaries) • Mapping data, including: - Property control boundaries - Infrastructure locations - Easement and right-of-way boundaries - Topographic site surveys - Recent mining extents • Overview of processing operations and detailed flow diagrams • Preliminary business plans • Historical information, including: - Production reports and reconciliation statements - Financial statements - Product sales and pricing - Mine plans - Site plans - Operational data • Files related to mining and operating permits Work files prepared for, and information contained in, the following BOYD reports were utilized to prepare the estimates of frac sand resources and frac sand reserves disclosed herein: John T. Boyd Company. Technical Report Summary: Frac Sand Resources and Reserves, Utica Mine, LaSalle County, Illinois, Report No. 3555.022 (January 2022). John T. Boyd Company. Technical Report Summary: Frac Sand Resources and Reserves, Utica Mine, LaSalle County, Illinois, Report No. 3555.022A (February 2024).
2-4 JOHN T. BOYD COMPANY Any other information from sources external to BOYD and/or Smart Sand is referenced accordingly. The data and work papers used in the preparation of this report are on file in our offices. 2.4.1 Personal Inspections The most recent personal inspections of the Ottawa operation were made by two of BOYD’s senior geology and mining staff—both qualified persons—on October 27, 2021. The site visit included: (1) observation of the active mining operations, (2) a tour of the mine site’s surface infrastructure, and (3) a detailed discussion of the mine plan. BOYD’s representatives were accompanied by Smart Sand management, who openly and cooperatively answered questions regarding, but not limited to: site geology, mining conditions and operations, equipment usage, labor relations, operating and capital costs, current and proposed processing operations, and frac sand marketing. 2.4.2 Reliance on Information Provided by the Registrant In the preparation of this report, BOYD has relied, exclusively and without independent verification, upon information furnished by Smart Sand with respect to: • Property title and status • Encumbrances, easements, and rights-of-way • Permits, bonds, and reclamation liability • Sustainability initiatives • Surface tailings management • Mine closure requirements and plans • Monitoring/compliance requirements for protected areas/species • Community relations • Market overview and strategy • Product specifications • Marketing and sales contracts • Income tax rates • Inflation and discount rates Our opinions and conclusions regarding this information are provided in the relevant sections of this report. 2.4.3 Verification of Information BOYD exercised due care in reviewing the information provided by Smart Sand within the scope of our expertise and experience (which is in technical and financial mining issues) and concluded the data are reasonable and reliable considering the status of the subject properties and the purpose for which this report was prepared.
2-5 JOHN T. BOYD COMPANY We have no reason to believe that any material facts have been withheld or misstated, or that further analysis may reveal additional material information. However, the accuracy of the results and conclusions of this report are reliant on the accuracy of the information provided by Smart Sand. While we are not responsible for any material omissions in the information provided for use in this report, we accept responsibility for the disclosure of information contained herein which is within the scope of our expertise. 2.4.4 Other Relevant Data and Information BOYD is not aware of any additional information that would materially affect the frac sand resource and frac sand reserve estimates reported herein. 2.5 Report Version The effective (i.e., “as of”) date of this TRS is December 31, 2025. The estimates of frac sand resources and frac sand reserves and supporting information presented in this report are effective as of December 31, 2025. This is the third TRS for the Ottawa Mine filed by Smart Sand. This report supersedes the previously filed TRSs and any predated estimates of frac sand resources or frac reserves for the Ottawa Mine. Users of this document should ensure that this is the most recent disclosure of frac sand resources and frac sand reserves for the Ottawa Mine, as it is no longer valid if more recent estimates are available. 2.6 Units of Measure The U.S. customary measurement system has been used throughout this report. Tons are short tons of 2,000 pounds-mass. Volumes and tonnages have been rounded to reflect estimate precision; minor differences generated by rounding are not considered material to the disclosed estimates. Unless otherwise stated, currency is expressed in U.S. Dollars ($). Historic prices and costs are presented in nominal (i.e., unadjusted) dollars. Future dollar values are expressed on a constant (i.e., unescalated) basis as of the effective date of this report. \\jtb-7\boyd\eng_wp\3871.010 Smart Sand - fy2024\wp\report\ch-2 - introduction.docx
3-1 JOHN T. BOYD COMPANY 3.0 PROPERTY OVERVIEW 3.1 Description and Location Smart Sand’s Ottawa Mine is an active surface frac sand mining and processing operation that produces premium branded NWS product for use in the hydraulic fracturing process (known as “fracking”) to produce petroleum fluids, such as oil, natural gas, and natural gas liquids. Figure 6.2 (page 6-7) shows the general layout of the Ottawa property, including locations of mine offices and ancillary facilities, processing plants, loadout facilities, and current and former mining pits. The Ottawa Mine is located in LaSalle County, Illinois, on a contiguous block of property totaling approximately 819 acres with surface and mineral rights reportedly owned in fee by Smart Sand. The subject property is situated approximately five miles west of the city of Ottawa, and approximately 60 miles southwest of Chicago. Ottawa’s off-site rail transloading facility is located in Peru, Illinois, approximately 7 miles west of the mining operation. Geographically, the Ottawa frac sand processing plant is located at approximately 41°20'51.18"N latitude and 88°57'25.85"W longitude. 3.2 History Smart Sand’s Ottawa Mine has operated since 2014, mining and producing premium NWS for use in the oil and gas industry. NWS has historically been extensively mined, via surface mining operations, in the north central portion of the United States (Minnesota, Wisconsin, and Illinois, and to lesser extents in Arkansas and Iowa). The primary sources of NWS are from the Ordovician Age Saint Peter, and the Cambrian Age Jordan, Wonewoc, and Mount Simon Formations, which are mineable at the surface throughout an area spanning from south central Minnesota into Wisconsin and portions of Northern Illinois. Smart Sand purchased the Ottawa Operation from Eagle Materials in September 2020. Eagle Materials originally purchased the Ottawa Property as a greenfield in 2012, developing the property and commencing mining and wet processing operations in 2014. Ottawa’s Mine Safety and Health Administration (MSHA) identification number (1103253) was assigned in 2012.
3-2 JOHN T. BOYD COMPANY 3.3 Property Control The Ottawa Property comprises approximately 819 contiguous acres of surface and subsurface mineral rights reportedly owned in fee by Smart Sand. It is BOYD’s understanding that there are no additional royalties, overriding or limited royalties, working interests, production payments, net profit interests, or other mineral interests in the Ottawa Property. 3.4 Adjacent Properties A majority of Illinois frac sand mining activity occurs in LaSalle County. Mining activity in this region exploits the Ordovician Age Saint Peter Formation Sandstone, primarily for the purpose of producing frac sand, although the relatively clean nature of the deposit lends to other industrial uses as well, such as foundry applications and glass sands. Nearby frac sand mines include U.S. Silica’s Ottawa operation and Iron Oak Energy’s Wedron operation, located approximately three and nine miles east of Smart Sand’s Ottawa operation, respectively. There is no information included in the preparation of this report that has been sourced from adjacent operations. 3.5 Regulation and Liabilities The Ottawa Mine operates under several permits and must comply with various other federal, state, and municipal regulations that do not require a specific permit. Smart Sand reports that necessary permits are in place or applied for to support immediate operations. New permits or permit revisions may be necessary from time to time to facilitate future operations. Given sufficient time and planning, Smart Sand should be able to secure new permits, as required, to maintain its planned operations within the context of the current regulations. Smart Sand pays property taxes to the local government in LaSalle County in order to maintain ownership of the Ottawa property. To the extent known to BOYD, there are no current violations, fines, liens, or other significant factors or risks that may affect access, title, or the right or ability to perform work on the Ottawa property.
3-3 JOHN T. BOYD COMPANY 3.6 Accessibility, Local Resources, and Infrastructure Smart Sand’s Ottawa Mine is located near a number of small towns in north-central Illinois. Ottawa has a population of about 18,000, and county-wide, LaSalle County has a population of over 108,000, based on 2019 population estimates. General access to the Ottawa Mine is via a well-developed network of primary and secondary roads serviced by state and local governments. These roads offer direct access to the mine and processing facilities and are open year-round. Primary vehicular access to the property is via U.S. Highway 6, with nearby access to Interstate 80 and Interstate 39. The Ottawa operation utilizes an off-site rail loadout facility located in Peru, Illinois, approximately 7 miles west of the site, with access to the BNSF rail network to transport a majority of its finished frac sand product. Local industrial customers load over the road trucks from the operation’s storage silos. Several regional airports are within just over an hour’s drive from the mine, and the nearest major international airports, Chicago O’Hare International Airport and Chicago Midway International Airport, are less than two hours by road. Reliable sources of three phase electrical power, natural gas, and other miscellaneous materials are readily available. Water supplied to the operation is via various sources such as, on-site wells, on-site ponds, and public water. 3.7 Physiography The Ottawa Property is located in the Bloomington Ridged Plain of the Central Lowland Province within the Fox Valley and Illinois River Valley regions of northern Illinois. The Bloomington Ridged Plain consists of Wisconsinian Age tills characterized by low, broad moraines. Most of LaSalle County is drained by the Illinois River and its tributaries, the Fox, Vermilion, and Little Vermilion Rivers. The Illinois River flows into the Mississippi River, eventually reaching the Gulf of Mexico. The Illinois River is approximately 2.5 miles south of the Ottawa property. Starved Rock State Park is approximately 3 miles to the southwest, along the southern bank of the Illinois River. Care must be taken in defining the presence of paleochannels, which may replace the critical upper portion of the Saint Peter Sandstone Formation locally.
3-4 JOHN T. BOYD COMPANY Surface topography of the Ottawa property is relatively flat lying, ranging from approximately 590 ft amsl to 640 amsl. Land cover in the immediate area consists of vegetated prairies that have been primarily utilized for agriculture purposes, with interspersed marshes, wetlands, and occasional small groves of forested areas. 3.8 Climate Near the Ottawa operation, summers are typically warm and humid; winters are cold and windy; skies are partly cloudy for most of the year. Average high temperatures may range from 14ºF to 85ºF, with the months of June-August being the hottest, and November-March exhibiting average lows at or below freezing (32ºF). Average annual rainfall is approximately 36 in, with approximately 82 days of rainfall annually. Average annual snowfall is approximately 25 in, with an average 13 days per year of notable snowfall. In general, the operating season for the Ottawa Mine is year-round. Adverse weather conditions seldom restrict or interfere with the mining, processing, and loading operations; however, extreme weather conditions may temporarily impact operations. Severe thunderstorms may often produce heavy rainfall and winds, resulting in periodic flooding of some portions of the region. Although rare, the area may experience tornadoes and flash floods from extreme weather events. q:\eng_wp\3555.027 ss - utica fy25\report work\draft 1\ch-3 - property description.docx
4-1 JOHN T. BOYD COMPANY 4.0 GEOLOGY 4.1 Regional Geology NWS are generally located in the north-central portion of the United States (Minnesota, Wisconsin, and Illinois, and to lesser extents in Arkansas and Iowa). NWS is found in poorly cemented Cambrian and Ordovician sandstones and in unconsolidated alluvial deposits locally derived from these sandstones. The Saint Peter, Jordan, Wonewoc, and Mount Simon Formations are the primary sources of NWS. Smart Sand’s Ottawa Mine is located in the northern extents of the Illinois Basin region. The Illinois Basin covers approximately 110,000 square miles, encompassing nearly all of the state of Illinois, extending into southwestern Indiana, and western Kentucky. The project area is positioned on an uplifted section of the LaSalle Anticlinorium, which was folded and pushed upwards as much as 2,500-ft during deformation. During the Pleistocene Epoch, glaciation had formed over much of the state, and then eventually retreated. Between the combination of glaciers griding away surface rock as they advanced, and the subsequent inundations of meltwater as the glaciers retreated, much of the overlying material was eroded away. The Ottawa operation mines and processes sands from the Middle Ordovician Age Saint Peter Sandstone, which is a massive formation in areal extent and thickness. The formation is found principally in the area drained by the Mississippi River and its tributaries, spanning north to south from Minnesota to Arkansas, and east to west from Illinois into Nebraska and South Dakota. On a regional basis, the Saint Peter ranges in thickness from a few feet to over 1,200 ft, with a localized thickness between 100 ft to 200 ft. Sand comprising the Saint Peter Formation was originally deposited in clear shallow waters, near advancing marine shorelines dominated by eolian dune and beach processes. Since deposition, the formation has experienced several episodes of subsidence and uplift. Except where it has been removed by erosion, the Saint Peter covers most of the Illinois Basin at depths varying from a few feet to almost 7,000 ft. The formation outcrops in four principal areas of northern Illinois: (1) the Ottawa-Utica- Millington area, where it outcrops along the Illinois and Fox rivers; (2) the Oregon-Dixon area; (3) the Brookville-Harper area; and (4) the Calhoun County area. In northern Illinois, the thickness of the formation has been reported to reach over 300 ft; however, it generally occurs as a 100 ft to 200 ft thick sandstone bed. Variations in the thickness of
4-2 JOHN T. BOYD COMPANY the Saint Peter are primarily related to a combination of post depositional erosional processes and its highly irregular lower boundary. The Saint Peter Sandstone is a super-mature quartz arenite (approximately 99% quartz in composition) that consists primarily of well-sorted, fine- to medium-sized, well-rounded quartz grains that are friable or weakly cemented and generally free from clay, carbonates, and heavy minerals. On a regional basis, the formation exhibits grain size that generally ranges from coarser in the upper section, to finer in the lower section. As a rule, the lower portion of the formation is fine-grained with iron, alumina, and carbonate contamination increasing with depth. 4.2 Property Geology 4.2.1 General Stratigraphy The Saint Peter Sandstone is the only stratigraphic unit of economic interest at the Ottawa operation and is very uniform in depositional nature and continuity throughout much of the surrounding region. BOYD considers the subject silica sand deposit to be of low geologic complexity. Ordovician and Pennsylvanian sedimentary strata comprise the uppermost stratigraphic units underlying the surface of the Ottawa property. These units primarily include bedrock of, in order of deposition: Ordovician Age Prairie du Chien, Ancell, Platteville, and Galena Groups, and Pennsylvanian Age Carbondale Formation deposits. Locally, Quaternary alluvium is found at the surface, consisting generally of glacial tills with moderate amounts of gravel, sand, and silt. A generalized stratigraphic chart of the surficial geologic units in LaSalle County, Illinois is presented in Figure 4.1, on the following page.
4-3 JOHN T. BOYD COMPANY Figure 4.1: Generalized Stratigraphic Chart, LaSalle County, Illinois The following text discusses the strata encountered on and around the Ottawa Property, in depositional order. Shakopee Formation The Shakopee Dolomite of the Prairie du Chien Group is composed of argillaceous to pure, very fine-grained dolomite with some thin beds of medium-grained, cross-bedded sandstone, medium-grained dolomite, green to light gray shale, and buff siltstone. Saint Peter Formation The Saint Peter Sandstone unconformably overlies the Shakopee Dolomite formation and is composed of three members. The lower unit, the Kress Member, consists of chert conglomerate with beds of red and green shale and medium- to coarse-grained sandstone. The remainder of the Saint Peter Formation is composed of well-rounded, well-sorted, medium- to coarse-grained sandstone of the Tonti and Starved Rock Members, in depositional order. Locally, the upper part of the Saint Peter can be poorly consolidated, becoming more consolidated with depth. Glenwood Formation The Glenwood Formation is a highly varied unit of poorly sorted sandstone, impure dolomite, and green shale overlying the Saint Peter Sandstone. These sandstones have a distinctive bimodal, or “pudding stone,” texture, with medium grains of well-rounded quartz sand, like those of the Sain Peter, but contained in a matrix of very fine sand and coarse silt. The Glenwood sandstones also contain a variety of heavy minerals, including
4-4 JOHN T. BOYD COMPANY abundant garnet. This unit is generally not present in the immediate vicinity of the Ottawa operation but can be found south of the property. Platteville and Galena Formations The Platteville and Galena Formations are often combined due to consisting mainly of carbonate sequences of limestone and dolomite. These formations are typically present south of the Ottawa operation, but not in the immediate area of study. Tradewater and Carbondale Formations These Pennsylvanian strata are predominantly clastic and contain subordinate amounts of coal and limestone. While these formations are not found within the boundaries of the Ottawa property, they comprise the primary near-surface bedrock strata south of the bluffs that border the Illinois River Valley. Undifferentiated Quaternary Alluvium Surface geology consists of what is mapped as the Quaternary Age Cahokia Alluvium, an unconsolidated interval of poorly sorted silts, clays, and sand and gravels. Thickness of this unit varies greatly in the region but is very thin within the Illinois River Valley. 4.2.2 Structural Geology The Saint Peter Sandstone at Ottawa lies very near the surface (thereby creating favorable mining conditions) primarily for two reasons: Firstly, one of the most prominent structural features in the Illinois Basin, the LaSalle Anticlinorium, has uplifted the sandstone formation from its original depth; Secondly, glacial floodwaters of the Late Wisconsin Episode carved the upper reaches of the Illinois River Valley, removing most of strata overlying the Saint Peter Sandstone, leaving the formation in close proximity to the surface as a bedrock bench that is easily identifiable. On the south bank of the Illinois River, Saint Peter Sandstone forms bluffs and outcrops in the valleys incident to the bluffs spanning from Ottawa to Little Rock, Illinois. In this area, the overlying formations are principally Pennsylvanian Age beds, though locally, as at the edge of the bluff in Starved Rock State Park and near Little Rock, the sandstone is bare or is covered with a thin mantle of soil or glacial till. The Saint Peter deposit on the Ottawa property is flat lying with no evidence of faulting, and has been eroded to an average thickness of approximately 100 ft. The formation is a white to buff, with fine to medium grained ortho-quartzite. It contains rounded, clear polished sand quartz grains with minor secondary silica and clay cement. Care must be
4-5 JOHN T. BOYD COMPANY taken in defining the presence of erosion channels, which can replace the critical upper portion of the Saint Peter Sandstone locally. Grain size distribution drives mine planning at the Ottawa Sand Mine. Iron tends to be concentrated near the surface and is visible as orange staining. Iron also increases near the bottom sandstone contact, occurring mostly as pyrite. The deposit is coarser in the upper half, where part of the formation is eroded. Multiple mining faces must operate simultaneously to ensure an adequate composition of ROM material is fed to the processing plants in order to meet frac sand product size specifications. A cross-section through the deposit is provided in Figure 4.2 (page 4-7). 4.3 Frac Sand Geology Frac sand is a naturally occurring, high silica content quartz sand, with grains that are generally well-rounded. The main difference between frac sand and other sands is that frac sand grains are relatively pure in composition, consisting almost entirely of quartz; other sands have numerous impurities that may be cemented to the quartz grains. The pure quartz composition of frac sand grains, along with being well-rounded and spherical in shape, gives these sands the characteristics (crush strength, high acid solubility, low turbidity) that are sought after by oil and gas producers for use in developing wells. The sands mined at Ottawa are NWS that are processed into various high quality frac sand products. Frac sands generally exhibit the following characteristics required by oil and gas producers for use in developing wells: • High-purity – frac sand grains are relatively pure (typically, >95% silicon dioxide) in composition and almost entirely free from contaminants. Typical sand deposits have numerous impurities fused to the silica grains, such as iron, carbonate, potassium, and other trace elements/minerals, which can make them more susceptible to mechanical and chemical alteration. Mineralogical purity of silica content is a characteristic of mature sand, which has been highly reworked and well sorted, so that the mechanically and chemically less-resistant minerals and fine particles have been dissolved or winnowed away. • Homogeneous grain size – hydraulic fracturing procedures require sand in a relatively narrow range of grain sizes which are dependent on the specific geological conditions of the well and the fracking procedures used. Larger sand grains generally provide better permeability, but smaller sand grains are typically stronger. When describing frac sand, the product is frequently referred to as simply the sieve cut, e.g., 20/40 mesh sand—meaning that 90 percent of the sand is fine enough to pass through a 20-mesh sieve and is coarse enough to be retained on a 40-mesh sieve.
4-6 JOHN T. BOYD COMPANY Common frac sand sizes include 20/40 mesh, 30/50 mesh, 40/70 mesh, “100 mesh”, “200 mesh”, and finer. The size ranges for “100 mesh” and “200 mesh” vary significantly between manufacturers. As of the date of this report, finer sands such as 40/70 mesh and “100 mesh” have become more widely utilized in shale gas well fracturing. • High sphericity and roundness – Sphericity and roundness describe the overall shape of the sand grains. Sphericity measures how close the grains approach the shape of a sphere while roundness measures the relative sharpness of corners and curvatures of the grains. Greater sphericity and roundness provide better grain strength and porosity/permeability between grains, allowing better flow of oil and gas from the fractures to the wellhead. A more spherical shape also enables the grains to be carried in the fracking fluid with minimal turbulence. • High crush resistance – Crush resistance of frac sand is dependent upon the hardness and shape of the sand grain. Generally, a high percentage of silica in the sand increases its crush resistance. Additionally, monocrystalline grains are stronger than composite grains. Crush resistance is expressed as a K-value that indicates the highest pressure (rounded to the nearest 1,000 psi) that generates less than 10 weight percent fines (i.e., crushed sand grains). For example, a K-value of 7 means that, at 7,000 psi pressure, no more than 10 weight percent fines were generated, but more than 10 weight percent fines were generated at the next highest pressure. The higher the K-value, the more crush-resistant the sand is. • Low acid solubility – Acid solubility is an indication of the amount of soluble cement or soluble mineral grains (i.e., non-silica contaminants) in the frac sand; low solubility requires a high silica content, as pure quartz tends to be insoluble under normal conditions. • Low turbidity – Turbidity is a measure of the clay, silt, or other fine grains and impurities in the sand. Low turbidity is a result of mineralogical maturity and grain-size sorting in the natural depositional environment. Generally, fine suspended matter in the mined sand is washed out during processing, so this property can be somewhat controlled for the final product. Frac sands are generally characterized by a high silica content, high roundness and sphericity, white color, and lack of deleterious material. Because of their monocrystalline structure, these sands have superior grain strength when compared to other silica sands. q:\eng_wp\3555.027 ss - utica fy25\wp\report\ch-4 - geology.docx
5-1 JOHN T. BOYD COMPANY 5.0 EXPLORATION DATA 5.1 Background Smart Sand acquired the Ottawa property in September 2020 from Eagle Materials. BOYD, in July 2020, prepared an initial Resource and Reserve Estimate for the Ottawa Mine as of the date of acquisition, which utilized available exploration information provided by Smart Sand. Exploration, sampling, and testing completed primarily by previous owners of the subject property, with Smart Sand completing an additional exploratory drill hole in 2024. 5.2 Exploration Procedures 5.2.1 Drilling and Sampling Based on information provided by Smart Sand, there have been several exploration drilling programs performed on the Ottawa property. In total, there have been 30 drill holes completed on the property; however, BOYD utilized the results of only 15 exploration drill holes to develop the geologic model of the Ottawa deposit, as these were the only drill holes with sieve analyses (tested on 10 ft increments) and reliable overburden and sand thickness data available. The lithologic data obtained from the 15 drill holes utilized were compiled into a database for input into the BOYD geologic model. This data was the principal source of information used to define the extent of the overburden volumes, the sand and waste volumes and tonnages, and the corresponding sand product distribution (based on particle size and quality) of the Saint Peter Formation sand underlying the Ottawa property. As neither Smart Sand, nor BOYD, were involved with any of the exploration and sampling activities prior to Smart Sand’s acquisition of the Ottawa Property, no detailed information pertaining to the drilling and sampling equipment utilized, sampling and logging methodologies, or descriptions of field work conducted in relation to this prior exploration was readily available. Smart Sand independently completed one additional exploratory drill hole in 2024 to confirm geologic continuity and particle size distributions in the southern portion of the property, providing BOYD with summary information such as a field log, internally completed sieve testing results, and the drill hole’s location. Due to the lack of detailed information available related to the completed exploration on the Ottawa Property, BOYD is unable to opine on the level of professionalism or whether
5-2 JOHN T. BOYD COMPANY the methodologies and procedures used conformed to generally accepted industry standards. We can, however, confirm that the procedures applied by Stim-Lab for the preparation and analyses of samples provided to the lab were professionally prepared and documented. Although detailed exploration procedures were not available, and much of the resulting data was limited, it is customary to accept basic drilling and quality testing data as provided by the client, subject to the reported results being judged representative and reasonable. As BOYD only utilized those data with adequate lithologic data and lab testing results during our review, we opine that the information utilized is sufficient for the purposes of evaluating and estimating frac sand resources and reserves on the Ottawa property. 5.2.2 Frac Sand Testing Smart Sand provided BOYD with the results of two sets of sand samples (2011 and 2018 campaigns) that were sent to Stim-Lab for API/ISO analysis. Stim-Lab received two sets of various product size samples from the Ottawa property: • Three sand samples labelled “Illinois Cement 20/40”, “Illinois Cement 40/70”, and “Illinois Cement 70/140”, submitted by Eagle Materials on August 3, 2011. • Four sand samples labelled “NWS 20/40”, “NWS 30/50”, “NWS 40/70”, and “NWS 100M” submitted by Northern White Sand, LLC on August 3, 2018. When the samples were received by Stim-Lab, they prepared and analyzed each sample for particle size distribution. The general procedure for particle size distribution analysis was as follows: 1. The sample was dried to remove moisture. 2. A 600- to 1,200-gram subsample was collected and weighed. 3. The subsample was placed in a blender for three minutes to break up the material as much as possible. 4. The blended subsample was then placed on a 200-mesh wash screen, and thoroughly washed to remove any fine materials (e.g., clays and silts). 5. The remaining larger than 200 mesh (+200 mesh) material is then dried and weighed to determine the mass of fines that were washed out (i.e., wash loss). 6. The cleaned subsample was then either placed into a sieve stack of different mesh sizes and agitated for a period of 20 minutes, or run through a high-speed
5-3 JOHN T. BOYD COMPANY photographic particle size analyzer (i.e., CAMSIZER) to determine the particle size distribution of the subsample. Stim-Lab then prepared each of the sieved sample sizes for API/ISO analysis of frac sand characteristics. Results from the testing grain size distribution analyses and API/ISO testing are summarized in Section 5.3. 5.2.3 Other Exploration Methods No other methods of exploration (such as airborne or ground geophysical surveys) are reported for the Ottawa property. 5.3 Laboratory Testing Results The relatively uniform nature of the Saint Peter Sandstone underlying the Ottawa property, combined with the results of independent laboratory testing, indicate the subject property is capable of producing a suite of 20/100-mesh frac sand products that meet various customer specifications. 5.3.1 Grain Size Distribution Smart Sand provided BOYD with in-place grain size distribution data from the 15 drill holes utilized in our review. Results of these data from the updated Ottawa model are presented in Table 5.1, below. The preceding table highlights the relative size consist of the sands found within the Ottawa Property deposit, indicating approximately 84% of the sand particles are concentrated between the “passing 20-mesh” and “retained 100-mesh” size fraction. Moreover, of the 20/100-mesh sand fraction, approximately 71% of the marketable product consists of the finer 40/100-mesh sands. 5.3.2 Grain Shape (Sphericity and Roundness) Grain shape was analyzed according to API/ISO, Section 7. Under this standard, recommended sphericity and roundness values for proppants are 0.6 or greater. As part of the grain shape analysis, the presence of grain clusters (weakly cemented grain
5-4 JOHN T. BOYD COMPANY aggregates) and their approximate proportion were not observed in the samples analyzed. 5.3.3 Acid Solubility Acid solubility was analyzed according to API/ISO, Section 8. Under this standard, 5 grams of sand is treated with 100 milliliters of 12:3 hydrochloric acid to hydrofluoric acid at 150oF for 30 minutes. The recommended maximum acid solubility for proppants in the 30/50-mesh size and coarser size range is 2.0%, and for proppants in the 40/70-mesh and finer size range is 3.0%. 5.3.4 Turbidity Turbidity was analyzed according to API/ISO, Section 9. Under this standard, the suggested maximum frac sand turbidity should be equal to or less than 250 nephelometric turbidity units (NTU). 5.3.5 Crush Resistance Crush resistance is a key test that determines the amount of pressure a sand grain can withstand under laboratory conditions for a two-minute duration. The sample was analyzed according to API/ISO, Section 11. Under this standard, the highest stress level (psi) in which the proppant produces no more than 10% crushed fine material is rounded down to the nearest 1,000 psi and reported as the “K-value” of the material. 5.3.6 Quality Summary Stim-Lab performed API/ISO analyses on the samples provided, with the following tables summarizing results from the two separate drilling and sampling campaigns from which the sample materials were obtained. Results from the 2011 samples (20/40, 40/70, and 70/140-mesh), provided to Stim-Lab in August 2011, are presented in Table 5.2, below. Table 5.2: Ottawa API/ISO Test Results by Product Size (2011 Composite Samples) API RP 19C API RP 19C Result Recommended Result Result Recommended Test 20/40-mesh Specification 40/70-mesh 70/140-mesh* Specification Sphericity 0.7 ≥ 0.6 0.6 0.6 ≥ 0.6 Roundness 0.7 ≥ 0.6 0.6 0.6 ≥ 0.6 Acid Solubility (%) 0.6 ≤ 2.0 0.9 1.2 ≤ 3.0 Turbidity (NTU) 44 ≤ 250 35 35 ≤ 250 K-Value (000 psi) 6 - 7 9 - *Currently, 70/140-mesh frac sand does not have an API/ISO specification.
