You recently received an email containing a detailed presentation of Project Black Diamond. While the email arrived a few days prematurely, you are invited to participate in Project Black Diamond. You can find a short summary of the opportunity below along with a link to the data room containing all of the pertinent information.

Deal Alert: Project Black DiamondJoin me in an exclusive opportunity to acquire a critical piece of U.S. oil and gas infrastructure, with reliable cash flow, at a 60% discount to construction costs.THE IDEAIn the fall of 2019, I found myself at a mining conference in Vail, Colorado strolling through the ski village with Nick D’Onofrio sipping coffee. Nick, halfway through a Master’s Degree at the Colorado School of Mines, had been working for me at Ri the last year – he’d recently convinced me to promote him from free intern to paid employee. This was our first time meeting in person. At the time, I was obsessed with a story about oil tycoon John D. Rockefeller that I couldn’t get out of my head or stop talking about. In Rockefeller’s pursuit of total U.S. oil domination he created a brilliant strategy for eliminating competitors. Controlling supply isn’t enough, you must also control movement. Back then, rail was the only way to deliver oil to market; without access to cheap transportation oil was stranded on site and essentially worthless. Instead of competing for oil fields, Rockefeller gained control of strategic rail networks and ruthlessly forced competitors to sell oil concessions to him at rock bottom prices, or be choked out of existence. “THIS!”I said to Nick, is what we need to bring to Ri. “Access to strategic energy infrastructure. And if you really want to succeed here you need to find it!”THE OPPORTUNITYTwo years later Nick was on a chairlift in Whistler, another ski town near his new home in Vancouver. He struck up a conversation with the guy crammed into his left – a man working for a mid-sized U.S. commodity trader. Part of his job was managing a frac sand terminal in North Dakota that he’d purchased out of bankruptcy and built into a thriving business. Nick’s ears perked up. Most people don’t know it, but frac sand is the critical input for U.S. onshore oil and gas production. “This asset is special,” he told Nick, “transportation makes up 70% of the cost of frac-sand in this part of the world. This terminal is the cheapest operator in the region and essentially sets the price. It’s so efficient it was profitable at the height of COVID when oil prices went negative!” Nick had one question: Is it for sale?THE EXECUTION The next Resource Insider deal is years in the making.Project Black Diamond is an investment in the lifeblood of the American economy Energy Infrastructure.We will be purchasing, along with the team at Glenorchy Capital & Capitalist Exploits, a frac sand terminal in the heart of U.S. oil country: North Dakota’s Bakken formation.

It’s taken us years of searching and negotiation to bring this deal to Members. It’s the realization of the strategy we began implementing on the side of a ski hill in October 2019 – buying critical cash flowing U.S. infrastructure. Why am I doing this deal?The GREAT ONSHORING.Energy production is coming home to the USA, and I believe we are about to see a massive inflow of capital to develop the output of American energy. We’ve just seen the tip of the iceberg in the recent acquisitions of the frackers Pioneer & Hess by the super majors Exxon and Chevron. I might not be able to compete with Exxon buying oil wells, but, like Rockefeller, I can control critical infrastructure. Today, I can buy infrastructure for pennies on the dollar.I’m looking for:Exposure to energy;Exposure to the USA; Exposure to Cash Flow; Assets that have a unique and defensible moat; andExposure to an asset NOT listed on capital markets.I’m not looking to reinvent the wheel. We’re looking to make money by acquiring an asset with a dead simple business model, a capable team, and a proven track record.Let’s dig in… What is frac sand… and why should I care?Without frac sand there is no fracking. When an O&G well is fracked, high grade frac sand is mixed with water and pumped into the ground; the sand holds the fissures open, allowing oil and gas to flow out of the rock to the surface. Without frac sand there would not be any significant onshore O&G production in the USA.What is the Bakken?The Bakken Formation, located in North Dakota, Montana, and Canada, is the second largest oil and gas basin in North America behind only the Permian Basin in Texas. North Dakota ranks third in the nation, after Texas and New Mexico, in both crude oil reserves and production. It’s also where Hess (recently purchased by Chevron) has much of their U.S. operations. BUT, unlike the Permian, which is full of frac sand mines, there are no frac sand mines in the Bakken. This means: EVERY TONNE OF THIS CRITICAL MINERAL MUST BE SHIPPED IN. In this part of the world, transport accounts for up to 70% of the cost of frac sand. It is critical that miners and frackers move this critical element as cheaply as possible. And, as you likely know, the ONLY way to do that effectively over land is rail… which brings us to: What is a Frac Sand Terminal?Frac sand is shipped into the Bakken by rail.Once in North Dakota, rail cars drop the frac sand off at a terminal – a storage facility serving as the central hub where sand is unloaded, stored, and reloaded onto trucks for delivery to drill sites. Think of it as the hub and spokes model.

The terminal owners never take ownership of the frac sand, they simply charge transloading and storage fees on the volume of sand that comes through the terminal. The sand is already pre-sold before it reaches the terminal, so the terminal’s job is purely to manage the logistics and operations of smooth delivery of the sand. Like I said: Simple. BUT, not all terminals are created equal.. So, what makes THIS terminal unique? 1. LOCATION, LOCATION, LOCATION This terminal is the only full-scale terminal on the Canadian Pacific (“CP”) railroad, which has a direct line from Wisconsin, hosting some of the highest quality sand mines in the world. Sand has to meet rigorous specs for it to be used in fracking. Frac sand must be composed of pure quartz grains to avoid chemical reactions, spherical to prevent clogging, uniform in size, and strong enough to withstand the high pressures in the well. There are no high-quality deposits in or near the Bakken. This means that it has to be imported, largely from Wisconsin, which has the closest deposits.

