On 25 March 2019, Diatreme Resources Limited (ASX: DRX), which is an emerging silica sand explorer and developer, announced the initial silica sands exploration targets, along with further exploration activity at its Galalar Silica Project in North Queensland, based on the growth in the demand for premium-quality silica from the Asian markets.
Galalar Silica Project lies in the world?class silica exploration province, adjacent to the largest operating silica mines in the world at Cape Flattery. At Elim Road North Prospect and Elim Road South Prospect, two potential major resource extensions were identified.
The recent resource upgrade on 7 March 2019, demonstrated that the project possesses the potential of becoming a source of premium quality silica, giving the company confidence to make further investment in the exploration of Galalar.
Mr Neil McIntyre, CEO, DRX highlighted that the company will soon be testing each of the targets quickly and will further highlight the exact position of the resource extensions. Thus, it can accordingly prioritize those areas that are capable of positive economic return. It is expected that further exploration and the drilling programs will commence from the second quarter of 2019.
The range of the Current exploration program maiden exploration target is in the range of 210 million tonnes to 2.1 billion tonnes of Silica.
Silica sand is quartz which is broken down over time through water and wind into minute granules. This silica sand is majorly used into the glass industry, foundry, hydraulic fracturing, filtration and abrasives. It is also one of the essential components used in construction work. In 2017, more than 15 billion tonnes of sand was mined for construction.
Statistics states that approximately 36% of the silica market is captured by the glass industry, 33% by the foundry, 16% by hydraulic fracturing, 7% by filtration, 5% by abrasives and the remaining by other sectors. Further, as per the expectation of the IMARC, there will be a high growth of the Silica from North America, Latin America & Western Europe as a result of increasing hydraulic fracturing. There is also a probability of an increase in the demand of Silica from the emerging markets, such as India and China from the foundry and construction industries.
The Exploration Target comes after the recent upgrade of Galalar’s Inferred Mineral Resource which is estimated to be around 26.4 million tonnes. As per the company’s update on 7 March 2019, it had more than 99% of silicon dioxide. The bulk sample test work reflected a high recovery rate of 88% followed by 3% of slime and HM of 0.19%.
In Q2 2019, the company will be focusing on the drilling programs, further regional exploration, bulk testing & product definition, Internal commercial studies, Infrastructure scoping, transhipment and logistics scoping, Bathymetric River Studies, as well as Ongoing Regulatory Agency Engagement work.
In the Q3 and Q4 of 2019, the company will further work on the upgradation of the resources, NAIF assessments, Early Offtake Agreements, TO Mining Agreement, Scoping Studies, Mine Planning Studies and the ML Submission.
In the first quarter of 2020, Diatreme Resources will declare the PFS results followed by the submission of the environmental studies and the binding offtakes. In the Q2/Q3 of 2020, the company will finalize the bankable feasibility studies and will also finalize Project funding.
On 23 January 2019, the company appointed Blackbird Partners for the development of the Cyclone Zircon Project.
The company also notified the market, on 25 March 2019 about the granting of an immediate trading halt in its securities pending an announcement relating to capital raising, in accordance with ASX Listing Rule 17.1. DRX requested that trading halt will remain in place until the earlier of the beginning of trade on 27 March 2019.
The shares of the company last traded on 22 March 2019 and stood at A$0.013. The company has a market capitalization of A$17.29m and approximately 1.33 billion outstanding shares.
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