5-5 JOHN T. BOYD COMPANY Results from the 2018 samples (20/40, 30/50, 40/70, and 100-mesh), provided to Stim-Lab in August 2018, are presented in Table 5.3, below. The above sample testing suggests that the Ottawa Mine can produce frac sands which meet minimum API/ISO recommended testing characteristics. BOYD notes that the Ottawa operation has a prior history of selling various frac sand sized products to various E&P and drilling services companies (Eagle Materials1 preacquisition by Smart Sand, and by Smart Sand thereafter). In addition to frac sand, industrial sands customers continue to comprise a significant amount of the finished sand products sales at the Ottawa operation. 5.4 Data Verification For purposes of this report, BOYD notes that we prepared an initial review and subsequent TRS for Smart Sand’s Ottawa property in 2020, and have since prepared updates to the estimated frac sand resources and frac sand reserves, as material changes have occurred in the development of the operation. Material changes may include but are not limited to: new exploration drilling and testing data; the purchase or sale of property; changes in demand for product sizes; operational changes or updates. The December 31, 2025 reserve estimate for the Ottawa property is based on historic drill hole data provided to BOYD. It is customary in preparing frac sand resource and frac sand reserve estimates to accept basic drilling and quality testing data as provided by the client, subject to the reported results being judged representative and reasonable. As we have judged the drilling and quality data representative and reasonable, we opine that they are still representative and reasonable for use in the December 31, 2025 resource and reserve estimate. q:\eng_wp\3555.027 ss - utica fy25\wp\report\ch-5 - exploration.docx 1 2020EM 2020 Annual Report and Form 10-K March 31, 2020, page 19. Table 5.3: Ottawa API/ISO Test Results by Product Size (2018 Composite Samples) API RP 19C API RP 19C Result Result Recommended Result Result Recommended Test 20/40-mesh 30/50-mesh Specification 40/70-mesh 70/140-mesh* Specification Sphericity 0.8 0.8 ≥ 0.6 0.7 0.7 ≥ 0.6 Roundness 0.7 0.7 ≥ 0.6 0.6 0.6 ≥ 0.6 Acid Solubility (%) 0.3 0.3 ≤ 2.0 0.3 - ≤ 3.0 Turbidity (NTU) 9 12 ≤ 250 7 - ≤ 250 K-Value (000 psi) 6 7 - 8 - - *Currently, 70/140-mesh frac sand does not have an API/ISO specification.
6-1 JOHN T. BOYD COMPANY 6.0 FRAC SAND RESOURCES AND RESERVES 6.1 Applicable Standards and Definitions Unless otherwise stated, frac sand resource and frac sand reserve estimates disclosed herein are completed in accordance with the standards and definitions provided by S-K 1300. It should be noted that BOYD considers the terms “mineral” and “frac sand” to be generally interchangeable within the relevant sections of S-K 1300. Estimates of any mineral resources and reserves are always subject to a degree of uncertainty. The level of confidence that can be applied to a particular estimate is a function of, among other things: the amount, quality, and completeness of exploration data; the geological complexity of the deposit; and economic, legal, social, and environmental factors associated with mining the resource/reserve. By assignment, BOYD used the definitions provided in S-K 1300 to describe the degree of uncertainty associated with the estimates reported herein. The definition of mineral (frac sand) resource provided by S-K 1300 is: Mineral resource is a concentration or occurrence of material of economic interest in or on the Earth's crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A mineral resource is a reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining dimensions, location or continuity, that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled. Estimates of frac sand resources are subdivided to reflect different levels of geological confidence into measured (highest geologic assurance), indicated, and inferred (lowest geologic assurance). Please refer to the Glossary of Abbreviations and Definitions for the meanings ascribed to these terms. The definition of mineral (frac sand) reserve provided by S-K 1300 is: Mineral reserve is an estimate of tonnage and grade or quality of indicated and measured mineral resources that, in the opinion of the qualified person, can be the basis of an economically viable project. More specifically, it is the economically mineable part of a measured or indicated mineral resource, which includes diluting materials and allowances for losses that may occur when the material is mined or extracted.
6-2 JOHN T. BOYD COMPANY Estimates of frac sand reserves are subdivided to reflect geologic confidence, and potential uncertainties in the modifying factors, into proven (highest assurance) and probable. Please refer to the Glossary of Abbreviations and Definitions for the meanings ascribed to these terms. Figure 6.1 shows the relationship between frac sand resources and frac sand reserves. Figure 6.1: Relationship Between Frac Sand Resources and Frac Sand Reserves In this report, the term “frac sand reserves” represent the tonnage of frac sand products that meets customer specifications and will be available for sale after processing of the ROM sand. 6.2 Frac Sand Resources 6.2.1 Methodology BOYD independently prepared estimates of in-place frac sand resources for the Ottawa Mine, as of December 31, 2025, by performing the following tasks: 1. Available drilling logs and laboratory testing results were reviewed to check for accuracy and to support development of the geologic model. The geologic database utilized 15 of 30 drill holes completed on the subject property (only drill holes deemed to have complete information including, sieve size, overburden thicknesses, and sand thickness data were utilized). The subsequent geologic data were imported
6-3 JOHN T. BOYD COMPANY into Carlson Software, a geologic modeling and mine planning software suite that is widely used and accepted by the mining industry. 2. A geologic model of the deposit was created in Carlson Software using industry-standard grid modeling methods well-suited for simple stratigraphic deposits. The geologic model delineates the top and bottom of overburden material, the mineable sand horizon, and the distribution of the product size fractions throughout the mineable deposit. The top and bottom of the mineable frac sand interval were established thusly: a. Aerial mapping as of August 29, 2025, in conjunction with provided drilling data, was used as the basis for estimating overburden and sand volumes and associated product distribution in the Carlson geologic modeling program. b. As there is a moderate amount of overburden material across the property, which ranges in thickness from 57 ft to 77 ft, the top of the mineable sand interval was defined as the base of the overburden material above the Saint Peter Sandstone. c. The bottom of the mineable sand interval was based primarily on a target mineable thickness of 90 ft. However, drill holes exhibiting higher concentrations of fine materials near their bottoms were also observed to define depths at which mining may be terminated due to the increased concentration of fines. 3. After reviewing the continuity and variability of the deposit, suitable resource classification criteria were developed and applied, which are discussed further in Section 6.2.2. 4. BOYD defined the mineable resources within the property as the area defined by Smart Sand management which included a mine plan. A viewshed was incorporated, which involved leaving an earthen berm constructed mainly of overburden and topsoil around the property to maintain a shielded view of mining activity from local roadways. Areas on the property deemed as non-mineable were excluded from resource consideration, such as: waste impoundments and stormwater ponds, processing facilities, and areas underlying the property boundary viewshed areas. 5. Estimation of the in-place resources assumes mining operations using standard surface excavation equipment, which is widely utilized for mining of similar deposit types. As such, the estimates were subject to the following setbacks and slope requirements: a. 100 ft setback inside of property lines. b. A final pit highwall slope of 80 degrees was applied from the top of the pit to the bottom of the mineable sandstone interval. c. The final pit floor was defined at an elevation ranging from approximately 440 ft amsl to 460 ft amsl, as defined by exploration results. 6. In-place volumes for each of the proposed mining blocks were calculated from the geologic model within Carlson Software. An in-place sandstone dry density of 127 pounds per cubic foot was used to convert the in-place sand resource volumes into tonnages.
6-4 JOHN T. BOYD COMPANY 7. BOYD then utilized provided production data to reconcile the estimate from date of volumetric estimate to December 31, 2025. 6.2.2 Classification Geologic assuredness is established by the availability of both structural (thickness and elevation) and quality (size fraction) information for the deposit. Resource classification is generally based on the concentration or spacing of exploration data which can be used to demonstrate the geologic continuity of the deposit. When material variations in thickness, depth, and/or sand quality occur between drill holes, the allowable spacing distance between drill holes is reduced. The following drill hole spacing criteria were established by BOYD after reviewing the available exploration data and geologic model, and used to classify the frac sand resources of the Ottawa property, as shown in Table 6.1, below: Table 6.1: Ottawa Property Drill Hole Spacing Parameters Resource Classification Spacing Requirement (ft) (Nominal Maximum) Measured 1,500 Indicated 3,000 Inferred 6,000 BOYD has classified all of the estimated frac sand resources within the defined mineable areas of the Ottawa property as either Measured or Indicated based on drilling density and the low geologic complexity of the deposit. BOYD is of the opinion that there is a low degree of uncertainty associated with each of the resource classifications. 6.2.3 Estimation Criteria Development of the frac sand resource estimates for the Ottawa Mine assumes mining and processing methods and equipment that have been utilized successfully at the operation for several years. The target mining horizon manifests as a continuous sand unit exhibiting relatively consistent depth, thickness, and quality. The high-quality sand is easily distinguished from the overlying waste interval; as such, interpretation of the mineable horizon is relatively easy to distinguish. Mined sand is processed to remove out-size materials (i.e., sand which is either too coarse or silts/fines which cannot be sold) and produce saleable finish frac sand products. The amount of finished sand produced as a percentage of the raw sand mined is referred to as the processing yield (or plant yield), which is analogous to the “cut-off grade” of other mining operations. If the expected processing yield of the
6-5 JOHN T. BOYD COMPANY sand is too low, the cost of production will outweigh sales revenues, and the deposit cannot be economically mined. The minimum processing yield—based on historical and forecasted economics (refer to Chapter 10 through 12)—for the Ottawa Sand Mine is estimated to be 68%. It should be noted that the cut-off grade is below the expected processing yield of the deposit. Other limiting criteria, such as minimum mining thickness or maximum stripping ratio (the ratio of waste to sand excavated) generally do not negatively impact the economics of the Ottawa Mine when considering the results of the geologic data and overall mine planning used to estimate the surface mineable frac sand resources. The limits of the frac sand resources are constrained to those portions of the interpreted sand deposit that: • Are reasonably defined by available drilling and sampling data. • Contain products that meet generally accepted specifications and can be sold at a profit (i.e., be economic). • Honor any legal mining constraints (e.g., property boundaries, environmental setbacks, utility and infrastructure setbacks, etc.). • Adhere to physical mining limitations. Frac sand resources for the Ottawa Mine are assessed for reasonable prospects for eventual economic extraction by reporting: (1) those resources which have been subsequently converted to frac sand reserves after the application of all material modifying factors, and/or (2) those resources which have similar characteristics (i.e., mining conditions, and expected processing yields and qualities) to those converted to frac sand reserves. The criteria employed in developing the estimates of frac sand resources for the Ottawa Mine is supported by historical results and aligns with those employed at similar operations. As such, it is BOYD’s opinion that the stated criteria are reasonable and appropriate for the estimation of frac sand resources at the Ottawa Mine. 6.2.4 Frac Sand Resource Estimate There are no reportable frac sand resources excluding those converted to frac sand reserves for the Ottawa Mine. Quantities of frac sand controlled by Smart Sand within the defined boundaries of the Ottawa property which are not reported as frac sand reserves are not considered to have potential economic viability; as such, they are not reportable as frac sand resources.
6-6 JOHN T. BOYD COMPANY 6.2.5 Validation BOYD independently estimated in-place frac sand resources for the Ottawa Mine based on the provided drilling, sampling, and testing data obtained from Smart Sand. Utilizing industry-standard grid modeling techniques we have estimated volumes of frac sand indicated by the available data. Based on our review of the information provided by Smart Sand, we are of the opinion that the data provided are reasonable and appropriate. Furthermore, it is our opinion that the estimation methods employed are both appropriate and reasonable for the deposit type and proposed extraction methods. 6.3 Frac Sand Reserves 6.3.1 Methodology Estimates of frac sand reserves for the Ottawa Mine were derived contemporaneously with estimates of frac sand resources. To derive an estimate of saleable product tons (proven and probable frac sand reserves), the following modifying factors were applied to the in-place measured and indicated frac sand resources underlying the respective mine plan areas: • The mining recovery factor utilized in the estimates assumes that approximately 5% of the mineable (in-place) frac sand resource will not be recovered for various reasons. Applying this recovery factor to the in-place resource results in the estimated ROM sand tonnage that will be delivered to the wet process plant. • A wet plant recovery factor, which accounts for removal of out-sized (i.e., larger than 20-mesh and smaller than 100-mesh) sand was derived from sieve analysis results from drilling data. The overall wet plant recovery is approximately 84.3%. • A 97% dry processing recovery, which accounts for losses in the dry processing plant due to minor inefficiencies, was used in the estimate of the reserves. The overall product yield (after mining and processing losses) for the Ottawa Mine is estimated at 77.7%. That is, for every 100 tons of in-place frac sand resources available, approximately 77.7 tons will be able to be recovered and sold as product. 6.3.2 Classification Proven and Probable frac sand reserves are derived from Measured and Indicated frac sand resources, respectively, in accordance with S-K 1300. BOYD is satisfied that the frac sand reserve classification reflects the outcome of technical and economic studies. Figure 6.2, on the following page, illustrates the reserve classification of the Ottawa frac sand deposit.
6-8 JOHN T. BOYD COMPANY 6.3.3 Frac Sand Reserve Estimate BOYD’s estimate of surface mineable frac sand reserves for the Ottawa Mine totals 125.3 million saleable product tons, as of December 31, 2025. Estimated frac sand reserve tons reported in Table 6.2, below, are based on a LOM plan which, in BOYD’s opinion, is technically achievable and economically viable after the consideration of all material modifying factors. The reported reserves only include frac sand which is owned in fee by Smart Sand, as of December 31, 2025. The frac sand reserves of the Ottawa Mine are well-explored and defined. It is our conclusion that approximately 75% of the stated reserves can be classified in the Proven reliability category (the highest level of assurance) with the reminder classified as probable. The Ottawa Mine, and other frac sand operations in the area, have a well-established history of mining and selling frac sand products into the various tight shale oil and gas basins. BOYD has assessed that sufficient studies have been undertaken to enable the frac sand resources to be converted to frac sand reserves based on current and proposed operating methods and practices. Changes in the factors and assumptions employed in these studies may materially affect the frac sand reserve estimate. The estimated product distribution of the frac sand reserves is based on available laboratory gradation test data provided by Smart Sand. Grain size distribution and overall yields may vary based on the depth and location at which mining occurs. The economic viability of the stated frac sand reserves is demonstrated by the production and financial projections and marketing information presented in Chapters 10 through 12 of this report. The forecasted sales prices used in the estimation of frac sand reserves for the Ottawa Mine is estimated to be $24.71 per ton of finished frac sand (refer to Section 10.5 and Table 12.1 for further details). Mesh Size Proven Probable Total 20/40 27,960 8,660 36,620 40/70 53,856 18,159 72,015 70/140 12,362 4,340 16,702 Total 94,178 31,159 125,337 Table 6.2: Ottawa Mine Frac Sand Reserves as of December 31, 2025 Product Tons (000) by Classification
6-9 JOHN T. BOYD COMPANY 6.3.4 Significant Risks and Uncertainties The extent to which the frac sand reserves may be affected by any known geological, operational, environmental, permitting, legal, title, variation, socio-economic, marketing, political, or other relevant issues has been reviewed, if and as warranted. It is the opinion of BOYD that Smart Sand has appropriately mitigated, or has the operational acumen to mitigate, the risks associated with these factors. BOYD is not aware of any additional risks that could materially affect the development of the frac sand reserves. Given the data available at the time this report was prepared, the estimates presented herein are considered reasonable. However, they should be accepted with the understanding that additional data and analysis available after the date of estimate may result in changes to the current estimate. These revisions may be material. Based on our independent estimate and operations review, we have a high degree of confidence that the estimates shown in this report accurately represent the available frac sand reserves controlled by Smart Sand at the Ottawa Mine, as of December 31, 2025. 6.3.5 Reconciliation with Previous Estimates Figure 6.3, on the following page, illustrates the reconciliation between the December 31, 2021, frac sand reserve estimate of 128.8 million tons and the current frac sand reserve estimate of 125.3 million tons. The largest contributor to the reduction was mining depletion, which accounted for a decrease of approximately 3.2 million tons (2.5%), reflecting normal extraction of reserves during the reporting period. In addition, an estimate revision resulted in a further decrease of approximately 290,000 tons (0.2%), due to updated surface topography and refinement of reserve boundaries. The combined effect of these changes resulted in a total reserve decrease of 3.5 million tons, or approximately 2.7%, compared to the prior estimated.
6-10 JOHN T. BOYD COMPANY Figure 6.3: Reconciliation with Previous Frac Sand Reserve Estimate q:\eng_wp\3555.027 ss - utica fy25\wp\report\ch-6 - mineral resources and reserves.docx 128,811 -3,184 -290 125,337 Frac Sand Reserves as of December 31, 2021 Mining Production Estimate Revision Frac Sand Reserves as of December 31, 2025 Pr od uc t T on s (th ou sa nd s) 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000
7-1 JOHN T. BOYD COMPANY 7.0 MINING OPERATIONS 7.1 Mining Method The Ottawa Mine exploits the Saint Peter Sandstone which is extensively mined in the Ottawa-Utica, Illinois area. After grubbing surface vegetation, 50 ft to 75 ft of overburden is removed prior to exposing the approximately 90 ft thick sand deposit. A majority of the overburden material is excavatable, with the exception of a thin caprock above the sand which requires drilling and blasting. Approximately 60,000 tons per month of overburden is removed, mainly during the day shift, and hauled and dumped into a mined-out area of the pit. Approximately one 90-ft high bench of sandstone (no decking) is blasted on a 20 ft x 20 ft pattern each month, with drilling and blasting services contracted to a third-party. The night shift then loads and hauls approximately 6,000 to 9,000 tons of ROM sand to the dump hopper per 10-hour shift. The current mine plan and exploration drilling have projected the mineable pits to extend down to a base elevation of between 440 ft amsl to 460 amsl. Figure 7.1 illustrates the stripping bench and the sand bench from the rim of the pit. The operation has numerous dewatering pumps to maintain the working pit. Figure 7.1: Ottawa Quarry Pit looking North
7-2 JOHN T. BOYD COMPANY 7.2 Mine Schedule, Equipment, and Staffing Currently the mine pit operates two, 10-hour shifts, four days per week resulting in a 40-hour work week per shift. A 10-hour Friday shift is added when needed to meet demand. Generally, there are seven employees on the day shift and five employees on the night shift. Day shift primary pit mobile equipment involved in sand excavation includes: • Four 40T articulated haul trucks. • Three Various size front-end loaders. • One Deere 870 excavator. • One Grade • One Dozer. In addition, there are numerous support vehicles (maintenance trucks, skid steers, water truck, etc.) to complement the fleet. The mine, plants, and loadout operate year around, with staff consisting of approximately 40 employees. 7.3 Engineering and Planning The primary mine planning consideration is the safe, economical, and regular supply of raw high-quality sand feed to the processing plants. In commercial mining terms, the quantities of overburden removed, and sand excavated each year at the Ottawa Mine is considered modest. Mining plans are relatively simple and very flexible; able to be modified based on demand in a relatively short time frame. The sand deposit is relatively competent, and the mining depths are relatively shallow. As a result, slumping, or collapsing, has not been and is not expected to be a detriment to mining operations. Flooding of the mine’s pits may occur, but is considered manageable with existing pumping equipment. 7.4 Mine Sequence and Production Historical mine production has ranged from 750,000 to 1.4 million ROM tons over the past five years, reflecting adjustments in mining rates to align with sales demand and operational planning. Forecast mine production is projected to range from approximately
7-3 JOHN T. BOYD COMPANY 1.0 million ROM tons in 2026 to approximately 1.3 million ROM tons by 2030, after which production is expected to remain relatively constant over the remaining life of the mine. This forecast production profile is consistent with the demonstrated capabilities of the existing mining fleet and processing infrastructure and reflects a sustainable, steady-state operating plan aligned with the long-term capacity of the operation. As previously mentioned, the key driver of the mining operations is the adequate supply of feed material to the Ottawa Mine’s processing plants. At the projected production rates, the Ottawa Operation has an expected life of around 124 years. Future mine production, and hence the longevity of the mine, is directly related to the energy market demand for frac sand. Actual yearly production volumes may, and are likely to, fluctuate significantly based on this demand. The areal extents of the remaining mining areas (as shown in Figure 6.2, on page 6-7) and the geologic characteristics of the sand deposit afford the Ottawa Mine a great deal of operational and planning flexibility. Generally, mining operations are expected to advance in blocks outwards from the current operational areas in order to minimize haul distances and expand waste storage capacity as mining progresses. It is BOYD’s opinion that the forecasted production levels for the Ottawa Mine are reasonable, logical, and consistent with typical sand surface mining practices in the region. 7.5 Mining Risks Surface mines face two primary types of operational risks. The first category of risk includes those daily variations in physical mining conditions, mechanical failures, and operational activities that can temporarily disrupt production activities. Several examples are as follows: • Water accumulations/soft floor conditions. • Process water shortages. • Power curtailments. • Variations in grain size consistency. • Encountering excessive clay and other waste material. • Failures or breakdowns of operating equipment and supporting infrastructure. • Weather disruptions (power outages, dust storms, excessive heat etc.). The above conditions/circumstances can adversely affect production on any given day, but are not regarded as “risk issues” relative to the long-term operation of a mining
7-4 JOHN T. BOYD COMPANY entity. Instead, these are considered “nuisance items” that, while undesirable, are encountered on a periodic basis at many mining operations. BOYD does not regard the issues listed above as being material to the Ottawa operations or otherwise compromising its forecasted performance. The second type of risk is categorized as “event risk.” Items in this category are rare but include significant occurrences that are confined to an individual mine, and ultimately have a pronounced impact on production activities and corresponding financial outcomes. Examples of event risks are major fires or explosions, floods, or unforeseen geological anomalies that disrupt extensive areas of proposed or operating mine workings and require alterations of mining plans. Such an event can result in the cessation of production activities for an undefined but extended period (measured in months, and perhaps years) and/or result in the sterilization of frac sand reserves. This type of risk is minimal in a relatively simple surface sand mining operation. q:\eng_wp\3555.027 ss - utica fy25\wp\report\ch-7 - mining operations.docx
8-1 JOHN T. BOYD COMPANY 8.0 PROCESSING OPERATIONS 8.1 Processing Method Frac sand processing at the Ottawa Mine typically comprises the following three major components: • Wet Plant – ROM material from the pit is delivered to the wet plant where the oversize (e.g., gravel) and slime (e.g., fine sand and silt) material is removed. The wet plant does not crush the material, but predominantly scrubs (i.e., washes) and classifies (i.e., sizes) the raw feed material. • Dry Plant – The damp WIP material produced by the wet plant is dried and screened/sorted into finished products. • Storage and Loadout – Finished products are stored in silos and discharged via gravity from the bottom of the silos into highway trucks that transport a majority of finished frac sand product to a nearby rail transloading facility. The Ottawa Mine commenced operations in 2014, with ROM sand material hauled to an in-pit feed hopper before being slurried and pumped to an enclosed wet process plant. In 2018, a 1.6 million tons per year dry process plant was constructed on site, which has since been utilized to dry and finish the frac sand products on the Ottawa property, prior to being loaded onto rail. 8.1.1 Wet Plant Figure 8.1, on the following page, shows the enclosed wet plant, which has a nominal capacity to process approximately 450 tph of ROM sand. Material between 20-mesh and 140-mesh sizes is classified before being slurried to the dry process plant at the northeast end of the property. Waste material (<140-mesh sand and oversize) is hauled to a mined-out area of the pit and dumped. The wet plant operates two 10-hour shifts per day, four days per week, and utilizes typical screen-hydrosizer-cyclone classification and dewatering methods and an ultrafine circuit and thickener. Scheduling fluctuates based on product demand.
8-2 JOHN T. BOYD COMPANY Figure 8.1: Ottawa Wet Processing Plant 8.1.2 Decant/Dry Plant The slurried WIP (20/140-mesh size) material is pumped to an enclosed decant shed for dewatering prior to entering the drying circuit. A drag chain arrangement reclaims dryer sand from the top of the decant pile and conveys the sand to a 250 tph natural gas fired dryer. Dried sand is screened, predominantly into 20/40-mesh, 30/50-mesh,40/70-mesh, and 70/140-mesh (100-mesh) finished frac sand products. 8.1.3 Storage and Loadout Finished product is stored in four 2,000-ton truck loadout silos adjacent to the dry plant. Frac sand products are loaded onto highway trucks, and transported to the nearby Peru, Illinois rail loadout facility on the BNSF rail line, where it is loaded into bottom dump rail cars. Industrial sand customers also truck sand directly to their plants from the silos. The dry plant operates 20 hours per day, four to five days per week. Figure 8.2, on the following page, shows the operation’s decant shed, dry plant, and storage silos.
8-3 JOHN T. BOYD COMPANY Figure 8.2: Decant Shed and Dry Processing Plant 8.2 Production From a processing perspective, historical finished sand production has ranged from 625,000 tons to almost 1.1 million at peak levels, reflecting adjustments in plant throughput consistent with operational planning and product demand. Forecast finished sand production is projected to range from approximately 840,000 tons in 2026 to approximately 1.0 million tons by 2030, after which production is expected to remain relatively constant over the remaining life of the operation. This forecast production rate is consistent with the demonstrated capacity and performance of the existing processing facilities, including crushing, washing, drying, and classification circuits, and reflects a sustainable steady-state throughput level that can be reliably maintained over the long term. 8.3 Processing Risks BOYD is unaware of any reported interruptions, outages, shortages, or failures related to processing operations that have materially affected the Ottawa Mine. Given the operation is well-established, we opine that there is a low risk of such events materially affecting the estimates of frac sand reserves presented herein.
8-4 JOHN T. BOYD COMPANY Based on our review, it is BOYD’s opinion that the processing methods and existing equipment at the plant is sufficient for the forecasted production of finished frac sand products. q:\eng_wp\3555.027 ss - utica fy25\wp\report\ch-8 - processing operations.docx
9-1 JOHN T. BOYD COMPANY 9.0 MINE INFRASTRUCTURE 9.1 Overview All of the basic infrastructure required for the ongoing operation of the Ottawa Mine is in place. Figure 6.2 (page 6-7) illustrates the general layout of the infrastructure at the subject operation. Surface facilities currently located on the Ottawa property are well constructed and have the necessary capacity/capabilities to support Smart Sand’s near-term operating plans. Operational preference may lead to the upgrading of some existing facilities if the operation expands in the future. BOYD is unaware of any reported interruptions, outages, shortages, or failures to infrastructure requirements that have materially affected the Ottawa Mine’s operations. Given the operation is well-established, we opine that there is a low risk that such events would materially affect the estimates of frac sand reserves presented herein. 9.2 Transportation The Ottawa Mine is serviced by several roads maintained by the local municipality, county, and state governments. These roads are either paved or well-maintained graded roadways. Road access is available year-round. While some customers load highway trucks at the Ottawa Mine, a majority of finished frac sand products are transported via the BNSF rail line. Rail infrastructure is not available directly at the Ottawa property; however Smart Sand has a transloading facility in nearby Peru, Illinois that has historically been utilized to serve the operation. 9.3 Utilities The Ottawa Mine is serviced by three phase power and a natural gas pipeline routed along U.S. Highway 6, north of the property. Plant process water is supplied by water collected in the pit and ponds, and wash process water is recycled after fines are removed via settling with a flocculent in a thickener and series of constructed ponds.
9-2 JOHN T. BOYD COMPANY 9.4 Tailings Disposal The mining and processing of frac sand at the Ottawa Mine creates a substantial amount of tailings (i.e., waste material). These tailings are typically a mixture of clay, very fine sand, and other non-silica minerals. As the mine progresses, silt ponds are constructed in mined-out areas, where the solid materials settle to the bottom and water is recovered for reuse. 9.5 Other Structures and Facilities Wastewater from offices and other buildings is directed to a municipal sewer line. Potable water is provided by the local public water system. On-site facilities include a scale house, office, shop, and a quality laboratory located in the dry process plant. q:\eng_wp\3555.027 ss - utica fy25\wp\report\ch-9 - infrastructure.docx
10-1 JOHN T. BOYD COMPANY 10.0 MARKET ANALYSIS 10.1 Market Background 10.1.1 Frac Sand The modern North American frac sand industry emerged alongside the shale oil and gas revolution of the mid-2000s, when horizontal drilling and multi-stage hydraulic fracturing dramatically increased demand for high-quality proppant. Early shale completions placed a premium on high crush strength and proppant conductivity, which positioned NWS— sourced primarily from high-purity quartz formations in Wisconsin and Minnesota—as the industry’s benchmark material. NWS deposits such as the Saint Peter, Jordan, Wonewoc, and Mount Simon sandstones exhibit excellent sphericity, roundness, and >99% quartz content, characteristics that deliver superior performance under high closure stresses. As a result, NWS dominated the market through the early 2010s and was shipped via unit trains to every major unconventional basin, despite significant transportation costs associated with 1,000 to 1,500-mile rail hauls. Following the 2014–2016 oil price collapse, operators shifted from quality-driven to cost-optimized completion designs, accelerating adoption of high-proppant-intensity fracturing and longer laterals. This sharply increased total proppant mass per well and magnified logistics as a cost driver—often more than half of delivered sand cost in the Permian was attributable to transportation rather than mine-gate pricing. In response, the industry began developing regional or in-basin sands that could be trucked short distances from the mine to the well pad. Texas brown sands and analogous formations in Oklahoma and the Haynesville provided sufficient crush strength for many reservoir stress environments, even though they lacked the conductivity profile of NWS. Between 2016 and 2019, more than 20 new in-basin mines were constructed in the Permian alone, creating substantial overcapacity and dramatically reducing dependence on Midwestern supply. Industry analysts describe this period as a structural market realignment, with Permian in-basin penetration rising toward 70 to 80% of total proppant demand by 2019. The result is a bifurcated market architecture that persists today. In-basin sand now serves as the volume backbone for most major oil-dominant basins, driven by logistics efficiency, last-mile delivery integration, and reduced total well cost. Mine-gate pricing and transportation networks have become strategic differentiators, with infrastructure innovations—such as West Texas overland conveyor systems—further reducing reliance on long-haul rail. Meanwhile, NWS functions as a performance-oriented niche product,
10-2 JOHN T. BOYD COMPANY selected for wells with elevated closure stresses, complex fracture geometries, or estimated ultimate recovery (EUR) sensitive economics where conductivity degradation from regional sands may be unacceptable. Recent technical assessments indicate that while in-basin sands meet operational requirements for most Permian completions, NWS retains measurable conductivity and permeability retention advantages that can translate to improved long-term recovery in certain reservoir conditions. The competitive relationship between NWS and in-basin producers is best described as selective substitution rather than universal displacement: • In-basin producers dominate on delivered cost, making them the default choice for most high-volume Permian and Haynesville completions. • NWS maintains a defensible niche in wells with elevated closure stress, complex fracture networks, or high EUR sensitivity, where conductivity degradation from lower-quality sands may materially impact long-term production. • Supply elasticity differs sharply – in-basin suppliers expand and contract capacity quickly, whereas NWS supply is slower to adjust, leading to different pricing cycles across segments. • Vertical integration is a growing differentiator, with in-basin suppliers capturing value through last-mile logistics and storage, while NWS suppliers increasingly rely on strategic partnerships with railroads, terminals, and pressure pumpers to stabilize demand. Basin‑level competitive dynamics in frac sand markets are driven mainly by differences in logistics, cost structures, and sand quality relative to specific shale plays: Appalachia (Marcellus/Utica) • NWS retains strong share due to geological requirements and proximity to Midwestern supply. • Limited local sand resources of comparable quality. Bakken • Combination of NWS and regional sands; long rail distances common. • Delivered cost is competitive versus trucking local alternatives across North Dakota. Duvernay • Oil window – regional sands increasingly adopted for cost efficiency. • Deep gas window – NWS remains preferred due to high stress.