Map of U.S. Frac Sand Mines & Oil and Gas Basins The CP is the only class 1 railroad with direct access from Wisconsin to the Bakken. As noted, up to 70% of the cost of frac sand is attributed to transportation, and switching rail lines is one of the most costly parts of rail transportation. Making this terminal the cheapest known point of delivery of scale. 2. FREE SUNK CAPITAL The terminal services a major sand miner’s (Covia) most profitable mine. Because this terminal is so critical to the profitability of the miner, they have invested $30 million to expand infrastructure at the terminal over the last several years. All of the infrastructure that they have built will revert to full ownership of the terminal at the end of the lease agreement. The lease agreement ends in 2043 (20 years). As part of the lease agreement, Covia (the miner) has exclusive access to sand throughput at the terminal and the terminal has exclusivity as the sole logistics provider to Covia in the area. This is akin to having a long-term tennant in a commercial real estate property, where the renter is adding value to the property by investing in renovations. 3. INFLATION PROTECTION Per the lease agreement, the prices that the terminal charges are directly tied to energy inflation (BLS CPI: Energy Commodities). There are nuances to this agreement, but here are the basics: If energy commodity inflation is 10%, then the terminal is contractually entitled to increase the price it charges Covia by 10% per ton of sand that comes through the terminal. The best part yet, if inflation is negative prices stay flat (they contractually can’t go down). The fact that it tracks the energy commodity inflation index is especially enticing. As we’ve talked about for years, during inflationary environments the best place to protect your capital has historically been energy assets (as you can see in the image below).

4. MASSIVE DISCOUNT TO REPLACEMENT COST We are buying the terminal for 39¢ on the dollar. The original owners spent $70 million to build the terminal, then Covia spent another $30 million to expand throughput capacity ($100 million total invested). We are buying it for $39 million… but we only actually need $19 million up front because we have been offered $20 million in seller’s financing. 5. CASHFLOW This is the acquisition of an operating business with committed long-term partners and an experienced fully operational 30 person team. Most of the opportunities we feature at Ri are high risk natural resource speculations. There is development risk, geological risk, execution risk, commodity risk, jurisdiction risk, etc.. This business is cash flowing on day one. We do not need to bet on business growth at all; if operations stay as is we expect to deliver healthy returns. But, we also see significant room for growth! And if the business does grow, returns should be more attractive. We have a demonstrable/audited history of this business operating with healthy profits even through negative oil prices. When the “world was ending” and there was only one frac crew operating in the Bakken, guess who was supplying them with frac sand? This terminal/Covia was supplying 100% of the frac sand used in the Bakken at that time. This is one of the many reasons our team views this terminal as a best in class asset with a strong moat. Project Black Diamond: Cicada Logistics, LLC As usual, we’ll be providing Members with everything that they need to know about this deal. But to get you started here are the facts: KEY PROJECT FACTS

Key TakeawayProject Black Diamond has been in the works at Ri HQ for more than 2-years – our team has put countless hours into identifying and launching this opportunity. One reason I love the frac sand market is because it is an energy services business. When oil and gas markets are depressed, the service markets tend to be even more depressed, when energy markets are hot, energy service markets are even hotter. We went out looking for best in class assets that are making money in the current (read: weak) environment, knowing that when the tides turn and energy markets are ripping higher, we can clean up. This is similar to the idea that in a depressed housing market, you can buy the best houses in the best neighborhoods at a major discount. You won’t be buying them out of bankruptcy, as there is always demand, but sometimes you can find amazing deals for pennies on the dollar (when compared to replacement costs). That is what we are doing here: buying a best in class asset for pennies on the dollar.Here are my favorite parts of this deal and why I’m excited to invest:Un-correlated to the S&P 500 or bond marketsExposure to the coming energy boomHigh yielding investment that should pay me every yearPrivate hard asset: safe haven from the “everything bubble”Built in inflation protectionControl of strategic asset in high priority O&G development regionSimple business with strong historic cash flow and moat.We get into the details of this opportunity in the data room, where you will find videos, presentations, financial models, audited financial statements, and anything else you’ll need to understand the deal. I am investing a large portion of my own capital in Project Black Diamond, and I am excited to bring the opportunity to you as well.

TimelineThe deal is closing Friday, January 5, 2024 @ 5pm Pacific Time. That means: Allocation requests need to be sent by Friday, December 15.The company will confirm your allocation request after Monday, December 18.Subscription agreements and funds will need to be sent by Friday, January 5.This is a private deal with no intention of going public, meaning investors cannot go through a broker.Member’s Area Before gaining access to the data room, you must acknowledge and agree to the terms and conditions of the Non-Disclosure Agreement, which is a prerequisite for accessing confidential information related to the investment opportunity presented. By clicking the button below, you confirm understanding that this information is sensitive and confidential, and commit to adhering to the confidentiality obligations and restrictions as outlined in the Non-Disclosure Agreement. Your agreement to these terms is binding upon clicking the button below.

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This is a private deal with no intention of going public, meaning investors cannot go through a broker.You must request an investment directly through the company (see How to Invest in the Member’s Area for more details).Member’s AreaToday, in the Project Black Diamond MEMBER’S AREA, you’ll find:Deal Intro;Corporat e Presentation; Video SeriesTerminal Documents; andHow to Invest.