10-3 JOHN T. BOYD COMPANY Eagle Ford • Mixed NWS and regional sands historically; increasing in-basin supply reducing NWS share. • Logistics costs remain material due to dispersed well locations. Haynesville • High pressure environment increases NWS relevance, but many wells still use in- basin sand for cost reasons. • Delivered-cost advantages strongly influence procurement decisions. Montney • Among North America’s deepest unconventional plays. • NWS remains the primary proppant due to crush-strength requirements. • Regional Canadian sands are used selectively in shallower Montney benches. Permian Basin • In-basin sand has >80% market share. • NWS used only for selective high-stress benches or operator-specific conductivity programs. • Logistics integration (trucking fleets, silos, conveyors) is the dominant competitive advantage. 10.1.2 Industrial Sand Beyond its use as proppant in oil and gas operations, industrial sand is an essential raw material in a wide range of manufacturing, construction, and specialty industrial applications. These markets are generally more stable and less cyclical than frac sand, with demand driven primarily by construction activity, industrial production, and long- term infrastructure and manufacturing trends. One of the largest non-energy uses of industrial sand is in glass manufacturing, where high-purity silica sand is the primary ingredient in flat glass, container glass, fiberglass, and specialty glass products. These materials are used extensively in construction, automotive manufacturing, packaging, and renewable energy applications such as solar panels. Demand in this segment is closely tied to construction activity, automotive production, and long-term infrastructure investment. Industrial sand is also widely used in the foundry industry, where it serves as a molding medium for casting ferrous and non-ferrous metal components. Foundry sand must meet strict specifications for grain size, shape, and purity to ensure dimensional accuracy and
10-4 JOHN T. BOYD COMPANY surface finish of cast products. Demand for foundry sand is driven by manufacturing activity, particularly in the automotive, heavy equipment, and industrial machinery sectors. In addition, industrial sand is utilized in building products, including concrete, mortar, asphalt, and specialty building products. It is also an important component in filtration applications, where it is used in municipal water treatment, wastewater treatment, and industrial filtration systems due to its durability and chemical inertness. These applications provide steady, long-term demand supported by population growth, urbanization, and infrastructure maintenance. Other specialty uses include ceramics, chemical production, abrasives, and recreational applications, all of which require specific physical and chemical properties. These markets typically require high-purity material and consistent quality, making well- characterized deposits particularly valuable. Overall, non-frac industrial sand markets are characterized by relatively stable demand, long-term supply relationships, and less sensitivity to commodity price cycles compared to the energy sector. These markets provide diversification opportunities for industrial sand producers and support sustained demand for high-quality silica sand across a broad range of industrial applications. 10.2 Historical Sales Smart Sand supplies a range of frac sand products to major oilfield services companies and E&P companies operating in various North American oil and gas basins. Recent historical sales data (on a consolidated basis) provided by Smart Sand are summarized in Table 10.1, below. 2021 2022 2023 2024 2025 Product Sales (000 tons): Oakdale 2,350 3,386 3,353 3,534 3,551 Ottawa 839 945 790 566 582 Blair - - 402 1,150 1,309 Total 3,189 4,330 4,545 5,250 5,442 Net Sand Revenue ($ 000) 61,383 126,662 144,801 160,653 143,026 Average Selling Price ($/ton sold) 19.25 29.25 31.86 30.60 26.28 Note: Totals may not sum due to rounding. Net Sand Revenue and Average Selling Price are at the mine-gate. Table 10.1: Historical Sales Data
10-5 JOHN T. BOYD COMPANY As shown in Figure 10.1, below, almost 85% of Smart Sand’s sales in 2025 were of 40/70 and 100 Mesh frac sand. During the same period, Smart Sand sold approximately 314,000 tons of industrial sand, representing 5.8% of total sand sales, primarily sourced from the Ottawa Mine. Figure 10.1: Frac Sand Sales by Mesh Size In 2025, almost 68% of Smart Sand’s finished frac sand was destined for the Marcellus and Bakken basins (as shown in Figure 10.2, below). Figure 10.2: Frac Sand Sales by Basin/Play
10-6 JOHN T. BOYD COMPANY Figure 10.3, below, shows that approximately 80% of Smart Sand’s finished industrial sand production in 2025 was supplied to the foundry, glass manufacturing, and building products industries. Figure 10.3: Industrial Sand Sales by Industry Smart Sand has structured long-term contracts with some customers outlining volume commitments and, in some cases, fixed pricing. Smart Sand also services customers on a spot basis where volume thresholds are not set, and orders are serviced on an as-available basis at prevailing market prices. In 2025, contract sales accounted for approximately 69% of Smart Sand’s frac sand sales on a tonnage basis. Industrial sand sales, by contrast, were conducted almost entirely on a spot basis, reflecting the more transactional nature of those end-use markets. In 2025, Smart Sand’s frac sand segment exhibited a high degree of customer concentration, with the top five and top ten customers accounting for over 62% and 86% of total frac sand sales, respectively. In its industrial sand segment, the top five and top ten customers accounted for over 48% and approximately 65% of Smart Sand’s total industrial sand sales, respectively. 10.3 Market Outlook 10.3.1 Frac Sand NWS remains a critical proppant for high-performance completions in oil and gas wells, particularly in deep or high-stress reservoirs. While in-basin sand dominates bulk volumes, NWS continues to hold a defensible position where premium proppant
10-7 JOHN T. BOYD COMPANY performance is essential. The following outlines BOYD’s demand, supply dynamics, pricing expectations, and key market risks from the NWS perspective. Demand Outlook • Baseline demand for NWS remains stable, driven by its use in wells requiring high- performance proppant, such as deeper or stress-critical reservoirs. • Moderate growth is expected from increased completion intensity (lb/ft) and wider adoption of simul-frac techniques, which can raise sand consumption per crew per day. • NWS demand is less sensitive to rig count fluctuations than in the past because wells with longer laterals and more stages still require performance-critical proppant in smaller quantities. Supply Outlook • NWS supply remains constrained by permitting challenges, limited high-quality deposits, and the declining share of key oil plays. • Expansion potential is limited; few deposits can economically supply performance- critical sand in large volumes. • This constrained supply supports stable premium pricing and reinforces NWS as a niche but essential component in completions that demand superior proppant performance. Balance & Pricing • Market conditions are expected to be balanced to slightly oversupplied for in-basin sands, while NWS retains its premium position. • Pricing for NWS should remain stable, with periodic uplifts linked to deeper or higher-stress drilling activity. • Delivered-cost differentials continue to shape procurement, ensuring that NWS maintains a selective but high-value role in completions. Downside Market Risks • Reduced drilling or completion activity in high-spec wells could compress NWS demand. • Improved in-basin proppants that encroach on NWS performance could challenge market share. • Logistical constraints, regulatory hurdles, or environmental compliance issues could impact supply consistency or cost. Upside Market Opportunities • Increases in completion intensity or longer lateral lengths could boost per-well NWS consumption.
10-8 JOHN T. BOYD COMPANY • Renewed demand for high-performance proppants in deeper or more challenging reservoirs could tighten NWS availability. • Supply chain or regional logistical bottlenecks may elevate delivered pricing and improve margins for NWS producers. • Technology adoption in transportation and last-mile delivery could create competitive advantages for integrated NWS suppliers. NWS is unlikely to reclaim historical market share for bulk sand but will remain critical where premium performance is non-negotiable. 10.3.2 Industrial Sand The outlook for industrial sand used in non-frac applications is generally stable, supported by steady demand from construction, glass manufacturing, foundry, filtration, and specialty industrial sectors. Unlike frac sand, industrial sand demand is driven primarily by broader economic indicators such as construction activity, infrastructure investment, and manufacturing output. These sectors tend to exhibit more predictable long-term growth patterns. Demand from the glass manufacturing sector is expected to remain strong, supported by ongoing residential and commercial construction, automotive production, and increasing use of glass in renewable energy applications such as solar panels. Similarly, the foundry industry provides consistent baseline demand tied to industrial production, machinery manufacturing, and automotive markets. Industrial sand used in construction materials and filtration applications is also expected to grow gradually, driven by population growth, urbanization, and continued investment in water infrastructure and environmental treatment systems. These applications provide long-term structural demand with relatively low volatility. Supply conditions for high-purity industrial sand remain favorable for established producers with well-characterized deposits, as high-quality silica resources suitable for industrial applications are geologically limited. Producers with consistent product quality, established processing infrastructure, and access to transportation networks are well positioned to maintain stable market participation. Overall, the non-frac industrial sand market is expected to remain stable with modest long-term growth, supported by diversified end-use markets and ongoing industrial and infrastructure development.
10-9 JOHN T. BOYD COMPANY 10.4 Market Entry Strategies As an existing producer with a lengthy commercial history and established customer base, it is BOYD’s opinion that market entry strategies are not required for continued sale of the Ottawa Mine’s frac sand and industrial sand products. 10.5 Future Sales BOYD’s projections of sales volumes and aggregate sand prices for the Ottawa Mine are informed by Smart Sand’s historical operating results, their budget forecasts, and our knowledge of frac sand and industrial sand markets. Forecasted prices are based on sales of various sizes (e.g., 30/50, 40/70, and 70/140-mesh) of finished frac and industrial sands. Our sand sales forecast for the Ottawa Mine is provided in Table 10.2, below. BOYD is not aware of any material contracts for the sale of frac sand or industrial sand from the Ottawa Mine. Q:\ENG_WP\3555.027 SS - Utica FY25\WP\Report\CH-10 - Market Analysis.docx Frac Industrial Year(s) Sand Sand Total ($/ton) 2026 410 430 840 24.71 2027 431 451 882 24.71 2028 452 474 926 24.71 2029 475 498 973 24.71 2030 499 522 1,021 24.71 2031 499 522 1,021 24.71 2032 499 522 1,021 24.71 2033 499 522 1,021 24.71 2034 499 522 1,021 24.71 2035 499 522 1,021 24.71 2036–2149 56,438 59,152 115,590 24.71 Total 61,200 64,137 125,337 Minimum 24.71 Maximum 24.71 Average 24.71 Table 10.2: Frac Sand and Indutrial Sand Sales Forecast Sales (000 tons) Weighted Average Selling Price
11-1 JOHN T. BOYD COMPANY 11.0 CAPITAL AND OPERATING COSTS 11.1 Basis of Capital and Operating Cost Estimates The production and unit cost estimates for the Ottawa Mine are informed by Smart Sand’s historical performance and internal budget forecasts, in combination with BOYD’s familiarity with mining costs at similar operations. Operating volumes are well-defined and understood, as are mining and processing productivities at the Ottawa operation. As such, it is BOYD’s opinion that the production and financial projections are reasonable for an operating mine and are likely to be within ±20% accuracy level. This section contains forward-looking information related to capital and operating cost estimates for the Ottawa Mine. There are inherent known and unknown risks and uncertainties associated with all mining operations. These risks, uncertainties, and other factors are not quantifiable, but include, and are not limited to, adverse general economic conditions, operating hazards, inherent uncertainties in interpreting engineering and geologic data, fluctuations in commodity prices and prices for operational services, government regulation and political risks, as well as other risks commonly associated with the mining industry. 11.2 Capital Expenditures 11.2.1 Historical Capital Expenditures Historical capital expenditures have consisted primarily of sustaining capital required to maintain production capacity and supporting infrastructure at the Ottawa Mine. Discretionary capital has been limited and generally directed toward incremental improvements, equipment upgrades, and operational optimization initiatives, rather than material expansion or development activities. Capital expenditures at the Ottawa Mine over the last two years are summarized in Table 11.1, below. 2024 2025 Capital Expenditures ($ 000) 122 4,355 Capital Expenditures ($/ton sold) 0.21 7.03 Table 11.1: Historical Capital Expenditures
11-2 JOHN T. BOYD COMPANY Capital expenditures were higher in 2025 primarily due to development of a new mining area, including associated site preparation, infrastructure, and access improvements. This development is expected to support continued extraction of reserves for approximately 80 years, providing long-term operational continuity and sustaining future production capacity. 11.2.2 Projected Capital Expenditures The Ottawa Mine is currently in steady-state production and is not dependent on significant development or expansion capital to maintain planned output levels. Forecast capital expenditures are limited primarily to sustaining capital required to maintain equipment, infrastructure, and production capacity over the life of mine. Other capital expenditures are largely discretionary in nature and relate to optimization, efficiency improvements, or potential expansions. Accordingly, continued operations are not contingent upon material additional capital investment beyond normal sustaining requirements. Projected capital expenditures for the Ottawa Mine over the next five years are summarized in Table 11.2, below. BOYD projected annual sustaining capital expenditures after 2030 at a unit cost of $1.13 per ton sold, this includes maintenance of production equipment as well as other items, for the operation. This factor is based on our judgment and experience with similar operations. 11.3 Operating Costs 11.3.1 Historical Operating Costs Operating costs (i.e., cash production costs) comprise all site-level cash expenditures incurred in the extraction, processing, and production of the finished frac sand products. These costs include mining and processing activities, site-specific general and administrative expenses (including non-income taxes and fees), and ongoing reclamation. 2026 2027 2028 2029 2030 Capital Expenditues ($ 000) 1,150 1,150 1,150 1,150 1,150 Capital Expenditues ($/ton sold) 1.37 1.30 1.24 1.18 1.13 Table 11.2: Forecasted Capital Expenditures
11-3 JOHN T. BOYD COMPANY Cash production costs at the Ottawa Mine over the last two years are summarized in Table 11.3, on the following page. 11.3.2 Projected Operating Costs Future operating cost estimates were developed based on recent actual costs and considering specific operational activity levels and cost drivers. The estimates consider current and expected labor headcount and salaries, major consumables and unit prices, power costs, and equipment and maintenance costs. The total operating cost estimate includes all site costs related to mining, processing, loading, and site-specific general and administrative expenses (including non-income taxes and fees). Excluded from the projected operating costs are allocated corporate selling, general, and administrative (SG&A) expenses. As shown in Table 11.4, on the following page, the Ottawa Mine’s projected operating costs are expected to remain relatively consistent (on an uninflated basis) with 2025 results. As such, the projected total cash production cost over the life of the mine averages $20.94 per ton sold over the life of the mine. As the operation is in a steady state, BOYD considers the future operating cost estimates to be reasonable and appropriate. 2024 2025 2024 2025 Cash Production Costs: Mining 2,553 3,020 4.51 4.88 Production 3,715 4,603 6.56 7.43 Logistics 3,855 4,479 6.81 7.23 Maintenance 758 933 1.34 1.51 Safety 75 93 0.13 0.15 Quality 12 167 0.02 0.27 Environmental 180 105 0.32 0.17 Plant Management 672 541 1.19 0.87 Other 932 (619) 1.65 (1.00) Total 12,751 13,322 22.52 21.51 Note: Totals may not sum due to rounding. Table 11.3: Historical Operating Costs $ 000 $/ton sold
11-4 JOHN T. BOYD COMPANY q:\eng_wp\3555.027 ss - utica fy25\wp\report\ch-11 - capital and operating costs.docx 2026 2027 2028 2029 2030 Cash Production Costs ($ 000): Mining 3,395 3,608 3,833 4,068 4,316 Production 4,697 4,993 5,304 5,630 5,972 Logistics 5,247 5,578 5,924 6,289 6,671 Maintenance 1,161 1,234 1,310 1,391 1,476 Safety 105 112 119 126 134 Quality 181 192 204 217 230 Environmental 140 149 159 168 179 Plant Management 567 603 641 680 721 Other 1,334 1,418 1,506 1,599 1,696 Total 16,828 17,887 19,000 20,168 21,394 Cash Production Costs ($/ton sold): Mining 4.04 4.09 4.14 4.18 4.23 Production 5.59 5.66 5.73 5.79 5.85 Logistics 6.25 6.32 6.40 6.47 6.53 Maintenance 1.38 1.40 1.41 1.43 1.44 Safety 0.13 0.13 0.13 0.13 0.13 Quality 0.22 0.22 0.22 0.22 0.23 Environmental 0.17 0.17 0.17 0.17 0.17 Plant Management 0.68 0.68 0.69 0.70 0.71 Other 1.59 1.61 1.63 1.64 1.66 Total 20.03 20.28 20.51 20.74 20.95 Note: Totals may not sum due to rounding. Table 11.4: Forecasted Operating Costs
12-1 JOHN T. BOYD COMPANY 12.0 ECONOMIC ANALYSIS 12.1 Approach The economic analysis presented in this chapter was prepared by BOYD for the purpose of confirming the commercial viability of the Ottawa Mine’s reported frac sand reserves and not for the purpose of valuing the Ottawa operation, or its assets. The economic analysis contains forward-looking information related to the projected operating and financial performance of the Ottawa Mine. This projection involves inherent known and unknown risks and uncertainties, some of which may be outside of Smart Sand’s control. Smart Sand, as with all mining companies, actively evaluates, changes, and modifies business and operating plans in response to various factors that may affect operational and/or financial results. Actual results, production levels, operating expenses, sales realizations, and all other modifying factors could vary significantly from the assumptions and estimates provided in this analysis. Risk is subjective, as such, BOYD recommends that each reader should evaluate the project based on their own investment criteria. The financial model used for the purposes of the economic analysis forecasts future free cash flow from frac sand production and sales over the life cycle of the Ottawa Mine using the annual forecasts of production, sales revenues, and operating and capital costs discussed earlier in this report. A DCF analysis, in which future free cash flows are discounted to present value, is used to derive an NPV for the frac sand reserves. The use of DCF-NPV analysis is a standard method within the mining industry to assess the economic value of a project after allowing for the cost of capital invested. The financial evaluation of the Ottawa Mine has been undertaken on a simplified after-tax basis and does not reflect Smart Sand’s corporate tax structure. NPV is calculated using an after-tax discount rate of 12% (NPV12). Cash flows were assumed to occur in the middle of each year and are discounted to January 1, 2026. Cost estimates and other inputs to the cash flow model for the project have been prepared using constant 2025 money terms, i.e., without provision for inflation. The internal rate of return and project payback were not calculated, as there was no initial investment (sunk costs) considered in the financial model provided herein. A suite of sensitivities was calculated to evaluate the effect of the main drivers of economic performance, including variations in sales prices, operating costs, and capital costs.
12-2 JOHN T. BOYD COMPANY 12.2 Assumptions and Limitations Cash flow projections for the Ottawa Mine have been generated from the annual forecasts of production, sales revenues, and operating and capital costs discussed earlier in this report. A summary of the key assumptions and limitations is provided below: • Sales volumes of finished frac sand through 2030 are based on Smart Sand’s budget projections and are expected to remain constant thereafter. Forecasted sales volumes are at or below the capacity of the Ottawa processing facilities (approximately 1.6 million tons of finished frac sand per year). • ROM production requirements are based on an expected processing yield of 77.7% and will remain in line with expected sales volumes. Forecasted ROM production is at or below the capacity of the existing mining equipment and related infrastructure. • Forecasted revenues are based on projected sales of various sizes (e.g., 20/40, 30/50, 40/70, and 70/140-mesh) of finished frac and industrial sand with a weighted average mine gate sales price of $24.71 per ton in 2026, and remain relatively constant over the remaining life of the reserves. Additional transportation and delivery costs are assumed to be incurred by the customer or added as a pass- through to the mine gate price. Market specifications and forecasted sales prices for Smart Sand’s finished sand from the Ottawa Mine are provided in Chapter 10. • Projected operating costs are discussed in Chapter 11 and include all site costs related to mining, processing, loading, and general and administrative expenses (including non-income taxes, fees, and royalties). Unit operating costs are expected to remain relatively constant over the life of the operation. • Projected capital expenditures are discussed in Chapter 11 and include sustaining/maintenance of operations costs. Unit capital expenditures are expected to remain relatively constant over the life of the operation. • No allowance for changes in or the recapture of working capital has been made in the financial analysis as the Ottawa Mine business unit is a going concern. Exclusion of working capital from the financial analysis does not have a material impact on the NPV calculation. • Depreciation and amortization expenses through 2030 are based on Smart Sand’s budget projections and are expected to remain constant thereafter. • Allocation of corporate SG&A expenses is based on the Ottawa Mine’s relative share of Smart Sand’s operating performance. • Income taxes are based on: − Federal Business Income Tax rate of 21%. − Illinois Corporate Income and Replacement Tax rate of 9.5%. • Asset recovery/salvage values were not included in the valuation. • Post-mining reclamation costs were not included in the valuation.
12-3 JOHN T. BOYD COMPANY Based on the information available at the time of our analysis, it is BOYD’s opinion that the production and financial projections provided herein are reasonable and are accurate to within ±20%. 12.3 Financial Model Results Table 12.1, below, provides a summary of the estimated remaining life of reserves financial results for the Ottawa Mine. Estimated LOM pre-tax and after-tax cash flows for frac sand production from the Ottawa Mine are presented in Table 12.2, on the following page. Units Remaining Life of Mine Total Expected Remaining Life years 124 Production: ROM Production 000 tons 161,426 Product Sales 000 tons 125,337 Total Revenues $ millions 3,098.1 Average Selling Price $/t sold 24.71 Total Cash Production Costs $ millions 2,624.4 Average Cash Production Cost $/t sold 20.94 Capital Expenditures $ millions 141.7 Average Capital Expenditures $/t sold 1.13 Pre-Tax: Cash Flow $ millions 144.3 NPV ₁₂ $ millions 9.6 After-tax: Cash Flow $ millions 144.3 NPV ₁₂ $ millions 9.6 Table 12.1: Financial Results
12-4 JO H N T. B O Y D C O M PA N Y Description Units 2026 2027 2028 2029 2030 Total Production Statistics: ROM Production 000 tons 1,081 1,136 1,192 1,253 1,315 6,575 13,150 13,150 122,574 161,426 Process Yield % 77.7 77.7 77.7 77.7 77.7 77.6 77.6 77.6 77.6 77.6 Product Sales 000 tons 840 882 926 973 1,021 5,105 10,210 10,210 95,170 125,337 Sand Revenue $ 000 20,763 21,801 22,891 24,035 25,237 126,185 252,370 252,370 2,352,405 3,098,057 Average Selling Price $/ton sold 24.71 24.71 24.71 24.71 24.71 24.71 24.71 24.71 24.71 24.71 Cash Production Costs $ 000 16,827 17,886 19,001 20,168 21,395 106,975 213,950 213,950 1,994,282 2,624,434 Average Cash Production Costs $/ton sold 20.03 20.28 20.52 20.73 20.95 20.95 20.95 20.95 20.95 20.94 Contribution Margin $ 000 3,936 3,915 3,890 3,867 3,842 19,210 38,420 38,420 358,123 473,623 SG&A Allocation $ 000 1,980 1,862 1,745 1,628 1,513 7,565 15,130 15,130 141,031 187,584 Royalties $ 000 - - - - - EBITDA $ 000 1,956 2,053 2,145 2,239 2,329 11,645 23,290 23,290 217,092 286,039 DDA $ 000 4,359 4,359 4,359 4,359 4,359 21,795 43,590 43,590 406,313 537,083 Operating Income (EBIT) $ 000 (2,403) (2,306) (2,214) (2,120) (2,030) (10,150) (20,300) (20,300) (189,221) (251,044) Taxes $ 000 - - - - - - - - - - EBIAT $ 000 (2,403) (2,306) (2,214) (2,120) (2,030) (10,150) (20,300) (20,300) (189,221) (251,044) Capital Expenditures $ 000 1,150 1,150 1,150 1,150 1,150 5,750 11,500 11,500 107,194 141,694 Net Income $ 000 (3,553) (3,456) (3,364) (3,270) (3,180) (15,900) (31,800) (31,800) (296,416) (392,739) Pre-tax Cash Flow $ 000 806 903 995 1,089 1,179 5,895 11,790 11,790 109,898 144,345 Discounted at 12% $ 000 762 762 750 732 708 2,552 2,270 731 347 9,613 After-tax Cash Flow $ 000 806 903 995 1,089 1,179 5,895 11,790 11,790 109,898 144,345 Discounted at 12% $ 000 762 762 750 732 708 2,552 2,270 731 347 9,613 SMART SAND, INC. By 2031 to 2035 2036 to 2045 2046 to 2055 Table 12.2 ANNUAL PRODUCTION AND CASH FLOW FORECAST OTTAWA MINE Prepared For John T. Boyd Company Mining and Geological Consultants February 2026 2056 to 2149
12-5 JOHN T. BOYD COMPANY No income tax expense is reflected in the financial model, as projected taxable income remains negative throughout the evaluation period. This is primarily attributable to depreciation and amortization expenses exceeding operating income, resulting in no projected tax liability despite the generation of positive cash flows. DCF-NPV on a pre-tax and after-tax basis, using discount rates of 8%, 10%, 12% (the base case), and 15% were calculated utilizing the projected cash flows. Table 12.3 summarizes the results of the pre-tax and after-tax DCF-NPV analyses: As shown, the pre-tax DCF-NPV ranges from approximately $7.7 million to $14.5 million. The after-tax DCF-NPV ranges from approximately $7.7 million to $14.5 million. The economic analysis confirms that the Ottawa Mine generates positive pre- and after-tax financial results and a real NPV12 of $9.6 million. As such, it is BOYD’s opinion that the Ottawa Mine’s frac sand reserves have demonstrated economic viability. 12.4 Sensitivity Analysis Table 12.4, below, shows the sensitivity of the project after-tax for a cash flow discounted at 12% (NPV12) to a variation over a range of 20% above and below the base case in: (1) average selling prices and (2) cash production costs. 8% 10% 12% 15% Pre-Tax 14.5 11.6 9.6 7.7 After-Tax 14.5 11.6 9.6 7.7 Table 12.3: DCF-NPV Analysis NPV ($ millions) -20% -15% -10% -5% 0% 5% 10% 15% 20% -20% 2.8 13.4 24.1 32.7 40.2 47.6 55.0 62.4 69.8 -15% -6.1 4.5 15.1 25.8 34.0 41.3 48.7 56.1 63.5 -10% -15.1 -4.4 6.2 16.8 27.3 35.1 42.5 49.9 57.3 -5% -24.0 -13.4 -2.7 7.9 18.6 28.7 36.3 43.7 51.1 0% -33.0 -22.3 -11.7 -1.0 9.6 20.3 30.0 37.5 44.9 5% -41.9 -31.3 -20.6 -10.0 0.7 11.3 22.0 31.3 38.7 10% -50.8 -40.2 -29.6 -18.9 -8.3 2.4 13.0 23.7 32.5 15% -59.8 -49.1 -38.5 -27.8 -17.2 -6.6 4.1 14.7 25.4 20% -68.7 -58.1 -47.4 -36.8 -26.1 -15.5 -4.9 5.8 16.4 C as h P ro du ct io n C os ts Table 12.4: After-Tax NPV12 Sensitivity Analysis ($ millions) Revenues
12-6 JOHN T. BOYD COMPANY As expected, the project is most sensitive to changes in product pricing and production costs. Under the current financial and operating assumptions, the Ottawa Mine’s economic performance is relatively sensitive to small changes in key inputs (e.g., commodity prices, operating costs). The project is less sensitive to capital costs. There is little to no impact varying the capital costs from 70% to 130% of the base case. Smart Sand has a demonstrated operating history through varying demand cycles in its end-use markets. During periods of reduced demand or pricing pressure, Smart Sand may moderate production levels, prioritize higher-margin product specifications, defer non-essential capital expenditures, and implement cost-control measures at the Ottawa Mine. Conversely, during periods of stronger downstream demand, the operation has the capacity to increase throughput within existing infrastructure constraints to enhance operating margins. Such operational adjustments are expected to remain within the parameters of the life- of-mine plan and do not materially impact the economic viability of the frac sand reserves as estimated using the long-term pricing assumptions adopted herein. q:\eng_wp\3555.027 ss - utica fy25\wp\report\ch-12 - economic analysis.docx
13-1 JOHN T. BOYD COMPANY 13.0 PERMITTING AND COMPLIANCE 13.1 Permitting Requirements and Status Several permits, and compliance with federal, state, and municipal regulations are required for mining, processing, and related activities at the Ottawa Mine. The Illinois Department of Natural Resources (IDNR) requires a Surface Mining Permit for all operations that affect over 10 acres per year by mining, or removing more than 10 ft of overburden (soil overlying the rock or mineral being extracted). A Surface Mining Permit application requires the operator to submit an operating plan that illustrates how the land will be affected by mining operations as well as a reclamation plan that describes how the mined land will be restored for future use. The mine reclamation plan must be submitted for review to the LaSalle County Board. If the County Board requests, a public hearing will be scheduled by the IDNR to receive comments on the proposed reclamation plan. The Ottawa operation has a current IDNR permit. Additional permitting is regulated by Illinois state governmental agencies—The Illinois Environmental Protection Agency (IEPA) or the IDNR. Permitting requirements include various Air Permits and Storm Water Management permits. Land Use Permits and Special Use Permits are in place for the City of LaSalle for zoning and the mining and processing of material. A summary of the permits for the Ottawa Mine is provided in Table 13.1, below. BOYD reviewed the permits necessary to support continued operations at the Ottawa Mine, with the required permits appearing to be valid and in good standing. The approved permits and certifications are adequate for the continued operation of the mine and processing facilities. New permits, permit revisions, and/or renewals may be necessary from time to time to facilitate future operations. Given sufficient time and planning, Smart Sand should be able to secure new permits, as required, to maintain its planned operations within the context of current regulations.
13-2 JOHN T. BOYD COMPANY 13.2 Environmental Studies It is BOYD’s understanding that various studies related to environmental impacts and air quality monitoring have been completed for the Ottawa Mine. As part of the state and federal permitting process, various environmental assessments have been conducted and reviewed by the relevant local, state, and federal agencies. As the necessary permits for mining and processing operations have been issued, it is BOYD’s understanding that all environmental assessments have been accepted by the relevant regulatory bodies, and no material issues were found. 13.3 Waste Disposal and Water Management The coarse refuse generated from the sand processing operations is stockpiled and used in the construction of impoundments or backfilled into dredge ponds or previously mined pits. The fine refuse generated from the sand processing operations is disposed of by pumping it into dredge or impoundment ponds. Waste disposal facilities are in place for current mining operations, with plans to expand the disposal facilities to meet life of mine storage requirements. Please refer to Section 9.4 for a detailed description of these facilities. Water control structures are in place and function as required by regulatory agencies. 13.4 Compliance Mine safety is regulated by the federal government by MSHA, as are all mining operations. MSHA inspects the facilities, at a minimum of twice a year. Smart Sand’s safety record compares favorably with its regional peers. Based on our review of information provided by Smart Sand and available public information, it is BOYD’s opinion that the Ottawa Sand Mine’s record of compliance with applicable mining, water quality, and environmental regulations is generally typical for that of the industry. BOYD is not aware of any regulatory violation or compliance issue which would materially impact the frac sand reserve estimate. 13.5 Plans, Negotiations, or Agreements New permits and certain permit amendments/revisions require public notification. The public is made aware of pending permits by advertisement in local newspapers. Additionally, a copy of the application is retained at the local county’s public library for
13-3 JOHN T. BOYD COMPANY review. A comment period follows the last advertisement date to allow the public to submit comments to the regulatory authority. BOYD is not aware of any community or stakeholder concerns, impacts, negotiations, or agreements that would materially impact the estimated frac sand reserves. 13.6 Post-Mining Land Use and Reclamation Under current regulations in Illinois, the IDNR Land Reclamation division, part of the Department of Mines and Minerals, governs surface mining reclamation under the Surface-Mined Land Conservation and Reclamation Act of 1971. IDNR outlines requirements to ensure proper reclamation of post-mined lands to meet conditions that are suitable for productive future land use while minimizing environmental impacts. Reclamation requirements are generally to be met within a period of three years after active use. Local ordinances for non-metallic mining reclamation plans are also enforced by each county, or incorporated areas within a county, that ensure non-metallic mining operations are reclaimed to meet standardized reclamation requirements, ground stabilization, revegetation, surface water management, groundwater quality, development and restoration of natural habitats, and the removal of refuse. As a matter of good mining practice, Smart Sand acts to conduct progressive reclamation throughout the operation’s mining life to minimize risk and costs at closure. Mine site reclamation costs are included in the capital and operating costs discussed in Chapter 11 and included in the economic analysis presented in Chapter 12. 13.7 Local Procurement and Hiring BOYD is not aware of any commitments for local procurement or hiring. Smart Sand reports making efforts to source supplies and materials from regional vendors. The workforce is likewise located in the regional area. Smart Sand’s stated core values include making positive impacts in the communities in which it operates. In addition to the payment of income taxes and other local community taxes such as property taxes and royalties, Smart Sand supports, financially and otherwise, local community endeavors. q:\eng_wp\3555.027 ss - utica fy25\wp\report\ch-13 - permitting and compliance.docx
14-1 JOHN T. BOYD COMPANY 14.0 INTERPRETATION AND CONCLUSIONS 14.1 Findings BOYD’s independent technical assessment was conducted in accordance with S-K 1300 and concludes: • Sufficient data have been obtained through the site exploration and sampling programs and mining operations to support the geological interpretations of the sand deposit underlying the Ottawa property. The data are of sufficient quantity and reliability to reasonably support the sand resource and sand reserve estimates presented in this report. • BOYD is of the opinion that our data validation efforts: (1) adequately confirm the reasonableness of the geologic interpretations, resource estimation criteria, and economic assumptions; and (2) support the use of the data in frac sand resource/reserve estimation. • The 125.3 million product tons of frac sand reserves (as of December 31, 2025) identified on the property are reasonably and appropriately supported by technical studies, which consider expected geologic conditions, planned mining and processing operations, forecasted product revenues, and operating and capital cost estimates. As such, BOYD is of the opinion that there are reasonable expectations that the stated frac sand reserves for the Ottawa Mine are technically, economically, and legally extractable as of December 31, 2025. • To our knowledge, there is no other relevant data or information considered material to the Ottawa Mine that would impact or change this TRS. 14.2 Significant Risks and Uncertainties The ability of Smart Sand, or any mining company, to achieve production and financial projections is dependent on numerous factors. These factors primarily include site-specific geological conditions, the capabilities of management and operational personnel, product sales prices and market conditions, environmental issues, securing permit renewals and bonds, and developing and operating mines in a safe and efficient manner. Unforeseen changes in legislation and new industry developments could substantially alter the performance of any mining company. It is our understanding that Smart Sand continuously assesses these factors and adjusts operating plans as a matter of course. As a mining operation with an established history of commercial success, there is a high degree of certainty for the Ottawa Mine under the current and foreseeable operating
14-2 JOHN T. BOYD COMPANY environment. However, it should be noted that frac sand is generally marketed exclusively to the energy sector which has historically faced more volatility than many other industries. Subject specific assessments of risk are presented in the relevant sections of this report. 14.3 Recommendations Based on the current status of the Ottawa Mine, BOYD has no recommendations for additional work relevant to the subject frac sand reserves at this time. q:\eng_wp\3555.027 ss - utica fy25\wp\report\ch-14 - conclusions.docx
TECHNICAL REPORT SUMMARY FRAC SAND RESOURCES AND RESERVES BLAIR MINE Jackson and Trempealeau Counties, Wisconsin Prepared For SMART SAND, INC. Yardley, Pennsylvania By John T. Boyd Company Mining and Geological Consultants Pittsburgh, Pennsylvania, USA Report No. 3555.028 FEBRUARY 2026
John T. Boyd Company Mining and Geological Consultants February 23, 2026 File: 3555.028 Smart Sand, Inc. 1000 Floral Vale Blvd., Ste 225 Yardley, PA 19067 Attention: Mr. Christopher Green Vice President of Accounting and Principal Accounting Officer Subject: Technical Report Summary Frac Sand Resources and Reserves Blair Mine Jackson and Trempealeau Counties, Wisconsin Ladies and Gentlemen: The John T. Boyd Company (BOYD) was retained by Smart Sand, Inc. (Smart Sand) to independently prepare estimates of mineral resources and mineral reserves— hereafter referred to as frac sand resources and frac sand reserves, respectively—for the Blair Mine (or “Blair”) as of December 31, 2025. This Technical Report Summary (TRS) has been prepared to support Smart Sand’s disclosure of the subject frac sand resources and frac sand reserves in accordance with Subpart 1300 and Item 601(b)(96) of Regulation S-K (collectively, “S-K 1300”) as adopted by the U.S. Securities and Exchange Commission’s (SEC) on October 31, 2018. Respectfully submitted, JOHN T. BOYD COMPANY By: Ronald L. Lewis Managing Director and COO Q:\ENG_WP\3555.028 SS - Blair FY25\WP\Report\Cover Letter.docx Chairman James W. Boyd President John T. Boyd II CEO Carlos F. Barrera Managing Director and COO Ronald L. Lewis Vice Presidents Robert J. Farmer Jisheng (Jason) Han John L. Weiss Michael F. Wick William P. Wolf Managing Director - Australia Jacques G. Steenekamp Managing Director - China Rongjie (Jeff) Li Managing Director – South America Carlos F. Barrera Pittsburgh 4000 Town Center Boulevard, Suite 300 Canonsburg, PA 15317 (724) 873-4400 (724) 873-4401 Fax jtboydp@jtboyd.com Denver (303) 293-8988 jtboydd@jtboyd.com Brisbane 61 7 3232-5000 jtboydau@jtboyd.com Beijing 86 10 6500-5854 jtboydcn@jtboyd.com Bogota +57-3115382113 jtboydcol@jtboyd.com www.jtboyd.com
JOHN T. BOYD COMPANY TABLE OF CONTENTS Page LETTER OF TRANSMITTAL TABLE OF CONTENTS GLOSSARY AND ABBREVIATIONS 1.0 EXECUTIVE SUMMARY ............................................................................. 1-1 1.1 Introduction ....................................................................................... 1-1 1.2 Property Description and Location ................................................... 1-2 1.3 Geology ............................................................................................. 1-2 1.4 Exploration ........................................................................................ 1-4 1.5 Frac Sand Reserves ......................................................................... 1-5 1.6 Operations ......................................................................................... 1-6 1.6.1 Mining .................................................................................... 1-6 1.6.2 Processing ............................................................................ 1-7 1.6.3 Infrastructure ......................................................................... 1-7 1.7 Financial Analysis ............................................................................. 1-7 1.7.1 Market Analysis ..................................................................... 1-7 1.7.2 Capital and Operating Costs ................................................. 1-8 1.7.3 Economic Analysis ................................................................. 1-9 1.8 Regulations and Liabilities ................................................................ 1-9 1.9 Conclusions ..................................................................................... 1-10 2.0 INTRODUCTION .......................................................................................... 2-1 2.1 Registrant .......................................................................................... 2-1 2.2 Purpose and Terms of Reference .................................................... 2-1 2.3 Expert Qualifications ......................................................................... 2-2 2.4 Principal Sources of Information ....................................................... 2-3 2.4.1 Personal Inspections ............................................................ 2-4 2.4.2 Reliance on Information Provided by the Registrant ............ 2-4 2.4.3 Verification of Information ..................................................... 2-4 2.4.4 Other Relevant Data and Information ................................... 2-5 2.5 Report Version .................................................................................. 2-5 2.6 Units of Measure ............................................................................... 2-5
TABLE OF CONTENTS - Continued Page JOHN T. BOYD COMPANY 3.0 PROPERTY OVERVIEW ............................................................................. 3-1 3.1 Description and Location .................................................................. 3-1 3.2 History ............................................................................................... 3-1 3.3 Property Control ................................................................................ 3-2 3.4 Adjacent Properties ........................................................................... 3-2 3.5 Regulation and Liabilities .................................................................. 3-2 3.6 Accessibility, Local Resources, and Infrastructure .......................... 3-3 3.7 Physiography .................................................................................... 3-3 3.8 Climate .............................................................................................. 3-4 4.0 GEOLOGY .................................................................................................... 4-1 4.1 Regional Geology ............................................................................. 4-1 4.2 Property Geology .............................................................................. 4-2 4.2.1 General Stratigraphy ............................................................. 4-2 4.2.2 Structural Geology ................................................................ 4-3 4.3 Frac Sand Geology ........................................................................... 4-3 5.0 EXPLORATION, SAMPLING, AND TESTING .......................................... 5-1 5.1 Background ....................................................................................... 5-1 5.2 Exploration Procedures .................................................................... 5-1 5.2.1 Drilling and Sampling ............................................................ 5-1 5.2.2 2012 Air Rotary Exploration Campaign ................................. 5-1 5.2.3 2014 Rotosonic Exploration Campagin ................................. 5-2 5.2.4 Frac Sand Testing .................................................................. 5-3 5.2.5 Other Exploration Methods .................................................... 5-4 5.3 Laboratory Testing Results ................................................................ 5-4 5.3.1 Grain Size Distribution ........................................................... 5-4 5.3.2 Grain Shape (Sphericity and Roundness) ............................ 5-5 5.3.3 Acid Solubility ........................................................................ 5-5 5.3.4 Turbidity ................................................................................ 5-5 5.3.5 Crush Resistance .................................................................. 5-5 5.3.6 Quality Summary ................................................................... 5-5 5.4 Data Verification ................................................................................ 5-6
TABLE OF CONTENTS - Continued Page JOHN T. BOYD COMPANY 6.0 FRAC SAND RESOURCES AND RESERVES ....................................... 6-1 6.1 Applicable Standards and Definitions ............................................... 6-1 6.2 Frac Sand Resources ....................................................................... 6-2 6.2.1 Methodology .......................................................................... 6-2 6.2.2 Classification ......................................................................... 6-4 6.2.3 Estimation Criteria ................................................................. 6-5 6.2.4 Frac Sand Resource Estimate .............................................. 6-6 6.2.5 Validation .............................................................................. 6-6 6.3 Frac Sand Reserves ......................................................................... 6-6 6.3.1 Methodology .......................................................................... 6-6 6.3.2 Classification ......................................................................... 6-7 6.3.3 Frac Sand Reserve Estimate ................................................ 6-9 6.3.4 Significant Risks and Uncertainties .................................... 6-10 6.3.5 Reconciliation with Previous Estimates .............................. 6-10 7.0 MINING OPERATIONS .............................................................................. 7-1 7.1 Mining Method .................................................................................. 7-1 7.2 Mine Schedule, Equipment, and Staffing ......................................... 7-2 7.3 Engineering and Planning ................................................................. 7-3 7.4 Mining Sequence and Production .................................................... 7-3 7.5 Mining Risks ...................................................................................... 7-4 8.0 PROCESSING OPERATIONS ................................................................... 8-1 8.1 Processing Method ........................................................................... 8-1 8.1.1 Wet Plant ............................................................................. 8-1 8.1.2 Decant/Dry Plant .................................................................. 8-2 8.1.3 Storage and Loadout ............................................................ 8-2 8.2 Production ......................................................................................... 8-3 8.3 Processing Risks .............................................................................. 8-3 9.0 MINE INFRASTRUCTURE .......................................................................... 9-1 9.1 Overview ........................................................................................... 9-1 9.2 Transportation ................................................................................... 9-1 9.3 Utilities ............................................................................................... 9-1 9.4 Tailings Disposal ............................................................................... 9-2 9.5 Other Structures and Facilities ........................................................ 9-2 10.0 MARKET ANALYSIS ................................................................................ 10-1 10.1 Market Background ......................................................................... 10-1 10.2 Historical Sales ............................................................................... 10-3 10.3 Market Outlook ................................................................................ 10-5 10.4 Market Entry Strategies .................................................................. 10-6 10.5 Future Sales .................................................................................... 10-6
TABLE OF CONTENTS - Continued Page JOHN T. BOYD COMPANY 11.0 CAPITAL AND OPERATING COSTS ..................................................... 11-1 11.1 Basis of Capital and Operating Cost Estimates ............................. 11-1 11.2 Capital Expenditures ....................................................................... 11-1 11.2.1 Historical Capital Expenditures .......................................... 11-1 11.2.2 Projected Capital Expenditures ........................................... 11-2 11.3 Operating Costs .............................................................................. 11-2 11.3.1 Historical Operating Costs ................................................... 11-2 11.3.2 Projected Operating Costs .................................................. 11-3 12.0 ECONOMIC ANALYSIS ........................................................................... 12-1 12.1 Approach ......................................................................................... 12-1 12.2 Assumptions and Limitations .......................................................... 12-2 12.3 Financial Model Results ................................................................... 12-3 12.4 Sensitivity Analysis ......................................................................... 12-5 13.0 PERMITTING AND COMPLIANCE ......................................................... 13-1 13.1 Permitting Requirements and Status .............................................. 13-1 13.2 Environmental Studies .................................................................... 13-2 13.3 Waste Disposal and Water Management ....................................... 13-2 13.4 Compliance ..................................................................................... 13-2 13.5 Plans, Negotiations, or Agreements ............................................... 13-2 13.6 Post-Mining Land Use and Reclamation ........................................ 13-3 13.7 Local Procurement and Hiring ........................................................ 13-3 14.0 INTERPRETATION AND CONCLUSIONS ............................................. 14-1 14.1 Findings ........................................................................................... 14-1 14.2 Significant Risks and Uncertainties ................................................ 14-1 14.3 Recommendations .......................................................................... 14-2
TABLE OF CONTENTS - Continued Page JOHN T. BOYD COMPANY List of Tables 1.1 Blair Mine Exploration Drilling Summary ...................................................... 1-4 1.2 Blair Mine Frac Sand Reserves as of December 31, 2025 .......................... 1-5 1.3 Summary of Select API/ISO Test Results and Associated Recommended Specifications ....................................................................... 1-6 5.1 Blair Mine Exploration Drilling Summary ....................................................... 5-1 5.2 Product Size Distribution (%) By Elevation .................................................. 5-4 5.3 Summary of Select API/ISO Test Results and Associated Recommended Specifications ....................................................................... 5-6 6.1 Blair Property Drill Hole Spacing Parameters .............................................. 6-4 6.2 Blair Mine Frac Sand Reserves as of December 31, 2025 .......................... 6-9 10.1 Historical Sales Data .................................................................................. 10-3 10.2 Frac Sand Sales Forecast .......................................................................... 10-7 11.1 Historical Capital Expenditures ................................................................... 11-1 11.2 Forecasted Capital Expenditures ............................................................... 11-2 11.3 Historical Operating Costs .......................................................................... 11-3 11.4 Forecasted Operating Costs ....................................................................... 11-4 12.1 Financial Results ......................................................................................... 12-3 12.2 Annual Production and Cash Flow Forecast ............................................... 12-4 12.3 DCF-NPV Analysis ...................................................................................... 12-5 12.4 After-Tax NPV12 Sensitivity Analysis ($ millions) ........................................ 12-5 13.1 Blair Mine Permit Summary ......................................................................... 13-1
TABLE OF CONTENTS - Continued Page JOHN T. BOYD COMPANY List of Figures 1.1 General Location Map .................................................................................. 1-3 4.1 Generalized Stratigraphic Chart, Jackson and Trempealeau Counties, Wisconsin ....................................................................................................... 4-2 4.2 Cross Section A-A’ ......................................................................................... 4-4 6.1 Relationship Between Frac Sand Resources and Frac Sand Reserves ..... 6-2 6.2 Proven and Probable Reserves ..................................................................... 6-8 6.3 Reconciliation with Previous Frac Sand Reserve Estimate ........................ 6-11 7.1 Mined Area at Blair Mine ............................................................................... 7-2 8.1 Blair West Processing Plant .......................................................................... 8-2 8.2 Rail Loadout and Silos ................................................................................... 8-3 10.1 Frac Sand Sales by Mesh Size ................................................................... 10-4 10.2 Frac Sand Sales by Basin/Play ................................................................... 10-4 q:\eng_wp\3555.028 ss - blair fy25\wp\report\toc.doc
1 JOHN T. BOYD COMPANY GLOSSARY OF ABBREVIATIONS AND DEFINITIONS 000 : Thousand(s) $ : US dollar(s) AMSL : Above mean sea-level API : American Petroleum Institute API/ISO : API RP 19C/ISO 13503-2, Measurement of Properties of Proppants Used in Hydraulic Fracturing and Gravel-packing Operations BOYD : John T. Boyd Company CN : Canadian National Railway Constant Dollar : A monetary measure that is not influenced by inflation and used to compare time periods. Sometimes referred to as “real dollars”. DCF : Discounted Cash Flow DDA : Depreciation, depletion, and amortization expenses Discount Rate : A rate of return used to discount future cash flows based on the return investors expect to receive from their investment. EBIT : Earnings before interest and taxes EBIAT : Earnings before interest after taxes EBITDA : Earnings before interest, taxes, depreciation, and amortization E&P : Exploration and production EUR : Estimated ultimate recovery – the forecast cumulative quantity of hydrocarbons that can be economically produced from a well, reservoir, or field over its productive lifetime. Frac Sand : Frac sand is a naturally occurring, high silica content quartz sand, with grains that are generally well rounded and exhibit high compressive strength characteristics relative to other silica sand. It is utilized as a prop or “proppant” in unconventional shale frac well completions. Frac Sand Resource : A Frac Sand Resource is a concentration or occurrence of sand material of economic interest in or on the Earth’s crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A Frac Sand Resource is a reasonable estimate of mineralization, taking into account relevant factors such as quality specifications, likely mining dimensions, location or continuity, that, with the assumed and justifiable
2 GLOSSARY OF ABBREVIATIONS AND DEFINITIONS - Continued JOHN T. BOYD COMPANY technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled. Frac Sand Reserve : A Frac Sand Reserve is an estimate of tonnage and grade or quality of Frac Sand Resource that, in the opinion of the qualified person, can be the basis of an economically viable project. More specifically, it is the economically mineable part of a Frac Sand Resource, which includes diluting materials and allowances for losses that may occur when the material is mined or extracted. ft : Feet – a unit of linear measurement equal to 12 inches or 0.3048 meters. Indicated Frac Sand Resource : An Indicated Frac Sand Resource is that part of a Frac Sand Resource for which quantity, grade or quality, densities, shape, and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing, and is sufficient to assume geological and grade or quality continuity between points of observation. An Indicated Frac Sand Resource has a lower level of confidence than that applying to a Measured Frac Sand Resource and may only be converted to a Probable Frac Sand Reserve. Inferred Frac Sand Resource : That part of a Frac Sand Resource for which quantity and quality are estimated based on limited geological evidence and sampling. The level of geological uncertainty associated with an Inferred Frac Sand Resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. Because an Inferred Frac Sand Resource has the lowest level of geological confidence of all Frac Sand Resources, which prevents the application of the modifying factors in a manner useful for evaluation of economic viability, an Inferred Frac Sand Resource may not be considered when assessing the economic viability of a mining project, and may not be converted to a Frac Sand Reserve. IRR : Internal rate-of-return ISO : International Organization for Standardization lb : Pound LOM : Life-of-Mine Measured Frac : A Measured Frac Sand Resource is that part of a Frac Sand
3 GLOSSARY OF ABBREVIATIONS AND DEFINITIONS - Continued JOHN T. BOYD COMPANY Sand Resource Resource for which quantity, grade or quality, densities, shape, and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine planning and final evaluation of the economic viability of the deposit. Geological evidence is derived from detailed and reliable exploration, sampling, and testing and is sufficient to confirm geological and grade or quality continuity between points of observation. A Measured Frac Sand Resource has a higher level of confidence than that applying to either an Indicated Frac Sand Resource or an Inferred Frac Sand Resource. It may be converted to a Proven Frac Sand Reserve or to a Probable Frac Sand Reserve. Mesh : A measurement of particle size often used in determining the size distribution of granular material. In the U.S., standard mesh (or sieve) size is defined as the number of openings in one square inch of a screen. For example, a 36-mesh screen will have 36 openings while a 150-mesh screen will have 150 openings. Since the size of the screen (one square inch) is constant, the higher the mesh number the smaller the screen opening and the smaller the particle that will pass through. The following table provides mesh dimensions which are commonly referenced in frac sand specifications: Mine-gate : The location at which finished product leaves the mine or processing facility, with all mining and processing complete, but prior to transportation or delivery beyond the mine site. With regards to pricing, “mine-gate price” refers to the sales price of finished product at the point of shipment from the mine or processing facility, excluding transportation, storage, handling, and other downstream logistics costs incurred beyond the mine site. Mineral Reserve : See “Frac Sand Reserve” Mesh inches mm microns 20 0.0331 0.850 850 30 0.0232 0.600 600 35 0.0197 0.500 500 40 0.0165 0.425 425 50 0.0117 0.300 300 70 0.0083 0.212 212 100 0.0059 0.180 180 140 0.0041 0.105 105 200 0.0029 0.075 75 Opening Size
4 GLOSSARY OF ABBREVIATIONS AND DEFINITIONS - Continued JOHN T. BOYD COMPANY Mineral Resource : See “Frac Sand Resource” Modifying Factors : The factors that a qualified person must apply to Indicated and Measured Frac Sand Resources and then evaluate to establish the economic viability of Frac Sand Reserves. A qualified person must apply and evaluate modifying factors to convert Measured and Indicated Frac Sand Resources to Proven and Probable Frac Sand Reserves. These factors include, but are not restricted to: mining; processing; metallurgical; infrastructure; economic; marketing; legal; environmental compliance; plans, negotiations, or agreements with local individuals or groups; and governmental factors. The number, type and specific characteristics of the modifying factors applied will necessarily be a function of and depend upon the mineral, mine, property, or project. MSHA : Mine Safety and Health Administration. A division of the U.S. Department of Labor. NTU : Nephelometric turbidity units NPV : Net Present Value NWS : Northern White Sands Probable Frac Sand Reserve : A Probable Frac Sand Reserve is the economically mineable part of an Indicated and, in some circumstances, a Measured Frac Sand Resource. The confidence in the Modifying Factors applying to a Probable Frac Sand Reserve is lower than that applying to a Proven Frac Sand Reserve. Proppant Sand : See “Frac Sand” Proven Frac Sand Reserve : A Proven Frac Sand Reserve is the economically mineable part of a Measured Frac Sand Resource. A Proven Frac Sand Reserve implies a high degree of confidence in the Modifying Factors. psi : Pounds per square inch QP : Qualified Person ROM : Run-of-Mine. The as-mined including in-seam clay partings mined with the sand, and out-of-seam dilution. SEC : U.S. Securities and Exchange Commission S-K 1300 : Subpart 1300 and Item 601(b)(96) of the U.S. Securities and Exchange Commission’s Regulation S-K Smart Sand : Smart Sand, Inc.
5 GLOSSARY OF ABBREVIATIONS AND DEFINITIONS - Continued JOHN T. BOYD COMPANY Surficial : Relating to the earths surface or the geology that is on the surface. Ton : Short Ton. A unit of weight equal to 2,000 pounds tph : Tons per Hour TRS : Technical Report Summary USACE : U.S. Army Corps of Engineers WDATCP : Wisconsin Department of Agriculture, Trade & Consumer Protection WDNR : Wisconsin Department of Natural Resources Q:\ENG_WP\3555.028 SS - Blair FY25\WP\Report\Glossary.docx
1-1 JOHN T. BOYD COMPANY 1.0 EXECUTIVE SUMMARY 1.1 Introduction Smart Sand’s Blair Sand Mine is an active surface sand mining and processing operation that has been producing various finished frac sand products from the Wonewoc Sandstone Formation since the operation opened in 2016. BOYD was retained by Smart Sand to complete an update to our initial independent estimate (BOYD Report No. 3555.024) of frac sand resources and frac sand reserves for the Blair Mine. Smart Sand purchased the Blair Operation in March 2022 from Hi-Crush LLC, who was the original developer of the operation. The purpose of this TRS is threefold: (1) to summarize technical and scientific information for the subject property, (2) to provide the conclusions of our review of the information for the property, and (3) to provide statements of frac sand resources and frac sand reserves for the Blair Mine in accordance with the disclosure requirements set forth in the SEC’s S-K 1300. BOYD’s findings are based on our detailed examination of the supporting geologic, technical, and economic information obtained from: (1) data, reports, and other information provided by Smart Sand, (2) existing BOYD work files and reports, (3) discussions with Smart Sand personnel, (4) records on file with regulatory agencies, (5) data, reports, and other information from public sources, and (6) nonconfidential information in BOYD’s possession. Our investigation was performed to obtain reasonable assurance that Smart Sand’s frac sand resource and frac sand reserve statements are free from material misstatement. This report provides results of an independent estimate of the frac sand resources and frac sand reserves underlying their Blair, Wisconsin property. The basis for these estimates is an independently prepared volumetric geologic model estimating frac sand resources and frac sand reserves completed by BOYD. Updated site-specific and operational information was provided by Smart Sand to bring this estimate current as of the effective date of this report. Unless otherwise noted, the effective date of the information provided herein, including estimates of frac sand resources and frac sand reserves, is December 31, 2025.
1-2 JOHN T. BOYD COMPANY 1.2 Property Description and Location Smart Sand’s Blair Mine straddles the Jackson and Trempealeau County lines in western Wisconsin. The Blair Mine has mined and produced frac sand from the Wonewoc Formation Sandstone since commencing operations in 2012. Smart Sand controls approximately 1,285 contiguous acres of property which is owned fee simple. The general location of the subject property is provided in Figure 1.1, following this page. 1.3 Geology Northern white sands (NWS) are generally located in the north-central portion of the United States (Minnesota, Wisconsin, and Illinois, with lesser amounts in Arkansas and Iowa). NWS is found in poorly cemented Cambrian and Ordovician sandstones and in unconsolidated alluvial deposits locally derived from these sandstones. The Saint Peter, Jordan, Wonewoc, and Mount Simon formations are the primary sources of NWS. The Blair Operation’s target silica bearing formation is the Wonewoc Sandstone, which is a massive formation in areal extent and thickness. The Wonewoc Formation spans from a northern extent of Minnesota south to Arkansas, and from an eastern extent of Wisconsin west into Nebraska and South Dakota. On a regional basis, the Wonewoc ranges in thickness from a few feet to over 200 ft portions of northern Wisconsin, with a general thickness ranging between 100 ft to 200 ft. The surface of the Blair Property is overlain by a combination of shale, clayey sands, and soils that range in thickness from 1 ft to 105 ft, with an average thickness of approximately 30 ft throughout the mineable portion of the property. Surface topography within the Blair Property ranges from less than 900 ft above mean sea-level (amsl) on the western edge of the property, where overburden material can be removed with conventional excavation and scraping methods, to 1,150 ft amsl in ridges near the eastern property boundary, where overburden material will most likely be more competent, requiring drilling and blasting prior to excavating.
1-4 JOHN T. BOYD COMPANY Structurally, the Wonewoc Formation within the Blair Property is flat lying with no evidence of faulting, and has been partially eroded to an average thickness of approximately 106 ft. The Wonewoc Sandstone can be generally described as weakly cemented, well rounded and well sorted, with fine-to medium-sized frosted grains of exceptionally pure quartz sands, which are free from deleterious materials. As such, the sand is valued for its high silica content, roundness, and grain strength. Grain size distribution and overburden thickness drive mine planning at the Blair Mine. Sand intervals sampled indicate grain size becomes coarser in the middle depths of the mineable interval. These coarser intervals are approximately 40 ft thick and yield between 33% and 41% 20/40-mesh material. 1.4 Exploration Based on available information, there have been two exploration drilling campaigns performed on the Blair property. An initial 2012 campaign consisted of five drill holes being completed, and a second 2014 campaign consisted of competing seven additional drill holes. Table 1.1, below, summarizes the Blair Property drilling campaigns completed to date. BOYD reviewed drilling and sampling methodologies utilized in the drilling campaigns at the Blair Property, as well as the equipment utilized, and information available regarding the sampling, logging, and field work performed. We note that methodologies and procedures indicate that the data obtained were carefully and professionally collected, prepared, and documented in conformance with generally accepted industry standards. BOYD opines that work conducted is thorough and complete for purposes of evaluating and estimating frac sand resources and frac sand reserves on the Blair Property.
1-5 JOHN T. BOYD COMPANY 1.5 Frac Sand Reserves This report provides an estimate of frac sand reserves for Smart Sand’s Blair Mine in accordance with the requirements set forth in S-K 1300. The estimate was independently prepared by BOYD, and this report, and previous reports, includes a thorough geologic investigation of the property, appropriate modeling of the deposit, development of life-of-mine (LOM) plans, and consideration of the relevant processing, economic (including independent estimates of capital, revenue, and cost), marketing, legal, environmental, socio-economic, and regulatory factors. Smart Sand’s estimated surface mineable frac sand reserves for the Blair Mine total 108.8 million saleable product tons, as of December 31, 2025. Table 1.2, below, presents the estimated frac sand reserve tons by product (size), that are anticipated to be produced at Smart Sand’s Blair Property. The reported reserves include only frac sand which is reportedly owned as of December 31, 2025. It is BOYD’s opinion that extraction of the reported frac sand reserves is technically achievable and economically viable after the consideration of potentially material modifying factors. Projecting finished frac sand product sales of approximately 1.98 million tons per year in 2026, ramping up to a projected 2.8 million tons per year by 2030 and then remaining constant, the operation has an expected LOM of approximately 41 years. Composite samples collected during each of the drilling campaigns were tested by PropTester, Inc (PropTester), Cyprus, Texas, for API RP 19C/ISO 13503-2 (API/ISO) frac sand characteristics. Testing was performed on composite samples created from 20/40, 30/50, 40/70, and 50/140-mesh (100-mesh) product splits with summarized results presented in Table 1.3, on the following page. Mesh Size Proven Probable Total 20/40 38,922 - 38,922 40/70 51,989 - 51,989 70/140 17,924 - 17,924 Total 108,835 - 108,835 Table 1.2: Blair Mine Frac Sand Reserves as of December 31, 2025 Product Tons (000) by Classification
1-6 JOHN T. BOYD COMPANY The composited sample testing indicates that the Blair Mine produces frac sand products which meet minimum API/ISO recommended testing characteristics. BOYD notes that the Blair Operation has an established history of successfully selling various frac sand sized products to exploration and production (E&P), and drilling services customers, both prior to, and since Smart Sand acquired the operation in 2022. 1.6 Operations 1.6.1 Mining The Blair Mine property is divided into northern and southern sections by S River Road, with administrative facilities, the wet processing plant, and active mining areas located in the southern portion, while the dry processing plant and unit train loadout facilities are situated in the northern portion. The northwestern area of the deposit, characterized by sandstone outcrops and minimal overburden, served as the initial mining area, and current mining operations are located just south of the wet plant. Mining is planned to advance from northwest to southeast across the unmined portions of the property, with overburden thickness increasing to an average of approximately 30 feet in the southeastern areas. Mining is conducted using conventional drill, blast, excavator, and haul truck methods. Overburden consisting of soil, clay, and clay-rich sandstone is drilled, blasted, and stockpiled for future reclamation. The underlying Wonewoc Formation sandstone is drilled and blasted on a wide pattern to disaggregate the sand prior to excavation and transport to the wet processing plant. Active pits are dewatered as necessary, with water managed through on-site holding ponds. Current mine planning and exploration indicate mining will extend to a base elevation of approximately 925 feet above mean sea level.
1-7 1.6.2 Processing The Blair plant commenced wash plant operations in 2016. It shut down in 2020 due to the COVID-19 pandemic and was on care and maintenance until it was reopened in 2023. The ROM sand material is hauled to an in-pit feed hopper where it is crushed and conveyed to a wet process plant. Following removal of oversize and waste (<140-mesh) material, the sand is conveyed to the drying and screening plant. Finished product is stored in silos and is railed to multiple oil and gas well service customers via the Canadian National Railway (CN). The wet plant employs typical screen/hydrosizer/cyclone classification and dewatering technology and also has an ultrafine circuit and thickener. The wet plant operates 24 hours a day, 4-5 days a week between March and November. Winter weather shuts the mine and wet processing plant down. A substantial stockpile is created to allow the dry processing plant to continue to run 24 hours a day, 365 days a year. An overland conveyor transports the wet process feed to two 200 tons per hour (tph) natural gas fired dryer. Dry sand is then screened into predominantly 20/40, 30/50, 40/70, and 50/140 (“100 Mesh”) mesh size finished frac sand products. The finished products are stored in five 5,000-ton loadout silos before being railed to customers. 1.6.3 Infrastructure Electricity for the Blair Mine is serviced by Xcel Energy that is routed along the CN corridor, which runs north of the northern property line. The pipeline providing a natural gas supply for the drying equipment is also routed along this corridor and is supplied by We Energies. Plant process water is supplied by wells drilled on the property, as well as water collected in the pit and ponds. Additionally, the wash process water is recycled after fines are removed via settling with a flocculent in a thickener and series of constructed ponds. Potable water is provided by one of the wells on site and by water bottles and jugs delivered. On-site facilities include a scale house, office, shop, and a quality laboratory located in the dry process plant. While in production, the Blair Operation employs approximately 61 people and staffing varies based on production demand. 1.7 Financial Analysis 1.7.1 Market Analysis The North American frac sand market has structurally shifted from long-haul NWS to lower-cost in-basin sands, driven primarily by logistics efficiency and cost optimization following the 2014–2016 oil price downturn. Today, in-basin sand dominates bulk JOHN T. BOYD COMPANY
1-8 JOHN T. BOYD COMPANY volumes—particularly in the Permian Basin—while NWS retains a defensible niche in high-stress or performance-sensitive wells where superior conductivity and crush strength materially improve production outcomes. Smart Sand has demonstrated steady growth in sales volumes from 3.2 million tons in 2021 to 5.4 million tons in 2025, supported by a strong contract base (≈69% of volume) and concentration in key basins such as the Marcellus and Bakken (≈68% of shipments). However, average selling prices declined to $26.28/ton in 2025, reflecting broader market pricing pressures and competitive dynamics. Looking forward, demand for NWS is expected to remain stable but niche, supported by performance-critical applications, constrained supply, and steady premium pricing. While in-basin sands will continue to dominate overall volumes, NWS will remain strategically important for specialized completions. Long-term forecasts indicate stable pricing of approximately $24.96/ton and consistent production volumes, reinforcing the viability of continued frac sand operations at the Blair Mine. 1.7.2 Capital and Operating Costs The Blair Mine is a mature frac sand operation with well-established production, capital, and operating cost structures supported by historical performance and internal forecasts. Based on BOYD’s evaluation and experience with similar mining operations, the capital and operating cost estimates are considered reasonable and reliable, with an expected accuracy range of approximately ±20%. The operation is currently in steady-state production and does not require significant development or expansion capital to maintain planned output levels. Capital expenditures are primarily limited to sustaining capital required to maintain equipment, infrastructure, and operational efficiency. Historical capital spending was approximately $0.78 per ton sold in 2024, increasing to $1.56 per ton sold in 2025, while projected sustaining capital expenditures are forecast at approximately $1.06 per ton sold in 2026, declining to approximately $0.73 per ton sold in 2030 and thereafter. These modest capital requirements reflect the mine’s mature infrastructure and lack of dependence on major future capital investment. Operating costs are stable and predictable, reflecting consistent mining, processing, logistics, and site-level administrative expenses. Historical cash production costs were approximately $16.89 (including royalties) per ton sold in 2025, and projected life-of- mine operating costs are expected to remain consistent at an average of approximately $12.38 (excluding royalties) per ton sold. These projections are based on expected
1-9 JOHN T. BOYD COMPANY labor, consumables, power, maintenance, and equipment costs, and exclude corporate overhead and royalties. Overall, the Blair Mine’s low sustaining capital requirements, stable operating cost structure, and mature operational profile support continued reliable production and long-term economic viability. 1.7.3 Economic Analysis BOYD’s economic analysis confirms the Blair Mine’s frac sand reserves are economically viable and capable of generating substantial long-term positive cash flow under reasonable operating and market assumptions. Using a discounted cash flow (DCF) model with a 12% after-tax discount rate, the project generates an after-tax net present value (NPV₁₂) of approximately $78.3 million and total after-tax life-of-mine cash flow of approximately $401.7 million over a remaining reserve life of 41 years. Life-of-mine production is forecast at approximately 108.8 million tons of finished frac sand, generating total revenues of approximately $2.72 billion at an average mine-gate price of $24.96 per ton sold. Cash production costs average approximately $12.38 per ton sold, resulting in strong contribution margins and cumulative pre-tax cash flow exceeding $548.1 million. Capital requirements are modest, totaling approximately $80.8 million over the life of the mine, reflecting the operation’s mature, steady-state status. Sensitivity analysis demonstrates that project economics are most influenced by frac sand pricing and operating costs, while capital cost variations have relatively limited impact. Even under adverse conditions, the project remains economically robust across a wide range of assumptions. Based on these results, BOYD concludes that the Blair Mine represents a financially viable and sustainable long-term frac sand operation with significant remaining economic value. 1.8 Regulation and Liabilities The Blair Mine’s operations are predominantly regulated by Trempealeau and Jackson counties, Wisconsin, the Wisconsin Department of Natural Resources (WDNR) and several local municipalities regarding water use, air quality, general operations and eventual reclamation of the site. Safety and operational regulations are administered by the Mine Safety and Health Administration (MSHA).
1-10 JOHN T. BOYD COMPANY Based on our review of information provided by Smart Sand and available public information, it is BOYD’s opinion that the Blair Mine’s record of compliance with applicable mining, water quality, and environmental regulations is generally typical for that of the industry. BOYD is not aware of any regulatory violation or compliance issue which would materially impact the frac sand reserve estimate. 1.9 Conclusions It is BOYD’s overall conclusion that Smart Sand’s Blair Mine frac sand reserves, as reported herein: (1) were prepared in conformance with accepted industry standards and practices, and (2) are reasonably and appropriately supported by technical evaluations, which consider all relevant modifying factors. We do not believe there is other relevant data or information material to the Blair Property that would render this technical report summary misleading. Our conclusions represent only informed professional judgment. The ability of Smart Sand, or any mine operator, to recover all of the reported frac sand reserves is dependent on numerous factors that are beyond the control of, and cannot be anticipated by, BOYD. These factors include mining and geologic conditions, the capabilities of management and employees, the securing of required approvals and permits in a timely manner, future sand prices, etc. Unforeseen changes in regulations could also impact performance. Opinions presented in this report apply to the site conditions and features as they existed at the time of BOYD’s investigations and those reasonably foreseeable. Q:\ENG_WP\3555.028 SS - Blair FY25\WP\Report\CH-1 - Executive Summary.docx
2-1 JOHN T. BOYD COMPANY 2.0 INTRODUCTION 2.1 Registrant Smart Sand is a fully integrated frac and industrial sand supply and services company focused on the mining, processing, and distribution of Northern White frac sand, an essential material in hydraulic fracturing for oil and gas that boosts hydrocarbon recovery. The company delivers end-to-end logistics solutions, transporting sand efficiently from the mine to the wellsite, with innovative storage and delivery systems such as SmartDepot™ silos and SmartPath® transloaders. In addition to serving the oil and gas sector, Smart Sand also provides sand products for industrial manufacturers and a variety of other industrial applications. Smart Sand, incorporated in Delaware in July 2011 and headquartered in Yardley, Pennsylvania, is a publicly traded company listed on NASDAQ under the ticker SND. Additional information regarding Smart Sand can be found on their website at www.smartsand.com. 2.2 Purpose and Terms of Reference Smart Sand retained BOYD to independently prepare and present estimates of frac sand resources and frac sand reserves for the Blair Mine in accordance with the disclosure requirements set forth in S-K 1300. As such, the purpose of this TRS is threefold: (1) to summarize technical and scientific information for the subject mining property, (2) to provide the conclusions of our review of the information for the property, and (3) to provide statements of frac sand resources and frac sand reserves for the Blair Mine. BOYD’s opinions and conclusions are based on our detailed review of the supporting geologic, technical, and economic information provided by Smart Sand, which was used in formulating the estimates of frac sand resources and frac sand reserves disclosed herein. We independently estimated the frac sand resources and frac sand reserves from first principles using exploration information provided by Smart Sand or by third-party experts engaged by Smart Sand. We employed standard engineering and geoscience methods, or a combination of methods, that we considered to be appropriate and necessary to establish the conclusions set forth herein. As in all aspects of mining property evaluation, there are uncertainties inherent in the interpretation of engineering and geoscience data; therefore, our conclusions necessarily represent only informed professional judgment.
2-2 JOHN T. BOYD COMPANY The ability of Smart Sand, or any mine operator, to recover all the estimated frac sand reserves presented in this report is dependent on numerous factors that are beyond the control of, and cannot be anticipated by, BOYD. These factors include mining and geologic conditions, the capabilities of management and employees, the securing of required approvals and permits in a timely manner, future sand prices, etc. Unforeseen changes in regulations could also impact performance. Opinions presented in this report apply to the site conditions and features as they existed at the time of BOYD’s investigations and those reasonably foreseeable. This report is intended for use by Smart Sand, subject to the terms and conditions of its professional services agreement with BOYD. We also consent to Smart Sand filing this TRS with the SEC pursuant to S-K 1300. Except for the purposes legislated under U.S. securities law, any other uses of or reliance on this report by any third party is at that party’s sole risk. 2.3 Expert Qualifications BOYD is an independent consulting firm specializing in mining-related engineering and financial consulting services. Since 1943, BOYD has completed over 4,000 projects in the United States and more than 90 other countries. Our full-time staff comprises experts in: civil, environmental, geotechnical, and mining engineering; geology; mineral economics; and market analysis. Our extensive experience in frac sand resource and frac sand reserve estimation, and our knowledge of the subject properties, provide BOYD with an informed basis to opine on the frac sand resources and frac sand reserves available at the Blair Mine. An overview of BOYD can be found on our website at www.jtboyd.com. The individuals primarily responsible for the preparation of this report and the estimates of frac sand reserves presented herein are by virtue of their education, experience, and professional association considered qualified persons (QPs) as defined in S-K 1300. Neither BOYD nor its staff employed in the preparation of this report have any beneficial interest in Smart Sand, and are not insiders, associates, or affiliates of Smart Sand. The results of our assignment were not dependent upon any prior agreements concerning the conclusions to be reached, nor were there any undisclosed understandings concerning any future business dealings between Smart Sand and BOYD. This report was prepared in return for fees based on agreed-upon commercial rates, and the payment for our services was not contingent upon our opinions regarding the project or approval of our work by Smart Sand and its representatives.
2-3 JOHN T. BOYD COMPANY 2.4 Principal Sources of Information The information, estimates, opinions, and conclusions presented herein are informed by: (1) data, reports, and other information provided by Smart Sand, (2) discussions with Smart Sand personnel, (3) records on file with regulatory agencies, (4) data, reports, and other information from public sources, and (5) nonconfidential information in BOYD’s possession. The following information was provided by Smart Sand: • Exploration records (e.g., drill hole location maps, drilling logs, and lab testing summaries) • Mapping data, including: - Property control boundaries - Infrastructure locations - Easement and right-of-way boundaries - Topograhpic site surveys - Recent mining extents • Overview of processing operations and detailed flow diagrams • Preliminary business plans • Historical information, including: - Production reports and reconciliation statements - Financial statements - Product sales and pricing - Mine plans - Site plans - Operational data • Files related to mining and operating permits Work files prepared for, and information contained in, the following BOYD report was utilized to prepare the estimates of frac sand resources and frac sand reserves disclosed herein: John T. Boyd Company. Technical Report Summary: Frac Sand Resources and Reserves, Blair Mine, Jackson and Trempealeau Counties, Wisconsin, Report No. 3555.024 (February 2024). Any other information from sources external to BOYD and/or Smart Sand is referenced accordingly.
2-4 JOHN T. BOYD COMPANY The data and work papers used in the preparation of this report are on file in our offices. 2.4.1 Personal Inspections The most recent personal inspections of the Blair Mine operation were made by two of BOYD’s senior geology and mining staff—both qualified persons—on February 21, 2023. The site visit included: (1) observation of the active mining operations, (2) a tour of the mine site’s surface infrastructure, and (3) a detailed discussion of the mine plan. BOYD’s representatives were accompanied by Smart Sand management who openly and cooperatively answered questions regarding, but not limited to: site geology, mining conditions and operations, equipment usage, labor relations, operating and capital costs, current and proposed processing operations, and frac sand marketing. 2.4.2 Reliance on Information Provided by the Registrant In the preparation of this report, BOYD has relied, exclusively and without independent verification, upon information furnished by Smart Sand with respect to: • Property title and status • Encumbrances, easements, and rights-of-way • Permits, bonds, and reclamation liability • Sustainability initiatives • Surface tailings management • Mine closure requirements and plans • Monitoring/compliance requirements for protected areas/species • Community relations • Market overview and strategy • Product specifications • Marketing and sales contracts • Income tax rates • Inflation and discount rates Our opinions and conclusions regarding this information are provided in the relevant sections of this report. 2.4.3 Verification of Information BOYD exercised due care in reviewing the information provided by Smart Sand within the scope of our expertise and experience (which is in technical and financial mining issues) and concluded the data are reasonable and reliable considering the status of the subject properties and the purpose for which this report was prepared. We have no reason to believe that any material facts have been withheld or misstated, or that further analysis may reveal additional material information. However, the
2-5 JOHN T. BOYD COMPANY accuracy of the results and conclusions of this report are reliant on the accuracy of the information provided by Smart Sand. While we are not responsible for any material omissions in the information provided for use in this report, we accept responsibility for the disclosure of information contained herein which is within the scope of our expertise. 2.4.4 Other Relevant Data and Information BOYD is not aware of any additional information that would materially affect the frac sand resource and frac sand reserve estimates reported herein. 2.5 Report Version The effective (i.e., “as of”) date of this TRS is December 31, 2025. The estimates of frac sand resources and frac sand reserves and supporting information presented in this report are effective as of December 31, 2025. This is the second TRS for the Blair Mine filed by Smart Sand. This report supersedes the previously filed TRS and any predated estimates of frac sand resources or frac reserves for the Blair Mine. Users of this document should ensure that this is the most recent disclosure of frac sand resources and frac sand reserves for the Blair Mine as it is no longer valid if more recent estimates are available. 2.6 Units of Measure The U.S. customary measurement system has been used throughout this report. Tons are short tons of 2,000 pounds-mass. Volumes and tonnages have been rounded to reflect estimate precision; minor differences generated by rounding are not considered material to the disclosed estimates. Unless otherwise stated, currency is expressed in U.S. Dollars ($). Historic prices and costs are presented in nominal (i.e., unadjusted) dollars. Future dollar values are expressed on a constant (i.e., unescalated) basis as of the effective date of this report. q:\eng_wp\3555.028 ss - blair fy25\wp\report\ch-2 - introduction.docx
3-1 JOHN T. BOYD COMPANY 3.0 PROPERTY OVERVIEW 3.1 Description and Location Smart Sand’s Blair Mine is an active surface frac sand mining and processing operation that produces premium branded NWS products for use in the hydraulic fracturing process (known as “fracking”) to produce petroleum fluids, such as oil, natural gas, and natural gas liquids. Figure 6.2 (page 6-8), shows the general layout of the Blair property, including locations of mine offices and ancillary facilities, processing plants, loadout facilities, and current and former mining pits. The Blair Property is located in Trempealeau and Jackson Counties, Wisconsin, consisting of a contiguous block of property totaling approximately 1,285 acres with surface and mineral rights owned in fee by Smart Sand. The subject property is situated approximately three miles east of the City of Blair, and approximately 100 miles southeast of the Minneapolis-St. Paul metro area. Geographically, the Blair frac sand processing plant is located at approximately 41°17'56.59"N latitude and 91°10'11.96"W longitude. 3.2 History Hi-Crush began development of the Blair Operation in 2012 by completing initial exploratory drilling and sampling of the Wonewoc Sandstone underlying the subject property. Additional exploration in 2014 was completed, and the construction of the operation’s frac sand processing plants began in 2015. Production commenced at the Blair operation in 2016. Hi-Crush mined and processed frac sand at the Blair operation from 2016 through 2020, when the COVID-19 pandemic created economic uncertainties resulting in the facility being temporarily idled. Hi-Crush declared bankruptcy later that year and placed the Blair operation on indefinite care and maintenance status. In March 2022, Smart Sand acquired the Blair Operation for $6.5 million, rehabbing and placing the facility into active operational status in May 2023.
3-2 3.3 Property Control The Blair property comprises approximately 1,285 contiguous acres of surface and mineral rights reportedly owned in fee by Smart Sand. Smart Sand pays a royalty of approximately $1.70 per ton with certain minimum annual payments. To BOYD’s knowledge, there are no additional royalties, overriding or limited royalties, working interests, production payments, net profit interests, or other mineral interests in the Blair property. 3.4 Adjacent Properties Extensive frac sand mining and processing activity occurs throughout three general mining districts (regions) of Wisconsin: the Barron (northwestern Wisconsin), Blair (west- central Wisconsin), and Oakdale (south-central Wisconsin) districts. Smart Sand’s Blair Mine is located in the southern portion of the Blair mining district. Nearby frac sand mines include Source Energy’s Blair and Preston operations, and Mammoth Energy’s Taylor operation in the Blair mining district. A half-dozen additional frac sand mines are located in the Barron and Oakdale mining districts, including Smart Sand’s own Oakdale Mine approximately 45 miles to the southeast. There is no information included in the preparation of this report that has been sourced from adjacent operations. 3.5 Regulation and Liabilities The Blair Mine operates under several permits and must comply with various other federal, state, and municipal regulations that do not require a specific permit. Smart Sand reports that necessary permits are in place or applied for to support immediate operations. New permits or permit revisions may be necessary from time to time to facilitate future operations. Given sufficient time and planning, Smart Sand should be able to secure new permits, as required, to maintain its planned operations within the context of the current regulations. Smart Sand pays property taxes to the local governments in Trempealeau and Jackson Counties in order to maintain ownership of the Blair property. To the extent known to BOYD, there are no current violations, fines, liens, or other significant factors or risks that may affect access, title, or the right or ability to perform work on the Blair property. JOHN T. BOYD COMPANY
3-3 JOHN T. BOYD COMPANY 3.6 Accessibility, Local Resources, and Infrastructure Smart Sand’s Blair Mine is located near several small rural towns in western Wisconsin. The city of Blair has a population of 1,366, while the surrounding counties of Clark, Eau Claire, Jackson, La Crosse, Monroe, and Trempealeau have a population of approximately 360,000 according to 2021 U.S. Census Data. General access to the Blair Mine is via a well-developed network of primary and secondary roads serviced by state and local governments. These roads offer direct access to the mine and processing facilities and are open year-round. Primary vehicular access to the property is via U.S. Highway 95, with nearby access to Interstate 94. The Blair Mine has an on-site rail loadout facility with access to the CN rail network. Several regional airports are within an hour’s drive from the mine, and the nearest major international airport, the Minneapolis-St. Paul International Airport, is just over two hours away by road. Reliable sources of three phase electrical power, natural gas, water, and other miscellaneous materials are readily available. Electrical power is provided by regional utility companies. Water is supplied to the operation via various sources, such as on-site wells and ponds, and public water systems. 3.7 Physiography The Blair operation is located in the Western Upland physiographic region of Wisconsin, a geographical region that comprises much of the western half of the state. The Western Upland region is characterized by steep hills, wooded ridges, and rocky outcrops dissected by streams and rivers. This region comprises a portion of the greater driftless area, which marks the termination of advancing glaciers during the last glacial periods of the ice age (Wisconsin Period), which lasted until approximately 11,000 years ago. The surface of the Blair Property is overlain by topsoil and sandy clays and shales, which, based on a combination of drill hole data and flown topographic mapping, indicate that overburden ranges from being absent where the Wonewoc outcrops along the western extents of the property, to a thickness of up to 106 ft in isolated high-elevation hilltops. Over the entire mineable area of the property, overburden averages approximately 30 ft in thickness. Beneath the overburden material is the Wonewoc Sandstone Formation, one of the primary sources of NWS mined in the region.
3-4 JOHN T. BOYD COMPANY Land cover in the immediate region consists primarily of a mixture of hardwood and conifer forests in higher elevations, and intermittent grasslands and wetlands in lower elevations with agricultural land in between. 3.8 Climate Near the Blair operation, summers are relatively mild; winters are cold, dry, and enduring; skies are generally partly cloudy to clear. Average monthly high temperatures range from 9ºF to 83ºF, with the months of November through March exhibiting average lows at or below freezing (32ºF). Average annual rainfall is approximately 27 in, with approximately 81 days of rain annually. Average annual snowfall totals approximately 21 in, with an average of 9 days per year of notable snowfall. In general, the operating season for the Oakdale Mine is year-round, as Smart Sand stockpiles a surplus of WIP material to continue feeding the dry plant and loadout through the winter months. Adverse weather conditions seldom restrict or interfere with the mining, processing, and loading operations; however, extreme weather conditions may temporarily impact operations. Although rare, periodic flooding may be possible during extreme rainfall events. Q:\ENG_WP\3555.028 SS - Blair FY25\WP\Report\CH-3 - Property Description.docx
4-1 JOHN T. BOYD COMPANY 4.0 GEOLOGY 4.1 Regional Geology NWS are generally located in the north-central portion of the United States (Minnesota, Wisconsin, and Illinois, and to lesser extents in Arkansas and Iowa). NWS is found in poorly cemented Cambrian and Ordovician sandstones and in unconsolidated alluvial deposits locally derived from these sandstones. The Saint Peter, Jordan, Wonewoc, and Mount Simon formations are the primary sources of NWS. Smart Sand’s Blair Mine is located in the Western Coulees and Ridges ecoregion of western Wisconsin. This region is characterized by heavily eroded, yet unglaciated, early Paleozoic (Cambrian and Ordovician) Age bedrock. Extensive river channels with networks of floodplains, deltas, and terraces eroded much of the poorly cemented sandstone bedrock formations from the region, leaving scoured valley areas that were gradually infilled by further erosional processes from the surrounding ridges. The Cambrian Age Wonewoc Formation sandstone is the primary lithologic formation of economic interest on the Blair Property, and has been noted as spanning an area from Minnesota to Arkansas, and from Illinois into Nebraska and South Dakota. The Wonewoc Formation is composed of two members: the upper Ironton Member, and the lower Galesville Member, as the formation exhibits grain sizing that sometimes grades from medium to medium-coarse in the upper section, and medium to fine-grained in the lower section. Sand grains comprising the Wonewoc Formation were originally deposited in clear shallow waters near the shore of a Cambrian Sea. The high-energy wave action during particle transport and deposition helped form the generally well sorted and well rounded, fine to medium-grained, frosted sandstone deposit that the Wonewoc is known for. Regionally the Wonewoc exhibits a relatively uniform range of depositional thickness between 100 ft to 200 ft. The presence of the Wonewoc Formation in southwestern Wisconsin is often easily identifiable as it tends to be located underlying clusters of densely wooded, higher-elevation hilly regions of the state. These wooded areas are often on the peripheries of farm fields where sandy and rocky soils began to be encountered during cultivation of agricultural lands.
4-2 JOHN T. BOYD COMPANY 4.2 Property Geology 4.2.1 General Stratigraphy Cambrian sedimentary strata comprise the surface stratigraphic units underlying the soils in and around the Blair property. These units primarily include bedrock of, in order of deposition, the Mount Simon, Eau Claire, and Wonewoc Formations. A generalized stratigraphic chart of the surficial geologic units in Jackson and Trempealeau Counties, Wisconsin is presented in Figure 4.1, below. Figure 4.1: Generalized Stratigraphic Chart, Jackson and Trempealeau Counties, Wisconsin The following text discusses the strata encountered near the Blair property, in depositional. Mount Simon Formation The Mount Simon Formation consists of interbedded sandstones and shales. The lower portion of the formation contains more shale, while the upper portion contains more sand intervals. The Mount Simon can generally be described as a poorly consolidated, poorly sorted, fine-grained quartz sandstone deposited in shallow marine environments as Cambrian seas formed in the region. Sands derived from the Mount Simon Formation are typically white in color, but may occur as yellowish-gray or grayish-red sands as well. Eau Claire Formation The Eau Claire Formation overlies the Mount Simon and is comprised of a thinly bedded and shaley fine-grained, moderately-to-well sorted sandstone that may be argillaceous or glauconitic. The Eau Claire is noted as unconformably overlying the Mount Simon. Wonewoc Formation The Wonewoc Formation typically overlies the Eau Claire Formation, and generally consists of medium to coarse grained sandstone that is typically white in color, but may also appear as a pale yellow. The Blair operation mines and processes sand from the lower member (Galesville) of the Wonewoc Formation, which is a massively bedded silica-rich sandstone interval that is regionally very consistent in depositional nature, both in areal extent and thickness. The
4-3 JOHN T. BOYD COMPANY Galesville Member contains primarily fine-to-medium grained quartz sand grains that are well sorted and monocrystalline in structure. 4.2.2 Structural Geology Structure of the mineable deposit located on the Blair property appears to be flat lying with no evidence of faulting or other distinguishing geologic features. The Wonewoc Formation deposit found on the Blair property has been eroded to an average thickness of approximately 102 ft throughout the mineable portion of the property. A cross-section through the deposit is provided in Figure 4.2, on the following page. 4.3 Frac Sand Geology Frac sand is a naturally occurring, high silica content quartz sand, with grains that are generally well-rounded. The main difference between frac sand and other sands is that frac sand grains are relatively pure in composition, consisting almost entirely of quartz; other sands have numerous impurities that may be cemented to the quartz grains. The pure quartz composition of frac sand grains, along with being well-rounded and spherical in shape, gives these sands the characteristics (crush strength, high acid solubility, low turbidity) that are sought after by oil and gas producers for use in developing wells. The sands mined at Blair are NWS that are processed into various high quality frac sand products. Frac sands generally exhibit the following characteristics required by oil and gas producers for use in developing wells: • High-purity – frac sand grains are relatively pure (typically, >95% silicon dioxide) in composition and almost entirely free from contaminants. Typical sand deposits have numerous impurities fused to the silica grains, such as iron, carbonate, potassium, and other trace elements/minerals, which can make them more susceptible to mechanical and chemical alteration. Mineralogical purity of silica content is a characteristic of mature sand, which has been highly reworked and well sorted, so that the mechanically and chemically less-resistant minerals and fine particles have been dissolved or winnowed away. • Homogeneous grain size – hydraulic fracturing procedures require sand in a relatively narrow range of grain sizes which are dependent on the specific geological conditions of the well and the fracking procedures used. Larger sand grains generally provide better permeability, but smaller sand grains are typically stronger. When describing frac sand, the product is frequently referred to as simply the sieve cut,
4-5 JOHN T. BOYD COMPANY e.g., 20/40 mesh sand—meaning that 90 percent of the sand is fine enough to pass through a 20-mesh sieve and is coarse enough to be retained on a 40-mesh sieve. Common frac sand sizes include 20/40 mesh, 30/50 mesh, 40/70 mesh, “100 mesh”, “200 mesh”, and finer. The size ranges for “100 mesh” and “200 mesh” vary significantly between manufacturers. As of the date of this report, finer sands such as 40/70 mesh and “100 mesh” have become more widely utilized in shale gas well fracturing. • High sphericity and roundness – Sphericity and roundness describe the overall shape of the sand grains. Sphericity measures how close the grains approach the shape of a sphere while roundness measures the relative sharpness of corners and curvatures of the grains. Greater sphericity and roundness provide better grain strength and porosity/permeability between grains, allowing better flow of oil and gas from the fractures to the wellhead. A more spherical shape also enables the grains to be carried in the fracking fluid with minimal turbulence. • High crush resistance – Crush resistance of frac sand is dependent upon the hardness and shape of the sand grain. Generally, a high percentage of silica in the sand increases its crush resistance. Additionally, monocrystalline grains are stronger than composite grains. Crush resistance is expressed as a K-value that indicates the highest pressure (rounded to the nearest 1,000 psi) that generates less than 10 weight percent fines (i.e., crushed sand grains). For example, a K-value of 7 means that, at 7,000 psi pressure, no more than 10 weight percent fines were generated, but more than 10 weight percent fines were generated at the next highest pressure. The higher the K-value, the more crush-resistant the sand is. • Low acid solubility – Acid solubility is an indication of the amount of soluble cement or soluble mineral grains (i.e., non-silica contaminants) in the frac sand; low solubility requires a high silica content, as pure quartz tends to be insoluble under normal conditions. • Low turbidity – Turbidity is a measure of the clay, silt, or other fine grains and impurities in the sand. Low turbidity is a result of mineralogical maturity and grain-size sorting in the natural depositional environment. Generally, fine suspended matter in the mined sand is washed out during processing, so this property can be somewhat controlled for the final product. Frac sands are generally characterized by a high silica content, high roundness and sphericity, white color, and lack of deleterious material. Because of their monocrystalline structure, these sands have superior grain strength when compared to other silica sands. Q:\ENG_WP\3555.028 SS - Blair FY25\WP\Report\CH-4 - Geology.docx
5-1 JOHN T. BOYD COMPANY 5.0 EXPLORATION, SAMPLING, AND TESTING 5.1 Background The Blair operation was originally developed and operated by Hi-Crush, with initial exploratory drilling and sampling completed on the property in 2012. Additional exploration was conducted in 2014, and operations commenced in early 2016. 5.2 Exploration Procedures 5.2.1 Drilling and Sampling To date, two separate exploration drilling programs have been completed at the Blair operation, resulting in a total of 12 drill holes being drilled and sampled across the mine area. Each of the completed exploration and sampling campaigns was directed and planned by Hi-Crush. BOYD worked with Hi-Crush at the time to suggest sampling protocols in order to ensure that representative samples of the sand intervals were obtained through the total depths drilled. BOYD utilized the results of the completed geologic logs and laboratory testing results to develop a geologic model of the Blair deposit. Table 5.1, below, provides summary information on the drilling completed to date, with additional information on each exploration campaign discussed in Sections 5.2.2 and 5.2.3. 5.2.2 2012 Air Rotary Exploration Campaign The initial exploration and sampling campaign consisted of completing five widely spaced air rotary drill holes across the Blair property. Drilling was contracted to Thein Well Services, Incorporated (Thein), Monticello, Minnesota, to utilize an air rotary drilling rig to obtain subsurface samples on the subject property. Field work was completed by
5-2 JOHN T. BOYD COMPANY Summit Envirosolutions (Summit), St. Paul, Minnesota, who provided geologists to oversee geologic logging and sampling. Air rotary drilling utilizes a rotating impact hammer drilling bit to break up the strata being drilled through. High pressure air drives the impacting and rotating forces of the hammer bit to advance drill hole depths while also cooling the bit during drilling. Cuttings produced as the bit advances down hole are blown back up the drill hole to the surface, keeping the hole clear as the cutting head advances. Samples are obtained by placing a chip tray beneath the cyclone chute on the drilling rig, where the liberated materials accumulate. Samples were gathered for each 10 ft interval that the drill rig advanced to total depths ranging from 120 ft to 150 ft below ground surface. Samples obtained for each 10 ft run were coned and quartered in the field, and duplicate samples of each 10 ft run were obtained. Sample material was placed into a heavy-mil plastic bag labeled with drill hole name, top and bottom depth, and whether each sample was an “A Sample” or a “B Sample”, before being sealed. Sample bags were placed into buckets, and lids were secured when filled. Inventories of samples included in each bucket were taken as drilling progressed. The “A Sample” set was sent to FracTAL, LLC (FracTAL), St. Paul, Minnesota for sample preparation and particle size analyses, while the “B Sample” set was placed into storage by Hi-Crush for archival purposes. After completing particle size analyses, FracTAL was directed by Hi-Crush to create two sets of composite “product size” (20/40, 30/50, 40/70, 50/140-mesh) samples from two different drill holes on the property, and send them to Prop Tester, Cyprus, Texas to have API/ISO frac sand characteristic testing completed. These composite samples would represent the fully processed (washed and dried) material that would be produced at the Blair operation. 5.2.3 2014 Rotosonic Exploration Campaign The 2014 exploration and sampling campaign consisted of completing seven rotosonic drill holes on the Blair property, to serve as an infill drilling campaign and obtain additional detailed information on the deposit for mine planning and plant design. The 2014 drilling campaign was contracted to Cascade Environmental (Cascade), Little Falls, Minnesota, to utilize a rotosonic drilling rig to obtain subsurface sample materials, with field work again contracted to Summit. Rotosonic drilling utilizes a rotating and vibratory drilling head that advances a hollow drilling bit and core barrels down hole. This drilling method provides good recovery results with a nearly undisturbed and continuous drilling core in poorly consolidated
5-3 JOHN T. BOYD COMPANY strata. As the bit advances down hole, rotational forces and different vibration frequencies can be applied by the drill operator to advance through various lithology types, while maximizing core recoveries. The rotosonic drill rig advanced down hole 10 ft at a time. Samples were obtained by pulling the core barrels after each 10 ft run, and applying vibratory forces to the core barrel containing the recovered core. Vibrations would cause the core to slide out of the barrel and into a similar sized core bag. Drillers label the bottom depth of each core bag containing the extruded core and place the bag onto a core tray for inspection. Geologic logging, core photographs sampling may then take place while the drillers continue drilling the next drill run. Samples were obtained by taking a trowel and sampling approximately 1/4 of the diameter of the core, along the entire length of the recovered interval, in order to create a representative sample of the each 10 ft drilling run. Sampled material was placed into smaller heavy-mil sample bags, which were then labeled with drill hole name, top and bottom of the sample interval, and the sample ID before being sealed. Bagged samples were placed into buckets with lids secured and contents of the bucket noted. Duplicate samples were again taken in this campaign, with one sample set sent to FracTAL for preparation and particle size analyses, and the duplicate sample set placed into archival storage by Hi-Crush. FracTAL again prepared “product size” composite samples from material obtained from two different rotosonic drill holes, which were sent to PropTester for API/ISO analysis. 5.2.4 Frac Sand Testing Numerous samples obtained on the Blair property from each of the completed drilling campaigns were taken to FracTAL, where they were first prepared and analyzed for particle size distribution. The general procedure for particle size distribution analysis was as follows: 1. The sample was dried to remove moisture. 2. A 600- to 1,200-gram subsample was collected and weighed. 3. The subsample was placed in a blender for three minutes to break up the material as much as possible. 4. The blended subsample was then placed on a 200-mesh wash screen, and thoroughly washed to remove any fine materials (e.g., clays and silts). 5. The remaining larger than 200 mesh (+200 mesh) material is then dried and weighed to determine the mass of fines that were washed out (i.e., wash loss). 6. The cleaned subsample was then either placed into a sieve stack of different mesh sizes and agitated for a period of 20 minutes, or run through a high-speed
5-4 JOHN T. BOYD COMPANY photographic particle size analyzer (i.e., CAMSIZER) to determine the particle size distribution of the subsample. FracTAL then prepared composite samples for various product sizes, as directed by Hi- Crush. The composite samples were then sent to PropTester and analyzed for API/ISO frac sand characteristics. Grain size distribution analyses and API/ISO testing results are summarized in Section 5.3. 5.2.5 Other Exploration Methods No other methods of exploration (such as airborne or ground geophysical surveys) were completed on the Blair property. 5.3 Laboratory Testing Results The relatively uniform nature of the Wonewoc Formation, combined with the results of independent laboratory testing, indicates the subject property is capable of producing various frac sand products—typically in the 20/140-mesh size fraction–that meet various customer specifications. 5.3.1 Grain Size Distribution Grain size distribution was analyzed according to API/ISO, Section 6. A table of the weighted average product size distributions—by elevation range—were derived from laboratory testing results. Results of these analyses are presented in Table 5.2, below.
5-5 JOHN T. BOYD COMPANY The preceding table highlights the relative size consist, by elevation range, of the sands found within the Blair property. Approximately 90.6% of the sand particles, by weighted average over the total mineable area, are concentrated between the “passing 20-mesh” and “retained 140-mesh” size fraction. 5.3.2 Grain Shape (Sphericity and Roundness) Grain shape was analyzed according to API/ISO Section 7. Under this standard, recommended sphericity and roundness values for Fracs are 0.6 or greater. As part of the grain shape analysis, the presence of grain clusters (weakly cemented grain aggregates) and their approximate proportion in the sample were reported. Grain clusters were not observed. 5.3.3 Acid Solubility Acid solubility was analyzed according to API/ISO Section 8. Under this standard, five grams of sand is treated with 100 milliliters of 12:3 hydrochloric acid to hydrofluoric acid at 150oF for 30 minutes. The recommended maximum acid solubility for proppants in the 30/50-mesh size and coarser size range is 2.0%, and for proppants in the 40/70-mesh size and finer size range is 3.0%. 5.3.4 Turbidity Turbidity was analyzed according to API/ISO Section 9. Under this standard, the suggested maximum frac sand turbidity should be equal to or less than 250 nephelometric turbidity units (NTU). 5.3.5 Crush Resistance Crush resistance is a key test that determines the amount of pressure a sand grain can withstand under laboratory conditions for a two-minute duration. The sample was analyzed according to API/ISO Section 11. Under this standard, the highest stress level (psi) in which the proppant produces no more than 10% crushed fine material is rounded down to the nearest 1,000 psi and reported as the “K-value” of the material. 5.3.6 Quality Summary FracTAL performed API/ISO analyses on composite samples created in the 20/40, 30/50, 40/70, and 50/140-mesh product sizes. Test results are presented in Table 5.3, on the following page.
5-6 JOHN T. BOYD COMPANY Table 5.3: Summary of Select API/ISO Test Results and Associated Recommended Specifications API/ISO API/ISO Result Recommended Result Recommended 50/140 mesh Test 20/40-mesh 30/50-mesh Specification 40/70-mesh Specification Result* Sphericity 0.8 0.7 ≥ 0.6 0.8 0.6> 0.7 Roundness 0.8 0.8 ≥ 0.6 0.8 0.6> 0.8 Acid Solubility (%) 1.9 1.8 ≤ 2.0 1.8 <2.0 2.4 Turbidity (NTU) 9 11 ≤ 250 9 <250 14 K-Value (000 psi) 5 8 - 10 - 13 *Currently, 100-mesh proppant sad material does not have an API/ISO recommended specification. The composited sample testing suggests that the Blair Mine can produce frac sands which meet minimum API/ISO recommended testing characteristics. BOYD notes that the Blair Mine has been selling various frac sand products to their E&P and drilling services customers since 2016. 5.4 Data Verification For purposes of this report, BOYD notes that we prepared an initial review of the Blair operation in 2016 for Hi-Crush. We also completed an initial TRS on the Blair operation in 2024 for Smart Sand, preparing updates to the estimated frac sand resources and frac sand reserves, as material changes have occurred in the development of the operation. Material changes may include but are not limited to: new exploration drilling and testing data; the purchase or sale of property; changes in demand for product sizes; operational changes or updates. The December 31, 2025 reserve estimate for the Blair property is based on historic drill hole data provided to BOYD. It is customary in preparing frac sand resource and frac sand reserve estimates to accept basic drilling and quality testing data as provided by the client, subject to the reported results being judged representative and reasonable. As we have judged the drilling and quality data representative and reasonable, we opine that they are still representative and reasonable for use in the December 31, 2025 resource and reserve estimate. Q:\ENG_WP\3555.028 SS - Blair FY25\WP\Report\CH-5 - Exploration.docx
6-1 JOHN T. BOYD COMPANY 6.0 FRAC SAND RESOURCES AND RESERVES 6.1 Applicable Standards and Definitions Unless otherwise stated, frac sand resource and frac sand reserve estimates disclosed herein are completed in accordance with the standards and definitions provided by S-K 1300. It should be noted that BOYD considers the terms “mineral” and “frac sand” to be generally interchangeable within the relevant sections of S-K 1300. Estimates of any mineral resources and reserves are always subject to a degree of uncertainty. The level of confidence that can be applied to a particular estimate is a function of, among other things: the amount, quality, and completeness of exploration data; the geological complexity of the deposit; and economic, legal, social, and environmental factors associated with mining the resource/reserve. By assignment, BOYD used the definitions provided in S-K 1300 to describe the degree of uncertainty associated with the estimates reported herein. The definition of mineral (frac sand) resource provided by S-K 1300 is: Mineral resource is a concentration or occurrence of material of economic interest in or on the Earth's crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A mineral resource is a reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining dimensions, location or continuity, that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled. Estimates of proppant sand resources are subdivided to reflect different levels of geological confidence into measured (highest geologic assurance), indicated, and inferred (lowest geologic assurance). Please refer to the Glossary of Abbreviations and Definitions for the meanings ascribed to these terms. The definition of mineral (frac sand) reserve provided by S-K 1300 is: Mineral reserve is an estimate of tonnage and grade or quality of indicated and measured mineral resources that, in the opinion of the qualified person, can be the basis of an economically viable project. More specifically, it is the economically mineable part of a measured or indicated mineral resource, which
6-2 JOHN T. BOYD COMPANY includes diluting materials and allowances for losses that may occur when the material is mined or extracted. Estimates of frac sand reserves are subdivided to reflect geologic confidence, and potential uncertainties in the modifying factors, into proven (highest assurance) and probable. Please refer to the Glossary of Abbreviations and Definitions for the meanings ascribed to these terms. Figure 6.1 shows the relationship between rac sand resources and frac sand reserves. Figure 6.1: Relationship Between Frac Sand Resources and Frac Sand Reserves In this report, the term “frac sand reserves” represent the tonnage of frac sand products that meets customer specifications and will be available for sale after processing of the ROM sand. 6.2 Frac Sand Resources 6.2.1 Methodology BOYD independently prepared estimates of in-place frac sand resources for the Blair Mine, as of December 31, 2025, by performing the following tasks: 1. Available drilling logs and testing results were reviewed to check for accuracy and to support development of the geologic model. The geologic database utilized 12 drill holes with complete information, including particle size distribution data, overburden
6-3 JOHN T. BOYD COMPANY thickness, and sand thickness data. The data were imported into Carlson Software, a geologic modeling and mine planning software suite that is widely used and accepted by the mining industry. 2. A geologic model of the deposit was created in Carlson Software using industry-standard grid modeling methods well-suited for simple stratigraphic deposits. The geologic model delineates the top and bottom of overburden material, and the mineable sand horizon and distribution of the product size fractions throughout the deposit. The top and bottom of the mineable frac sand interval was established thusly: a. Aerial mapping as of August 29, 2025, in combination with provided drilling data, was used as the basis for estimating the remaining overburden and sand volumes and associated product distribution in the Carlson geologic modeling program. b. As there are varying amounts of overburden material across the property, ranging from 1 ft to 106 ft in thickness, the top of the mineable sand interval was defined as the base of the overburden material above the Wonewoc Sandstone Formation. c. The bottom of the mineable sand interval was based primarily on the approved mining reclamation plan, which sloped from approximately 940 ft amsl on the eastern portion of the property to 920 ft amsl on the western portion of the property. 3. After reviewing the continuity of the deposit, suitable resources classification criteria were developed and applied, which are further discussed in Section 6.2.2. 4. BOYD then reviewed the proposed mining regions identified by Smart Sand’s mine plan, and the approved reclamation permit. A viewshed area was incorporated, which involved leaving an earthen berm constructed mainly of overburden and topsoil around the property in order to maintain a shielded view of the future mine from local roadways. Certain areas on the property were excluded from being considered as mineable, such as those that had waste impoundments and stormwater ponds, processing facilities, as well as those areas underlying the property boundary viewshed. Estimation of the in-place resources assumes mining operations using standard surface excavation equipment, which is widely utilized for mining of similar deposit types. Estimates were subject to the following setbacks and slope requirements: a. Mining offsets are required to be observed inside of the entire property boundary for a surface mining operation and are specified in the approved mining permits. The Blair Operation straddles two counties, each requiring different property offsets be observed: • A 100 ft property setback is required in Trempealeau County. • A 200 ft property setback is required in Jackson County.
6-4 JOHN T. BOYD COMPANY b. A vertical final pit highwall was assumed in BOYD’s model, for the following reasons: • The mineable Wonewoc Sandstone Formation outcrops along nearly the entire western portion of the Blair property, while most of the eastern portion of the mine property will require a pit highwall remain in place. Smart Sand management specified mining to a final slope of 80 degrees in their mine plan in areas where a final highwall will be required to remain. • BOYD assigned additional in-pit mining losses for this estimate (90% mining recovery, discussed further in Section 6.3.1) to account for the slope differential, and remain conservative in our estimate of mineable resources. 5. In-place volumes for each of the proposed mining blocks were calculated from the geologic model within Carlson Software, and an in-place dry sandstone density of 118.5 pounds per cubic foot was used to convert the in-place sand volumes to tonnages. 6. BOYD then utilized provided production data to reconcile the estimate from the date of volumetric estimate to December 31, 2025. 6.2.2 Classification Geologic assuredness is established by the availability of both structural (thickness and elevation) and quality (size fraction) information for the deposit. Resource classification is generally based on the concentration or spacing of exploration data which can be used to demonstrate the geologic continuity of the deposit. When material variations in thickness, depth, and/or sand quality occur between drill holes, the allowable spacing distance between drill holes is reduced. The following drill hole spacing criteria were established by BOYD after reviewing the available exploration data and geologic model, and were used to classify the frac sand resources of the Blair Mine as shown in Table 6.1, below: Table 6.1: Blair Property Drill Hole Spacing Parameters Resource Classification Spacing Requirement (ft) (Nominal Maximum) Measured 2,000 Indicated 4,000 Inferred 8,000 BOYD has classified all of the estimated frac sand resources within the defined mineable areas of the Blair property as Measured based on drilling density and the low geologic complexity of the deposit. BOYD is of the opinion that there is a low degree of uncertainty associated with the resource classification.
6-5 JOHN T. BOYD COMPANY 6.2.3 Estimation Criteria Development of the frac sand resource estimates for the Blair Mine assumes mining and processing methods and equipment that have been utilized successfully at the operation for several years. The target mining horizon manifests as a continuous sand unit exhibiting relatively consistent depth, thickness, and quality. There is relatively little overburden, and the high-quality sand is easily distinguished from the overlying waste interval; as such, interpretation of the mineable horizon is relatively easy to distinguish. Mined sand is processed to remove out-size materials (i.e., sand which is either too coarse or silts/fines which cannot be sold) and produce saleable finish frac sand products. The amount of finished sand produced as a percentage of the raw sand mined is referred to as the processing yield (or plant yield), which is analogous to the “cut-off grade” of other mining operations. If the expected processing yield of the sand is too low, the cost of production will outweigh sales revenues and the deposit cannot be economically mined. The minimum processing yield—based on historical and forecasted economics (refer to Chapter 10 through 12)—for the Blair Mine is estimated to be 35%. It should be noted that the cut-off grade is well below the expected processing yield of the deposit. Other limiting criteria, such as minimum mining thickness or maximum stripping ratio (the ratio of waste to sand excavated) generally do not negatively impact the economics of the Blair Mine when considering the results of the geologic data and overall mine planning used to estimate the surface mineable frac sand resources. The limits of the frac sand resources are constrained to those portions of the interpreted sand deposit that: • Are reasonably defined by available drilling and sampling data. • Contain products that meet generally accepted specifications and can be sold at a profit (i.e., be economic). • Honor any legal mining constraints (e.g., property boundaries, environmental setbacks, utility and infrastructure setbacks, etc.). • Adhere to physical mining limitations. Frac sand resources for the Blair Mine are assessed for reasonable prospects for eventual economic extraction by reporting: (1) those resources which have been subsequently converted to frac sand reserves after the application of all material modifying factors, and/or (2) those resources which have similar characteristics (i.e.,
6-6 JOHN T. BOYD COMPANY mining conditions, and expected processing yields and qualities) to those converted to frac sand reserves. The criteria employed in developing the estimates of frac sand resources for the Blair Mine is supported by historical results and align with those employed at similar operations. As such, it is BOYD’s opinion that the stated criteria are reasonable and appropriate for the estimation of frac sand resources at the Blair Mine. 6.2.4 Frac Sand Resource Estimate There are no reportable frac sand resources excluding those converted to frac sand reserves for the Blair Mine. Quantities of frac sand controlled by Smart Sand within the defined boundaries of the Blair property which are not reported as frac sand reserves are not considered to have potential economic viability; as such, they are not reportable as frac sand resources. 6.2.5 Validation BOYD independently estimated in-place frac sand resources for the Blair Mine based on the provided drilling, sampling, and testing data obtained. Utilizing industry-standard grid modeling techniques we have estimated volumes of frac sand indicated by the available data. Based on our review of the information provided, we are of the opinion that the data provided are reasonable and appropriate. Furthermore, it is our opinion that the estimation methods employed are both appropriate and reasonable for the deposit type and proposed extraction methods. 6.3 Frac Sand Reserves 6.3.1 Methodology Estimates of frac sand reserves for the Blair Mine were derived contemporaneously with estimates of frac sand resources. To derive an estimate of saleable product tons (proven frac sand reserves), the following modifying factors were applied to the in-place measured frac sand resources underlying the respective mine plan areas: • A 90% mining recovery factor was applied, which assumes that 10% of the in-place frac sand resource will not be recovered for various reasons. Applying this recovery factor to the in-place resource results in the estimated ROM sand tonnage that will be delivered to the wet process plant. • An overall 75% processing recovery was applied, which accounts for losses in the wet and dry plants as a result of removing out-sized (i.e., larger than 20-mesh and smaller than 140-mesh) sand, as well as considering losses in the wet and dry
6-7 JOHN T. BOYD COMPANY processing plants due to minor inefficiencies. Processing recoveries were based on a combination of laboratory testing data and historic production data available from the Blair operation. The overall product yield (after accounting for mining and processing losses) for the Blair Operation is estimated at 67.5%. That is, for every 100 tons of in-place frac sand resources mined, approximately 67.5 tons will be able to be recovered and sold as product. 6.3.2 Classification Proven frac sand reserves are derived from Measured frac sand resources, in accordance with S-K 1300. BOYD is satisfied that the frac sand reserve classification reflects the outcome of technical and economic studies. Figure 6.2, on the following page, illustrates the reserve classification of the Blair Property frac sand deposit.
TB-1 TB-2 TB-3TB-4 TB-5 TB-6 TB-7 TB-8 TB-9 EW-9 TB-10 TB-11 PW-B2 MW-B3S 6-8 0 0.5 1 Miles Dry Plant/ Rail Loadout Wet Plant Conveyor February 2026 Scale 1" = .5 Miles John T. Boyd Company Prepared for SMART SAND, INC FIGURE 6.2 TOPOGRAPHIC MAP Showing PROVEN AND PROBABLE RESERVES BLAIR MINE Jackson and Trempealeau Cos., Wisconsin A A' Legend Property Boundary Proven Reserves Drill Hole Location TB-1 Mine Extent Cross Section Location - See Figure 4.2 For Detail Q :\E N G _W P \3 55 5. 02 6 S S - O ak da le F Y 25 \B JM \W or km ap \W or km ap .a pr x Active Pit
6-9 JOHN T. BOYD COMPANY 6.3.3 Frac Sand Reserve Estimate BOYD’s estimate of surface mineable frac sand reserves for the Blair Mine totals 108.8 million saleable product tons, as of December 31, 2025. Estimated frac sand reserve tons reported in Table 6.2, below, are based on a LOM plan which, in BOYD’s opinion, is technically achievable and economically viable after the consideration of all material modifying factors. The reported reserves include only frac sand which is owned in fee by Smart Sand, as of December 31, 2025. The frac sand reserves at the Blair Mine are well-explored and defined. It is our conclusion that all the stated reserves can be classified in the Proven reliability category (the highest level of assurance). The Blair Mine, and other proppant sand operations in the area, have a well-established history of mining and selling frac sand products into the various energy basin fields. BOYD has assessed that sufficient studies have been undertaken to enable the frac sand resources to be converted to frac sand reserves based on current and proposed operating methods and practices. Changes in the factors and assumptions employed in these studies may materially affect the frac sand reserve estimate. The estimated product distribution of the frac sand reserves is based on available laboratory gradation test data provided by Smart Sand. Grain size distribution and overall yields may vary based on the depth and location at which mining occurs. The economic viability of the stated frac sand reserves is demonstrated by the production and financial projections and marketing information presented in Chapters 10 through 12 of this report. The forecasted sales price used in the estimation of frac sand reserves for the Blair Mine is estimated to be $24.96 per ton of finished frac sand (refer to Section 10.5 and Table 12.1 for further details). Mesh Size Proven Probable Total 20/40 38,922 - 38,922 40/70 51,989 - 51,989 70/140 17,924 - 17,924 Total 108,835 - 108,835 Table 6.2: Blair Mine Frac Sand Reserves as of December 31, 2025 Product Tons (000) by Classification
6-10 JOHN T. BOYD COMPANY 6.3.4 Significant Risks and Uncertainties The extent to which the frac sand reserves may be affected by any known geological, operational, environmental, permitting, legal, title, variation, socio-economic, marketing, political, or other relevant issues has been reviewed as warranted. It is the opinion of BOYD that Smart Sand has appropriately mitigated, or has the operational acumen to mitigate, the risks associated with these factors. BOYD is not aware of any additional risks that could materially affect the development of the frac sand reserves. Given the data available at the time this report was prepared, the estimates presented herein are considered reasonable. However, they should be accepted with the understanding that additional data and analysis available after the date of estimate may result in changes to the current estimate. These revisions may be material. Based on our independent estimate and operations review, we have a high degree of confidence that the estimates shown in this report accurately represent the available frac sand reserves controlled by Smart Sand at the Blair Mine, as of December 31, 2025. 6.3.5 Reconciliation with Previous Estimates Figure 6.3, on the following page, illustrates the reconciliation between the December 31, 2021, frac sand reserve estimate of 115.3 million tons and the current frac sand reserve estimate of 108.8 million tons. The largest contributor to the reduction was mining depletion, which accounted for a decrease of approximately 3.6 million tons (3.2%), reflecting normal extraction of reserves during the reporting period. In addition, an estimate revision resulted in a further decrease of approximately 2.8 million tons (2.4%), due to updated surface topography and refinement of reserve boundaries. The combined effect of these changes resulted in a total reserve decrease of 6.4 million tons, or approximately 5.6%, compared to the prior estimated
6-11 JOHN T. BOYD COMPANY Figure 6.3: Reconciliation with Previous Frac Sand Reserve Estimate Q:\ENG_WP\3555.028 SS - Blair FY25\WP\Report\CH-6 - Mineral Resources and Reserves.docx
7-1 JOHN T. BOYD COMPANY 7.0 MINING OPERATIONS 7.1 Mining Method The Blair property is roughly bisected by the S River Road, which separates the mine into northern and southern sections. The office, wet processing plant, maintenance buildings, and mine site in the southern sections, while the dry processing plant and unit train loadouts are in the northern sections of the property. The northwestern portion of the Blair Mine’s deposit generally consist of sandstone outcrops and minimal-to-no overburden. This area served as the initial mining area. Current mining operations are located just south of the wet plant. Figure 6.2 (page 6-8) shows the active mining area located just south of the wet plant. Mining will progress in a northwest-to-southeast direction until all current reserves are exhausted. As mining progresses to the southeast, the overburden thickness increases, averaging approximately 30 ft throughout the extent of the property. Overburden consists of a combination of soil, clay and clay-sandstone that is drilled and blasted prior to removal and being placed into stockpiles on site for eventual reclamation. Mining is conducted utilizing typical excavator and articulated truck methods. Mining consists of drilling and blasting 55 ft high benches, starting near the hilltops and working downward. The Wonewoc Formation Sandstone is drilled and blasted on a very wide pattern to “fluff” or disaggregate the sand grains. Drilling and blasting are contracted to a third-party vendor and are performed on an as needed basis. Excavated sand is then hauled to the wet process plant located on the northern portion of the property for initial processing. Active mining pits are dewatered as needed, and the water is pumped into a holding pond near the active mining area prior to sampling and discharging. Current mine planning and exploration drilling have projected mining to a base elevation of approximately 925 ft above mean sea level. Figure 7.1, on the following page, illustrates a previously mined area of the Blair Mine.
7-2 JOHN T. BOYD COMPANY Figure 7.1: Mined Area at Blair Mine. 7.2 Mine Schedule, Equipment, and Staffing Mining operations typically occur from mid-March to mid-November while temperatures are above freezing. The mine is scheduled to operate four days a week, running two back-to-back eight-hour shifts consecutively. A Friday shift can be added if required. The schedule is highly dependent on product demand and is adjusted on an as needed basis. The primary pit mobile equipment involved in sand excavation includes: • Cat 988 loaders. • Cat 982 loaders. • Volvo A45 haul trucks. • Cat 745 haul trucks. • Cat 390 excavator. • Cat 349 excavator. • Volvo 480 excavator.
7-3 JOHN T. BOYD COMPANY In addition, there are numerous support vehicles (maintenance trucks, skid steers, water truck, etc.) to complement the fleet. 7.3 Engineering and Planning The primary mine planning consideration is the safe, economical, and regular supply of raw high-quality sand feed to the processing plants. In commercial mining terms, the quantities of overburden removed, and sand excavated each year at the Blair Mine is considered modest. Mining plans are relatively simple and very flexible; able to be modified based on demand in a relatively short time frame. The sand deposit is relatively competent, and the mining depths are relatively shallow. As a result, slumping, or collapsing, has not been and is not expected to be a detriment to mining operations. Flooding of the mine’s pits may occur, but is considered manageable with existing pumping equipment. 7.4 Mine Sequence and Production Historical mine production has ranged from 1.5 to 2.3 million ROM tons over the last three years, reflecting adjustments in mining rates consistent with operational planning and reserve management. Forecast mine production is projected to range from approximately 2.8 million ROM tons in 2026 to approximately 4.1 million ROM tons by 2030, after which production is expected to remain relatively constant over the remaining life of the mine. This forecast production profile is consistent with the demonstrated capabilities of the existing mining fleet and processing infrastructure and reflects a sustainable, steady-state operating plan aligned with the long-term capacity of the operation. The key driver of the mining operations is the adequate supply of feed material to the Blair Mine’s processing plants. At the projected LOM production rates, the Blair operation has an expected mine life of approximately 41 years. Future mine production, and hence the longevity of the mine, is directly related to the energy market demand for frac sand. Actual yearly production volumes may, and are likely to, fluctuate significantly based on this demand. The areal extents of the remaining mining areas (as shown in Figure 6.2, on page 6-8) and the geologic characteristics of the sand deposit afford the Blair Mine a great deal of
7-4 JOHN T. BOYD COMPANY operational and planning flexibility. Generally, mining operations are expected to advance in blocks outwards from the processing plant areas to minimize haul distances and expand waste storage capacity. It is BOYD’s opinion that the forecasted production levels for the Blair Mine are reasonable, logical, and consistent with typical sand surface mining practices in the region. 7.5 Mining Risks Surface mines face two primary types of operational risks. The first category of risk includes those daily variations in physical mining conditions, mechanical failures, and operational activities that can temporarily disrupt production activities. Several examples are as follows: • Water accumulations/soft floor conditions. • Process water shortages. • Power curtailments. • Variations in grain size consistency. • Encountering excessive clay and other waste material. • Failures or breakdowns of operating equipment and supporting infrastructure. • Weather disruptions (power outages, dust storms, excessive heat etc.). The above conditions/circumstances can adversely affect production on any given day but are not regarded as “risk issues” relative to the long-term operation of a mining entity. Instead, these are considered “nuisance items” that, while undesirable, are encountered on a periodic basis at many mining operations. BOYD does not regard the issues listed above as being material to the Blair Mine operations or otherwise compromising its forecasted performance. The second type of risk is categorized as “event risk.” Items in this category are rare, but significant occurrences that are confined to an individual mine, and ultimately have a pronounced impact on production activities and corresponding financial outcomes. Examples of event risks are major fires or explosions, floods, or unforeseen geological anomalies that disrupt extensive areas of proposed or operating mine workings and require alterations of mining plans. Such an event can result in the cessation of production activities for an undefined but extended period (measured in months, and perhaps years) and/or result in the sterilization of proppant sand reserves. This type of risk is minimal in a relatively simple surface sand mining operation. Q:\ENG_WP\3555.028 SS - Blair FY25\WP\Report\CH-7- Mining Operations.docx
8-1 JOHN T. BOYD COMPANY 8.0 PROCESSING OPERATIONS 8.1 Processing Method Frac sand processing at the Blair Mine typically comprises the following three major components: • Wet Plant – ROM material from the pit is delivered to the wet plant where the oversize (e.g., gravel) and slime (e.g., fine sand and silt) material is removed. The wet plant does not crush the material, but predominantly scrubs (i.e., washes) and classifies (i.e., sizes) the raw feed material. • Dry Plant – The damp WIP material produced by the wet plant is dried and screened/sorted into finished products. • Storage and Loadout – Finished products are stored in silos and are discharged via gravity from the bottom of the silos onto a belt system that feeds the on-site rail loadout for transport on the CN rail line. The Blair Mine commenced operations in 2016. Processing facilities consist of a wet processing plant, a dry processing plant and a rail loadout facility. ROM sand material is hauled to the wet processing plant via articulated trucks and then conveyed to the dry processing plant on the northern property before being stored and loaded onto rail. The overall operation has an approximate annual finished product capacity of 2.9 million tons and is staffed by approximately 54 employees. The number of employees can fluctuate based on product demand. 8.1.1 Wet Plant Figure 8.1, on the following page, shows the wet plant where material between 20-mesh and 140-mesh is classified and conveyed to the dry process plant. Waste material (<140-mesh fines and oversize) are placed back into a plastic lined tailings pond east of the wet processing plant. The wet plant utilizes typical screen-hydrosizer-cyclone classification and dewatering technology and has an ultrafine circuit and thickener, and operates 4-5 days a week, 16 hours a day, typically between March and November. The wet plant and mine shut down during winter when consistent below-freezing temperatures makes utilizing the wet plant unfavorable. The nominal capacity of the wet plant is approximately 400 tph of ROM sand.
8-2 JOHN T. BOYD COMPANY Figure 8.1: Blair Wet Processing Plant 8.1.2 Decant/Dry Plant WIP (20/140-mesh) material is conveyed to a storage shed for dewatering prior to entering the dryer. A drag chain arrangement reclaims dryer sand from the top of the decant pile and conveys the sand to two 200 tph natural gas fired dryer. Dry sand is then screened into predominantly 20/40-mesh, 30/50-mesh, 40/70-mesh, and 50/140-mesh (100-mesh) finished products before being conveyed to storage silos and loaded onto railcars. The dry plant operates 24 hours per day, 365 days a year, requiring a sufficient stockpile of WIP material to be stockpiled during the regular operating season. 8.1.3 Storage and Loadout Finished frac sand products are stored in five 5,000-ton loadout silos. All products leave the plant via rail serviced by the CN rail line. Figure 8.2, on the following page, shows the Blair Mine’s rail loadout and silos.
8-3 JOHN T. BOYD COMPANY Figure 8.2: Rail Loadout and Silos 8.2 Production Since commencing operation at the Blair Mine in 2023, annual finished sand production has ranged from 1.6 million tons to 1.7 million tons. Forecast finished sand production is projected to range from approximately 1.9 million tons in 2026 to approximately 2.8 million tons by 2030, after which production is expected to remain relatively constant over the remaining life of the operation. This forecast production rate is consistent with the demonstrated capacity and performance of the existing processing facilities, including crushing, washing, drying, and classification circuits, and reflects a sustainable steady-state throughput level that can be reliably maintained over the long term. 8.3 Processing Risks BOYD is unaware of any reported interruptions, outages, shortages, or failures related to processing operations that have materially affected the Blair Mine. Given the operation is well-established, we opine that there is a low risk of such events materially affecting the estimates of frac sand reserves presented herein.
8-4 JOHN T. BOYD COMPANY Based on our review, it is BOYD’s opinion that the processing methods and existing equipment at the plant are sufficient for the forecasted production of finished frac sand products. Q:\ENG_WP\3555.028 SS - Blair FY25\WP\Report\CH-8 - Processing Operations.docx
9-1 JOHN T. BOYD COMPANY 9.0 MINE INFRASTRUCTURE 9.1 Overview All of the basic infrastructure required for the ongoing operation of the Blair Mine is in place. Figure 6.2 (page 6-8) illustrates the general layout of the infrastructure at the subject operation. Surface facilities currently located on the Blair Property are well constructed and have the necessary capacity/capabilities to support Smart Sand’s near-term operating plans. Operational preference may lead to the upgrading of some existing facilities if the operation expands in the future. BOYD is unaware of any reported interruptions, outages, shortages, or failures to infrastructure requirements that have materially affected the Blair Mine’s operations. Given the operation is well-established, we opine that there is a low risk that such events would materially affect the estimates of frac sand reserves presented herein. 9.2 Transportation The Blair Mine is serviced by several roads maintained by the local municipality, county, and state governments. These roads are either paved or well-maintained graded roadways. Road access is available year-round. Blair has an on-site rail loadout and rail siding with a capacity of several hundred railcars. Finished frac sand products are transported via direct rail access to the CN rail line. 9.3 Utilities The Blair Mine is serviced by various utilities that are routed along the CN rail corridor, which along the northern property line. We Energies, (a subsidiary of WEC Energy group) provides natural gas supply for the drying equipment, and Xcel Energy provides three phase electrical power via a high voltage line that is supplied to the Blair Operation though above and below ground electrical lines.
9-2 JOHN T. BOYD COMPANY Plant process water is supplied by three wells drilled on the property in addition to the water collected in the pit and ponds. Wash process water is recycled after fines are removed via settling with a flocculent in a thickener before being placed into a constructed pond. Potable water is provided by one of the onsite wells which is purified for consumption. Additionally, bottled water and jugs are provided for staff. 9.4 Tailings Disposal The mining and processing of frac sand at the Blair Mine creates a substantial amount of tailings (i.e., waste material). These tailings are typically a mixture of clay, very fine sand, and other non-silica minerals. As the mine progresses, silt ponds are constructed in mined-out areas, where the solid materials settle to the bottom and water may be recovered for reuse. 9.5 Other Structures and Facilities On-site facilities include a scale house, office, shop, and a quality laboratory located in the dry process plant. Q:\ENG_WP\3555.028 SS - Blair FY25\WP\Report\CH-9 - Infrastructure.docx
10-1 JOHN T. BOYD COMPANY 10.0 MARKET ANALYSIS 10.1 Market Background The modern North American frac sand industry emerged alongside the shale oil and gas revolution of the mid-2000s, when horizontal drilling and multi-stage hydraulic fracturing dramatically increased demand for high-quality proppant. Early shale completions placed a premium on high crush strength and proppant conductivity, which positioned NWS— sourced primarily from high-purity quartz formations in Wisconsin and Minnesota—as the industry’s benchmark material. NWS deposits such as the Saint Peter, Jordan, Wonewoc, and Mount Simon sandstones exhibit excellent sphericity, roundness, and >99% quartz content, characteristics that deliver superior performance under high closure stresses. As a result, NWS dominated the market through the early 2010s and was shipped via unit trains to every major unconventional basin, despite significant transportation costs associated with 1,000 to 1,500-mile rail hauls. Following the 2014–2016 oil price collapse, operators shifted from quality-driven to cost-optimized completion designs, accelerating adoption of high-proppant-intensity fracturing and longer laterals. This sharply increased total proppant mass per well and magnified logistics as a cost driver—often more than half of delivered sand cost in the Permian was attributable to transportation rather than mine-gate pricing. In response, the industry began developing regional or in-basin sands that could be trucked short distances from the mine to the well pad. Texas brown sands and analogous formations in Oklahoma and the Haynesville provided sufficient crush strength for many reservoir stress environments, even though they lacked the conductivity profile of NWS. Between 2016 and 2019, more than 20 new in-basin mines were constructed in the Permian alone, creating substantial overcapacity and dramatically reducing dependence on Midwestern supply. Industry analysts describe this period as a structural market realignment, with Permian in-basin penetration rising toward 70 to 80% of total proppant demand by 2019. The result is a bifurcated market architecture that persists today. In-basin sand now serves as the volume backbone for most major oil-dominant basins, driven by logistics efficiency, last-mile delivery integration, and reduced total well cost. Mine-gate pricing and transportation networks have become strategic differentiators, with infrastructure innovations—such as West Texas overland conveyor systems—further reducing reliance on long-haul rail. Meanwhile, NWS functions as a performance-oriented niche product, selected for wells with elevated closure stresses, complex fracture geometries, or estimated ultimate recovery (EUR) sensitive economics where conductivity degradation
10-2 JOHN T. BOYD COMPANY from regional sands may be unacceptable. Recent technical assessments indicate that while in-basin sands meet operational requirements for most Permian completions, NWS retains measurable conductivity and permeability retention advantages that can translate to improved long-term recovery in certain reservoir conditions. The competitive relationship between NWS and in-basin producers is best described as selective substitution rather than universal displacement: • In-basin producers dominate on delivered cost, making them the default choice for most high-volume Permian and Haynesville completions. • NWS maintains a defensible niche in wells with elevated closure stress, complex fracture networks, or high EUR sensitivity, where conductivity degradation from lower-quality sands may materially impact long-term production. • Supply elasticity differs sharply – in-basin suppliers expand and contract capacity quickly, whereas NWS supply is slower to adjust, leading to different pricing cycles across segments. • Vertical integration is a growing differentiator, with in-basin suppliers capturing value through last-mile logistics and storage, while NWS suppliers increasingly rely on strategic partnerships with railroads, terminals, and pressure pumpers to stabilize demand. Basin‑level competitive dynamics in frac sand markets are driven mainly by differences in logistics, cost structures, and sand quality relative to specific shale plays: Appalachia (Marcellus/Utica) • NWS retains strong share due to geological requirements and proximity to Midwestern supply. • Limited local sand resources of comparable quality. Bakken • Combination of NWS and regional sands; long rail distances common. • Delivered cost is competitive versus trucking local alternatives across North Dakota. Duvernay • Oil window – regional sands increasingly adopted for cost efficiency. • Deep gas window – NWS remains preferred due to high stress. Eagle Ford • Mixed NWS and regional sands historically; increasing in-basin supply reducing NWS share.
10-3 JOHN T. BOYD COMPANY • Logistics costs remain material due to dispersed well locations. Haynesville • High pressure environment increases NWS relevance, but many wells still use in- basin sand for cost reasons. • Delivered-cost advantages strongly influence procurement decisions. Montney • Among North America’s deepest unconventional plays. • NWS remains the primary proppant due to crush-strength requirements. • Regional Canadian sands are used selectively in shallower Montney benches. Permian Basin • In-basin sand has >80% market share. • NWS used only for selective high-stress benches or operator-specific conductivity programs. • Logistics integration (trucking fleets, silos, conveyors) is the dominant competitive advantage. 10.2 Historical Sales Smart Sand supplies a range of frac sand products to major oilfield services companies and E&P companies operating in various North American oil and gas basins. Recent historical sales data (on a consolidated basis) provided by Smart Sand are summarized in Table 10.1, below. 2021 2022 2023 2024 2025 Product Sales (000 tons): Oakdale 2,350 3,386 3,353 3,534 3,551 Ottawa 839 945 790 566 582 Blair - - 402 1,150 1,309 Total 3,189 4,330 4,545 5,250 5,442 Net Sand Revenue ($ 000) 61,383 126,662 144,801 160,653 143,026 Average Selling Price ($/ton sold) 19.25 29.25 31.86 30.60 26.28 Note: Totals may not sum due to rounding. Net Sand Revenue and Average Selling Price are at the mine-gate. Table 10.1: Historical Sales Data
10-4 JOHN T. BOYD COMPANY As shown in Figure 10.1, below, almost 85% of Smart Sand’s sales in 2025 were of 40/70 and 100 Mesh frac sand. Figure 10.1: Frac Sand Sales by Mesh Size In 2025, almost 68% of Smart Sand’s finished frac sand was destined for the Marcellus and Bakken basins (as shown in Figure 10.2, below). Figure 10.2: Frac Sand Sales by Basin/Play Smart Sand has structured long-term contracts with some customers outlining volume commitments and, in some cases, fixed pricing. Smart Sand also services customers on a spot basis where volume thresholds are not set, and orders are serviced on an
10-5 JOHN T. BOYD COMPANY as-available basis at prevailing market prices. In 2025, contract sales accounted for almost 69% (on a tonnage basis) of all frac sand sales for Smart Sand. In 2025, the top five customers (by sales volume) accounted for over 62%of total sales for Smart Sand, while the top ten customers accounted for over 86% of total sales. 10.3 Market Outlook NWS remains a critical proppant for high-performance completions in oil and gas wells, particularly in deep or high-stress reservoirs. While in-basin sand dominates bulk volumes, NWS continues to hold a defensible position where premium proppant performance is essential. The following outlines BOYD’s demand, supply dynamics, pricing expectations, and key market risks from the NWS perspective. Demand Outlook • Baseline demand for NWS remains stable, driven by its use in wells requiring high- performance proppant, such as deeper or stress-critical reservoirs. • Moderate growth is expected from increased completion intensity (lb/ft) and wider adoption of simul-frac techniques, which can raise sand consumption per crew per day. • NWS demand is less sensitive to rig count fluctuations than in the past because wells with longer laterals and more stages still require performance-critical proppant in smaller quantities. Supply Outlook • NWS supply remains constrained by permitting challenges, limited high-quality deposits, and the declining share of key oil plays. • Expansion potential is limited; few deposits can economically supply performance- critical sand in large volumes. • This constrained supply supports stable premium pricing and reinforces NWS as a niche but essential component in completions that demand superior proppant performance. Balance & Pricing • Market conditions are expected to be balanced to slightly oversupplied for in-basin sands, while NWS retains its premium position. • Pricing for NWS should remain stable, with periodic uplifts linked to deeper or higher-stress drilling activity. • Delivered-cost differentials continue to shape procurement, ensuring that NWS maintains a selective but high-value role in completions.
10-6 JOHN T. BOYD COMPANY Downside Market Risks • Reduced drilling or completion activity in high-spec wells could compress NWS demand. • Improved in-basin proppants that encroach on NWS performance could challenge market share. • Logistical constraints, regulatory hurdles, or environmental compliance issues could impact supply consistency or cost. Upside Market Opportunities • Increases in completion intensity or longer lateral lengths could boost per-well NWS consumption. • Renewed demand for high-performance proppants in deeper or more challenging reservoirs could tighten NWS availability. • Supply chain or regional logistical bottlenecks may elevate delivered pricing and improve margins for NWS producers. • Technology adoption in transportation and last-mile delivery could create competitive advantages for integrated NWS suppliers. NWS is unlikely to reclaim historical market share for bulk sand but will remain critical where premium performance is non-negotiable. 10.4 Market Entry Strategies As an existing producer with a lengthy commercial history and established customer base, it is BOYD’s opinion that market entry strategies are not required for continued sale of the Blair Mine’s frac sand products. 10.5 Future Sales BOYD’s projections of sales volumes and frac sand prices for the Blair Mine are informed by Smart Sand’s historical operating results, their budget forecasts, and our knowledge of frac sand markets. Forecasted prices are based on sales of various sizes (e.g., 30/50, 40/70, and 70/140-mesh) of finished frac sand. Our frac sand sales forecast for the Blair Mine is provided in Table 10.2, on the following page.
10-7 JOHN T. BOYD COMPANY BOYD is not aware of any material contracts for the sale of frac sand from the Blair Mine. Q:\ENG_WP\3555.028 SS - Blair FY25\WP\Report\CH-10 - Market Analysis.docx Sales Average Selling Price Year(s) (000 tons) ($/ton) 2026 1,879 24.96 2027 2,067 24.96 2028 2,274 24.96 2029 2,501 24.96 2030 2,751 24.96 2031 2,751 24.96 2032 2,751 24.96 2033 2,751 24.96 2034 2,751 24.96 2035 2,751 24.96 2036–2066 83,608 24.96 Total 108,835 Minimum 24.96 Maximum 24.96 Average 24.96 Table 10.2: Frac Sand Sales Forecast
11-1 JOHN T. BOYD COMPANY 11.0 CAPITAL AND OPERATING COSTS 11.1 Basis of Capital and Operating Cost Estimates The production and unit cost estimates for the Blair Mine are informed by Smart Sand’s historical performance and internal budget forecasts, in combination with BOYD’s familiarity with mining costs at similar operations. Operating volumes are well-defined and understood, as are mining and processing productivities at the Blair operation. As such, it is BOYD’s opinion that the production and financial projections are reasonable for an operating mine and are likely to be within ±20% accuracy level. This section contains forward-looking information related to capital and operating cost estimates for the Blair Mine. There are inherent known and unknown risks and uncertainties associated with all mining operations. These risks, uncertainties, and other factors are not quantifiable, but include, and are not limited to, adverse general economic conditions, operating hazards, inherent uncertainties in interpreting engineering and geologic data, fluctuations in commodity prices and prices for operational services, government regulation and political risks, as well as other risks commonly associated with the mining industry. 11.2 Capital Expenditures 11.2.1 Historical Capital Expenditures Historical capital expenditures have consisted primarily of sustaining capital required to maintain production capacity and supporting infrastructure at the Blair Mine. Discretionary capital has been limited and generally directed toward incremental improvements, equipment upgrades, and operational optimization initiatives, rather than material expansion or development activities. Capital expenditures at the Blair Mine over the last two years are summarized in Table 11.1, below. 2024 2025 Capital Expenditures ($ 000) 894 2,066 Capital Expenditures ($/ton sold) 0.78 1.56 Table 11.1: Historical Capital Expenditures
11-2 JOHN T. BOYD COMPANY 11.2.2 Projected Capital Expenditures The Blair Mine is currently in steady-state production and is not dependent on significant development or expansion capital to maintain planned output levels. Forecast capital expenditures are limited primarily to sustaining capital required to maintain equipment, infrastructure, and production capacity over the life of mine. Other capital expenditures are largely discretionary in nature and relate to optimization, efficiency improvements, or potential expansions. Accordingly, continued operations are not contingent upon material additional capital investment beyond normal sustaining requirements. Projected capital expenditures for the Blair Mine over the next five years are summarized in Table 11.2, below. BOYD projected annual sustaining capital expenditures after 2030 at a unit cost of $0.73 per ton sold, this includes maintenance of production equipment as well as other items, for the operation. This factor is based on our judgment and experience with similar operations. 11.3 Operating Costs 11.3.1 Historical Operating Costs Operating costs (i.e., cash production costs) comprise all site-level cash expenditures incurred in the extraction, processing, and production of the finished frac sand products. These costs include mining and processing activities, site-specific general and administrative expenses (including non-income taxes, fees, and royalties), and ongoing reclamation. Cash production costs at the Blair Mine over the last two years are summarized in Table 11.3, on the following page. 2026 2027 2028 2029 2030 Capital Expenditues ($ 000) 2,000 2,000 2,000 2,000 2,000 Capital Expenditues ($/ton sold) 1.06 0.97 0.88 0.80 0.73 Table 11.2: Forecasted Capital Expenditures
11-3 JOHN T. BOYD COMPANY 11.3.2 Projected Operating Costs Future operating cost estimates were developed based on recent actual costs and considering specific operational activity levels and cost drivers. The estimates consider current and expected labor headcount and salaries, major consumables and unit prices, power costs, and equipment and maintenance costs. The total operating cost estimate includes all site costs related to mining, processing, loading, and site-specific general and administrative expenses (including non-income taxes and fees). Excluded from the projected operating costs are: (1) allocated corporate selling, general, and administrative (SG&A) expenses; and (2) production royalties. As shown in Table 11.4, on the following page, The Blair Mine’s projected operating costs are expected to remain relatively consistent (on an uninflated basis) with 2025 results. As such, the projected total cash production cost over the life of the mine averages $12.38 per ton sold over the life of the mine. As the operation is in a steady state, BOYD considers the future operating cost estimates to be reasonable and appropriate. 2024 2025 2024 2025 Cash Production Costs: Mining 4,388 5,372 3.81 4.05 Production 2,163 10,616 1.88 8.00 Logistics 199 206 0.17 0.16 Maintenance 6,676 2,814 5.80 2.12 Safety 157 88 0.14 0.07 Quality 16 224 0.01 0.17 Environmental 244 115 0.21 0.09 Plant Management 1,143 1,077 0.99 0.81 Other 4,059 1,895 3.53 1.43 Total 19,046 22,406 16.56 16.89 Note: Totals may not sum due to rounding. Table 11.3: Historical Operating Costs $ 000 $/ton sold
11-4 JOHN T. BOYD COMPANY q:\eng_wp\3555.028 ss - blair fy25\wp\report\ch-11 - capital and operating costs.docx 2026 2027 2028 2029 2030 Cash Production Costs ($ 000): Mining 6,264 6,975 7,758 8,618 9,565 Production 11,621 12,941 14,392 15,989 17,745 Logistics 871 970 1,079 1,199 1,331 Maintenance 3,428 3,817 4,245 4,716 5,234 Safety 101 112 125 138 154 Quality 201 224 249 276 307 Environmental 165 184 205 228 253 Plant Management 1,188 1,323 1,471 1,634 1,814 Other (1,494) (1,664) (1,850) (2,056) (2,281) Total 22,345 24,883 27,674 30,744 34,121 Cash Production Costs ($/ton sold): Mining 3.33 3.37 3.41 3.45 3.48 Production 6.18 6.26 6.33 6.39 6.45 Logistics 0.46 0.47 0.47 0.48 0.48 Maintenance 1.82 1.85 1.87 1.89 1.90 Safety 0.05 0.05 0.05 0.06 0.06 Quality 0.11 0.11 0.11 0.11 0.11 Environmental 0.09 0.09 0.09 0.09 0.09 Plant Management 0.63 0.64 0.65 0.65 0.66 Other (0.80) (0.80) (0.81) (0.82) (0.83) Total 11.89 12.04 12.17 12.29 12.40 Note: Totals may not sum due to rounding. Table 11.4: Forecasted Operating Costs
12-1 JOHN T. BOYD COMPANY 12.0 ECONOMIC ANALYSIS 12.1 Approach The economic analysis presented in this chapter was prepared by BOYD for the purpose of confirming the commercial viability of the Blair Mine’s reported frac sand reserves and not for the purpose of valuing the Blair operation, or its assets. The economic analysis contains forward-looking information related to the projected operating and financial performance of the Blair Mine. This projection involves inherent known and unknown risks and uncertainties, some of which may be outside of Smart Sand’s control. Smart Sand, as with all mining companies, actively evaluates, changes, and modifies business and operating plans in response to various factors that may affect operational and/or financial results. Actual results, production levels, operating expenses, sales realizations, and all other modifying factors could vary significantly from the assumptions and estimates provided in this analysis. Risk is subjective, as such, BOYD recommends that each reader should evaluate the project based on their own investment criteria. The financial model used for the purposes of the economic analysis forecasts future free cash flow from frac sand production and sales over the life cycle of the Blair Mine using the annual forecasts of production, sales revenues, and operating and capital costs discussed earlier in this report. A DCF analysis, in which future free cash flows are discounted to present value, is used to derive an NPV for the frac sand reserves. The use of DCF-NPV analysis is a standard method within the mining industry to assess the economic value of a project after allowing for the cost of capital invested. The financial evaluation of the Blair Mine has been undertaken on a simplified after-tax basis and does not reflect Smart Sand’s corporate tax structure. NPV is calculated using an after-tax discount rate of 12% (NPV12). Cash flows were assumed to occur in the middle of each year and are discounted to January 1, 2026. Cost estimates and other inputs to the cash flow model for the project have been prepared using constant 2025 money terms, i.e., without provision for inflation. The internal rate of return and project payback were not calculated, as there was no initial investment (sunk costs) considered in the financial model provided herein. A suite of sensitivities was calculated to evaluate the effect of the main drivers of economic performance, including variations in sales prices, operating costs, and capital costs.
12-2 JOHN T. BOYD COMPANY 12.2 Assumptions and Limitations Cash flow projections for the Blair Mine have been generated from the annual forecasts of production, sales revenues, and operating and capital costs discussed earlier in this report. A summary of the key assumptions and limitations is provided below: • Sales volumes of finished frac sand through 2030 are based on Smart Sand’s budget projections and are expected to remain constant thereafter. Forecasted sales volumes are at or below the capacity of the Blair processing facilities (approximately 2.9 million tons of finished frac sand per year). • ROM production requirements are based on an expected processing yield of 67.5% and will remain in line with expected sales volumes. Forecasted ROM production is at or below the capacity of the existing mining equipment and related infrastructure. • Forecasted revenues are based on projected sales of various sizes (e.g., 20/40, 30/50, 30/70, 40/70, and 70/140-mesh) of finished frac sand with a weighted average mine gate sales price of $24.96 per ton in 2026, and remain relatively constant over the life of the reserves. Additional transportation and delivery costs are assumed to be incurred by the customer or added as a pass-through to the mine gate price. Market specifications and forecasted sales prices for Smart Sand’s finished frac sand from the Blair Mine are provided in Chapter 10. • Projected operating costs are discussed in Chapter 11 and include all site costs related to mining, processing, loading, and general and administrative expenses (including non-income taxes and fees). Unit operating costs are expected to remain relatively constant over the life of the operation. • Projected capital expenditures are discussed in Chapter 11 and include sustaining/maintenance of operations costs. Unit capital expenditures are expected to remain relatively constant over the life of the operation. • No allowance for changes in or the recapture of working capital has been made in the financial analysis as the Blair Mine business unit is a going concern. Exclusion of working capital from the financial analysis does not have a material impact on the NPV calculation. • Depreciation and amortization expenses through 2030 are based on Smart Sand’s budget projections and are expected to remain constant thereafter. • Allocation of corporate SG&A expenses is based on the Blair Mine’s relative share of Smart Sand’s operating performance. • Anticipated royalty payments have been provided by Smart Sand. • Income taxes are based on: − Federal Business Income Tax rate of 21%. − Wisconsin State Income Tax rate of 7.9%. • Asset recovery/salvage values were not included in the valuation. • Post-mining reclamation costs were not included in the valuation.
12-3 JOHN T. BOYD COMPANY Based on the information available at the time of our analysis, it is BOYD’s opinion that the production and financial projections provided herein are reasonable and are accurate to within ±20%. 12.3 Financial Model Results Table 12.1, below, provides a summary of the estimated remaining life of reserves financial results for the Blair Mine. Estimated LOM pre-tax and after-tax cash flows for frac sand production from the Blair Mine are presented in Table 12.2, on the following page. Units Remaining Life of Mine Total Expected Remaining Life years 41 Production: ROM Production 000 tons 161,253 Product Sales 000 tons 108,835 Total Revenues $ millions 2,716.5 Average Selling Price $/t sold 24.96 Total Cash Production Costs $ millions 1,347.4 Average Cash Production Cost $/t sold 12.38 Capital Expenditures $ millions 80.8 Average Capital Expenditures $/t sold 0.74 Pre-Tax: Cash Flow $ millions 548.1 NPV ₁₂ $ millions 106.4 After-tax: Cash Flow $ millions 401.7 NPV ₁₂ $ millions 78.3 Table 12.1: Financial Results
12-4 JO H N T. B O Y D C O M PA N Y Description Units 2026 2027 2028 2029 2030 Total Production Statistics: ROM Production 000 tons 2,784 3,062 3,369 3,705 4,076 20,380 40,760 40,760 42,357 161,253 Process Yield % 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 Product Sales 000 tons 1,879 2,067 2,274 2,501 2,751 13,755 27,510 27,510 28,588 108,835 Sand Revenue $ 000 46,898 51,588 56,747 62,422 68,664 343,320 686,640 686,640 713,547 2,716,466 Average Selling Price $/ton sold 24.96 24.96 24.96 24.96 24.96 24.96 24.96 24.96 24.96 24.96 Cash Production Costs $ 000 22,345 24,882 27,674 30,742 34,122 170,610 341,220 341,220 354,591 1,347,406 Average Cash Production Costs $/ton sold 11.89 12.04 12.17 12.29 12.40 12.40 12.40 12.40 12.40 12.38 Contribution Margin $ 000 24,553 26,706 29,073 31,680 34,542 172,710 345,420 345,420 358,956 1,369,060 SG&A Allocation $ 000 12,358 12,708 13,036 13,336 13,600 68,000 136,000 136,000 141,329 546,367 Royalties $ 000 3,347 3,682 4,050 4,455 4,900 24,500 49,000 49,000 50,920 193,854 EBITDA $ 000 8,848 10,316 11,987 13,889 16,042 80,210 160,420 160,420 166,706 628,838 DDA $ 000 3,028 3,028 3,028 3,028 3,028 15,140 30,280 30,280 31,467 122,307 Operating Income (EBIT) $ 000 5,820 7,288 8,959 10,861 13,014 65,070 130,140 130,140 135,240 506,532 Taxes $ 000 1,682 2,106 2,589 3,139 3,761 18,805 37,610 37,610 39,084 146,388 EBIAT $ 000 4,138 5,182 6,370 7,722 9,253 46,265 92,530 92,530 96,155 360,144 Capital Expenditures $ 000 2,000 2,000 2,000 2,000 2,000 10,000 20,000 20,000 20,784 80,784 Net Income $ 000 2,138 3,182 4,370 5,722 7,253 36,265 72,530 72,530 75,372 279,360 Pre-tax Cash Flow $ 000 6,848 8,316 9,987 11,889 14,042 70,210 140,420 140,420 145,922 548,054 Discounted at 12% $ 000 6,471 7,016 7,523 7,996 8,432 30,397 27,035 8,704 2,858 106,433 After-tax Cash Flow $ 000 5,166 6,210 7,398 8,750 10,281 51,405 102,810 102,810 106,838 401,667 Discounted at 12% $ 000 4,881 5,239 5,573 5,885 6,174 22,255 19,794 6,373 2,093 78,267 SMART SAND, INC. By 2031 to 2035 2036 to 2045 2046 to 2055 Table 12.2 ANNUAL PRODUCTION AND CASH FLOW FORECAST BLAIR MINE Prepared For John T. Boyd Company Mining and Geological Consultants February 2026 2056 to 2066
12-5 JOHN T. BOYD COMPANY DCF-NPV on a pre-tax and after-tax basis, using discount rates of 8%, 10%, 12% (the base case), and 15% were calculated utilizing the projected cash flows. Table 12.3 summarizes the results of the pre-tax and after-tax DCF-NPV analyses: As shown, the pre-tax DCF-NPV ranges from approximately $84.5 million to $157.2 million. The after-tax DCF-NPV ranges from approximately $62.2 million to $115.5 million. The economic analysis confirms that the Blair Mine generates positive pre- and after-tax financial results and a real NPV12 of $78.3 million. As such, it is BOYD’s opinion that the Blair Mine’s frac sand reserves have demonstrated economic viability. 12.4 Sensitivity Analysis Table 12.4, below, shows the sensitivity of the project after-tax for a cash flow discounted at 12% (NPV12) to a variation over a range of 20% above and below the base case in: (1) average selling prices and (2) cash production costs. As expected, the project is most sensitive to changes in product pricing and production costs. The Blair Mine generates negative value only if costs are increased substantially and selling prices are reduced dramatically. 8% 10% 12% 15% Pre-Tax 157.2 127.6 106.4 84.5 After-Tax 115.5 93.8 78.3 62.2 Table 12.3: DCF-NPV Analysis NPV ($ millions) -20% -15% -10% -5% 0% 5% 10% 15% 20% -20% 38.5 58.1 77.7 97.3 116.9 136.5 156.1 175.7 195.3 -15% 28.8 48.5 68.1 87.7 107.3 126.8 146.4 166.0 185.6 -10% 18.7 38.8 58.4 78.0 97.6 117.2 136.8 156.4 176.0 -5% 8.2 29.1 48.7 68.3 87.9 107.5 127.1 146.7 166.3 0% -3.8 19.0 39.1 58.7 78.3 97.9 117.5 137.0 156.6 5% -17.4 8.6 29.4 49.0 68.6 88.2 107.8 127.4 147.0 10% -31.0 -3.4 19.4 39.3 58.9 78.5 98.1 117.7 137.3 15% -44.6 -17.0 8.9 29.7 49.3 68.9 88.5 108.1 127.7 20% -58.2 -30.6 -3.0 19.7 39.6 59.2 78.8 98.4 118.0 C as h P ro du ct io n C os ts Table 12.4: After-Tax NPV12 Sensitivity Analysis ($ millions) Revenues
12-6 JOHN T. BOYD COMPANY The project is less sensitive to capital costs. There is little to no impact varying the capital costs from 70% to 130% of the base case. This analysis demonstrates the project value to be relatively robust, with positive NPVs reported across a wide range of assessed values. q:\eng_wp\3555.028 ss - blair fy25\wp\report\ch-12 - economic analysis.docx
13-1 JOHN T. BOYD COMPANY 13.0 PERMITTING AND COMPLIANCE 13.1 Permitting Requirements and Status Several permits, and compliance with federal, state, and municipal regulations are required for mining, processing, and related activities at the Blair Mine. The mine’s operations are predominantly regulated under non-metallic reclamation permits issued in both Jackson and Trempealeau Counties, Wisconsin, containing detailed reclamation plans for the property, along with guidance of discharge limits of industrial water from the site into U.S. waters. Additional permitting is regulated by Wisconsin state governmental agencies—the Wisconsin Department of Natural Resources (WDNR) or the Wisconsin Department of Agriculture, Trade & Consumer Protection (WDATCP)—and the U.S. Army Corps of Engineers (USACE). Permitting requirements include various Air Permits and Storm Water Management permits. Additional regulations include Land Use Agreements, for the Cities of Springfield and Preston regarding operating hours, noise, traffic, etc. Conditional Use Permits (CUPs), for both Jackson County and the City of Blair are in place related to the mining and processing of material at the Blair site. A summary of the permits for the Blair Mine is provided in Table 13.1, below. BOYD reviewed the permits necessary to support continued operations at the Blair Mine, with the required permits appearing to be valid and in good standing. The approved permits and certifications are adequate for the continued operation of the mine and processing facilities. New permits, permit revisions, and/or renewals may be necessary from time to time to facilitate future operations. Given sufficient time and planning, Smart Sand should be able to secure new permits, as required, to maintain its planned operations within the context of current regulations.
13-2 JOHN T. BOYD COMPANY 13.2 Environmental Studies It is BOYD’s understanding that various studies related to wetland delineation and ambient air monitoring have been completed for the Blair Mine. As part of the state and federal permitting process, various environmental assessments have been conducted and reviewed by the relevant local, state, and federal agencies. As the necessary permits for mining and processing operations have been issued, it is BOYD’s understanding that all environmental assessments have been accepted by the relevant regulatory bodies, and no material issues were found. 13.3 Waste Disposal and Water Management The coarse refuse generated from the sand processing operations is stockpiled and used in the construction of impoundments or backfilled into dredge ponds or previously mined pits. The fine refuse generated from the sand processing operations is disposed of by pumping it into dredge or impoundment ponds. Waste disposal facilities are in place for current mining operations, with plans to expand the disposal facilities to meet life of reserve storage requirements. Please refer to Section 9.4 for a description of these facilities. Water control structures are in place and function as required by regulatory agencies. 13.4 Compliance Mine safety is regulated by the Mine Safety and Health Administration (MSHA), as are all mining operations. MSHA inspects the facilities, at a minimum, twice a year. Smart Sand’s safety record compares favorably with its regional peers. Based on our review of information provided by Smart Sand and available public information, it is BOYD’s opinion that the Blair Mine’s record of compliance with applicable mining, water quality, and environmental regulations is generally typical for that of the industry. BOYD is not aware of any regulatory violation or compliance issue which would materially impact the frac sand reserve estimate. 13.5 Plans, Negotiations, or Agreements New permits and certain permit amendments/revisions require public notification. The public is made aware of pending permits by advertisement in local newspapers. Additionally, a copy of the application is retained at the local county’s public library for
13-3 JOHN T. BOYD COMPANY review. A comment period follows the last advertisement date to allow the public to submit comments to the regulatory authority. BOYD is not aware of any community or stakeholder concerns, impacts, negotiations, or agreements that would materially impact the estimated frac sand reserves. 13.6 Post-Mining Land Use and Reclamation Under current regulations in Wisconsin, the WDNR governs surface mining reclamation, outlining requirements in Chapter NR 135 of the Wisconsin Administrative Code. WDNR requires reclamation permits and plans be approved prior to beginning mining operations and requires operators to provide financial guarantees ensuring their ability to complete approved reclamation plans. Local ordinances for non-metallic mining reclamation plans are also enforced by each county, or incorporated areas within a county, that ensure non-metallic mining operations are reclaimed to meet standardized reclamation requirements, ground stabilization, revegetation, surface water management, groundwater quality, development and restoration of natural habitats, and the removal of refuse. As a matter of good mining practice, Smart Sand acts to conduct progressive reclamation throughout the operation’s mining life to minimize risk and costs at closure. Mine site reclamation costs are included in the capital and operating costs discussed in Chapter 11 and included in the economic analysis presented in Chapter 12. 13.7 Local Procurement and Hiring BOYD is not aware of any commitments for local procurement or hiring. Smart Sand reports making efforts to source supplies and materials from regional vendors. The workforce is likewise located in the regional area. Smart Sand’s stated core values include making positive impacts in the communities in which it operates. In addition to the payment of income taxes and other local community taxes, such as property taxes and royalties, Smart Sand supports, financially and otherwise, local community endeavors. Q:\ENG_WP\3555.028 SS - Blair FY25\WP\Report\CH-13 - Permitting and Compliance.docx
14-1 JOHN T. BOYD COMPANY 14.0 INTERPRETATION AND CONCLUSIONS 14.1 Findings BOYD’s independent technical assessment was conducted in accordance with S-K 1300 and concludes: • Sufficient data have been obtained through the site exploration and sampling programs and mining operations to support the geological interpretations of the sand deposit underlying the Blair Property. The data are of sufficient quantity and reliability to reasonably support the sand resource and sand reserve estimates presented in this report. • BOYD is of the opinion that our data validation efforts: (1) adequately confirm the reasonableness of the geologic interpretations, resource estimation criteria, and economic assumptions; and (2) support the use of the data in frac sand resource/reserve estimation. • The 108.8 million product tons of proppant sand reserves (as of December 31, 2025) identified on the property are reasonably and appropriately supported by technical studies, which consider expected geologic conditions, planned mining and processing operations, forecasted product revenues, and operating and capital cost estimates. As such, BOYD is of the opinion that there are reasonable expectations that the stated frac sand reserves for the Blair Mine are technically, economically, and legally extractable as of December 31, 2025. • To our knowledge, there are no other relevant data or information considered material to the Blair Mine that would impact or change this technical report summary. 14.2 Significant Risks and Uncertainties The ability of Smart Sand, or any mining company, to achieve production and financial projections is dependent on numerous factors. These factors primarily include site- specific geological conditions, the capabilities of management and operational personnel, product sales prices and market conditions, environmental issues, securing permit renewals and bonds, and developing and operating mines in a safe and efficient manner. Unforeseen changes in legislation and new industry developments could substantially alter the performance of any mining company. It is our understanding that Smart Sand continuously assesses these factors and adjusts operating plans as a matter of course. As a mining operation with an established history of commercial success, there is a high degree of certainty for the Blair Mine under the current and foreseeable operating
14-2 JOHN T. BOYD COMPANY environment. However, it should be noted that frac sand is generally marketed exclusively to the energy sector which has historically faced more volatility than many other industries. Subject specific assessments of risk are presented in the relevant sections of this report. 14.3 Recommendations Based on the current status of the Blair Mine, BOYD has no recommendations for additional work relevant to the subject frac sand reserves at this time. Q:\ENG_WP\3555.028 SS - Blair FY25\WP\Report\CH-14 - Conclusions.docx
Exhibit 21.1
Smart Sand, Inc. and Subsidiaries
List of Subsidiaries as of December 31, 2025
| Subsidiaries | State of Organization | |||||||
| Fairview Cranberry, LLC | Wisconsin | |||||||
| Will Logistics, LLC | Pennsylvania | |||||||
| Smart Sand Live Oak LLC | Delaware | |||||||
| Smart Sand Fayette County LLC | Delaware | |||||||
| Smart Sand Hixton LLC | Delaware | |||||||
| Smart Sand Reagan County LLC | Delaware | |||||||
| Smart Sand Tom Green County LLC | Delaware | |||||||
| Smart Sand Oakdale LLC | Delaware | |||||||
| SSI Logistics LLC | Delaware | |||||||
| SSI Permian I, LLC | Delaware | |||||||
| SSI Permian II, LLC | Delaware | |||||||
| Smart Sand Holdings, LLC | Delaware | |||||||
| SSI Bakken I, LLC | Delaware | |||||||
| Quickthree Technology, LLC | Delaware | |||||||
| SSI Marcellus I, LLC | Delaware | |||||||
| Bakken Silo Servicing, LLC | Delaware | |||||||
| SSI Oil and Gas Proppants Holdings, LLC | Delaware | |||||||
| SSI Oil and Gas Proppants, LLC | Delaware | |||||||
| CRS Proppants LLC | Delaware | |||||||
| Northern White Sand LLC | Delaware | |||||||
| Smart Sand Blair, LLC | Delaware | |||||||
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have issued our report dated February 26, 2026, with respect to the consolidated financial statements included in the Annual Report of Smart Sand, Inc. on Form 10-K for the year ended December 31, 2025. We consent to the incorporation by reference of said report in the Registration Statements of Smart Sand, Inc. on Form S-3 (File No. 333-276549) and on Forms S-8 (File No. 333-270118, File No. 333-239057, File No. 333-214700 and File No. 333-214699).
/s/ GRANT THORNTON LLP
Philadelphia, Pennsylvania
February 26, 2026
Exhibit 23.2
[LETTERHEAD OF JOHN T. BOYD COMPANY]
February 26, 2026
File: 3555.025
CONSENT OF JOHN T. BOYD COMPANY TO BE NAMED IN REGISTRATION STATEMENT
Ladies and Gentlemen,
The undersigned hereby consents to the references to our firm in the form and context in which they appear in this Annual Report on Form 10-K for the year ended December 31, 2025 (the “Annual Report”). We hereby further consent to (i) the use in the Annual Report and the Quarterly Reports of information relating to our Technical Report Summaries for Frac Sand Resources and Reserves for Oakdale, Ottawa, and Blair Mines and (ii) the incorporation by reference in the Registration Statement on Form S-3 (No. 333-276549) of Smart Sand, Inc., including any amendment thereto, any related prospectus and any related prospectus supplement of such information.
Respectfully submitted,
JOHN T. BOYD COMPANY
By:
/s/ Ronald L. Lewis_____________
Ronald L. Lewis
Managing Director and COO
Exhibit 31.1
CERTIFICATION BY PRINCIPAL EXECUTIVE OFFICER
I, Charles E. Young, certify that:
1. I have reviewed this Annual Report on Form 10-K of Smart Sand, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a). All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Dated: February 26, 2026
| /s/ Charles E. Young | ||
| Charles E. Young, Chief Executive Officer | ||
| (Principal Executive Officer) | ||
Exhibit 31.2
CERTIFICATION BY PRINCIPAL FINANCIAL OFFICER
I, Lee E. Beckelman, certify that:
1. I have reviewed this Annual Report on Form 10-K of Smart Sand, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Dated: February 26, 2026
| /s/ Lee E. Beckelman | ||
| Lee E. Beckelman, Chief Financial Officer | ||
| (Principal Financial Officer) | ||
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Smart Sand, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Charles E. Young, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
Dated: February 26, 2026
| /s/ Charles E. Young | ||
| Charles E. Young, Chief Executive Officer | ||
| (Principal Executive Officer) | ||
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Smart Sand, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lee E. Beckelman, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
Dated: February 26, 2026
| /s/ Lee E. Beckelman | ||
| Lee E. Beckelman, Chief Financial Officer | ||
| (Principal Financial Officer) | ||
Exhibit 95.1
MINE SAFETY DISCLOSURES
The following disclosures are provided pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”) and Item 104 of Regulation S-K, which requires certain disclosures by companies required to file periodic reports under the Securities Exchange Act of 1934, as amended, that operate mines regulated under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”).
Mine Safety Information
Whenever the Federal Mine Safety and Health Administration (“MSHA”) believes a violation of the Mine Act, any health or safety standard or any regulation has occurred, it may issue a citation which describes the alleged violation and fixes a time within which the U.S. mining operator must abate the alleged violation. In some situations, such as when MSHA believes that conditions pose a hazard to miners, MSHA may issue an order removing miners from the area of the mine affected by the condition until the alleged hazards are corrected. When MSHA issues a citation or order, it generally proposes a civil penalty, or fine, as a result of the alleged violation, that the operator is ordered to pay. Citations and orders can be contested and appealed, and as part of that process, may be reduced in severity and amount, and are sometimes dismissed. The number of citations, orders and proposed assessments vary depending on the size and type (underground or surface) of the mine as well as by the MSHA inspector(s) assigned.
Mine Safety Data
The following provides additional information about references used in the table below to describe the categories of violations, orders or citations issued by MSHA under the Mine Act:
•Section 104 S&S Citations: Citations received from MSHA under section 104 of the Mine Act for violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a mine safety or health hazard.
•Section 104(b) Orders: Orders issued by MSHA under section 104(b) of the Mine Act, which represents a failure to abate a citation under section 104(a) within the period of time prescribed by MSHA. This results in an order of immediate withdrawal from the area of the mine affected by the condition until MSHA determines that the violation has been abated.
•Section 104(d) Citations and Orders: Citations and orders issued by MSHA under section 104(d) of the Mine Act for an unwarrantable failure to comply with mandatory health or safety standards.
•Section 110(b)(2) Violations: Flagrant violations issued by MSHA under section 110(b)(2) of the Mine Act.
•Section 107(a) Orders: Orders issued by MSHA under section 107(a) of the Mine Act for situations in which MSHA determined an “imminent danger” (as defined by MSHA) existed.
Pattern or Potential Pattern of Violations
The following provides additional information about references used in the table below to describe elevated pattern of violation enforcement actions taken by MSHA under the Mine Act:
•Pattern of Violations: A pattern of violations of mandatory health or safety standards that are of such nature as could have significantly and substantially contributed to the cause and effect of mine health or safety hazards under section 104(e) of the Mine Act.
•Potential Pattern of Violations: The potential to have a pattern of violations under section 104(e).
Pending Legal Actions
The following provides additional information of the types of proceedings brought before the Federal Mine Safety and Health Review Commission ("FMSHRC"):
•Contest Proceedings: A contest proceeding may be filed by an operator to challenge the issuance of a citation or order issued by MSHA.
•Civil Penalty Proceedings: A civil penalty proceeding may be filed by an operator to challenge a civil penalty MSHA has proposed for a violation contained in a citation or order. The operator does not institute civil penalty proceedings based solely on the assessment amount of proposed penalties. Any initiated adjudications address substantive matters of law and policy instituted on conditions that are alleged to be in violation of mandatory standards of the Mine Act.
•Discrimination Proceedings: Involves a miner’s allegation that he or she has suffered adverse employment action because he or she engaged in activity protected under the Mine Act, such as making a safety complaint. Also includes temporary reinstatement proceedings involving cases in which a miner has filed a complaint with MSHA stating that he or she has suffered discrimination and the miner has lost his or her position.
•Compensation Proceedings: A compensation proceeding may be filed by miners entitled to compensation when a mine is closed by certain closure orders issued by MSHA. The purpose of the proceeding is to determine the amount of compensation, if any, due to miners idled by the orders.
•Temporary Relief: Applications for temporary relief are applications filed under section 105(b)(2) of the Mine Act for temporary relief from any modification or termination of any order.
•Appeals: An appeal may be filed by an operator to challenge judges’ decisions or orders to the Commission, including petitions for discretionary review and review by the Commission on its own motion.
For the Twelve Months Ended December 31, 2025:
Mine (1) | Oakdale, WI 4703625 | Taylor, WI 4703759 | Ottawa, IL 1103253 | |||||||||||
| Section 104 citations for violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a mine safety or health hazard (#) | 1 | — | — | |||||||||||
| Section 104(b) orders (#) | — | — | — | |||||||||||
| Section 104(d) citations and orders (#) | — | — | — | |||||||||||
| Section 110(b)(2) violations (#) | — | — | — | |||||||||||
| Section 107(a) orders (#) | — | — | — | |||||||||||
Proposed assessments under MSHA (2) | $1,074 | $— | $755 | |||||||||||
| Mining-related fatalities (#) | — | — | — | |||||||||||
| Section 104(e) notice | — | — | — | |||||||||||
| Notice of the potential for a pattern of violations under Section 104(e) | — | — | — | |||||||||||
| Legal actions before the FMSHRC initiated (#) | 2 | — | — | |||||||||||
| Legal actions before the FMSHRC resolved (#) | — | — | — | |||||||||||
| Legal actions pending before the FMSHRC, end of period: | — | — | — | |||||||||||
| Contests of citations and orders referenced in Subpart B of 29 CFR Part 2700 (#) | — | — | — | |||||||||||
| Contests of proposed penalties referenced in Subpart C of 29 CFR Part 2700 (#) | 2 | — | — | |||||||||||
| Complaints for compensation referenced in Subpart D of 29 CFR Part 2700 (#) | — | — | — | |||||||||||
| Complaints of discharge, discrimination or interference referenced in Subpart E of 29 CFR Part 2700 (#) | — | — | — | |||||||||||
| Applications for temporary relief referenced in Subpart F of 29 CFR Part 2700 (#) | — | — | — | |||||||||||
| Appeals of judges’ decisions or orders referenced in Subpart H of 29 CFR Part 2700 (#) | — | — | — | |||||||||||
| Total pending legal actions (#) | 2 | — | — | |||||||||||
(1) The definition of mine under section 3 of the Mine Act includes the mine, as well as other items used in, or to be used in, or resulting from, the work of extracting minerals, such as land, structures, facilities, equipment, machines, tools and minerals preparation facilities. Unless otherwise indicated, any of these other items associated with a single mine have been aggregated in the totals for that mine. MSHA assigns an identification number to each mine and may or may not assign separate identification numbers to related facilities such as preparation facilities. We are providing the information in the table by mine rather than MSHA identification number because that is how we manage and operate our mining business and we believe this presentation will be more useful to investors than providing information based on MSHA identification numbers.
(2) Represents the total dollar value of the proposed assessments from MSHA under the Mine Act for the twelve months preceding December 31, 2025, for all citations/orders assessed, not just those disclosed in the rows preceding such dollar value.