Walk Through VRX Silica’s Remarkable Performance at Arrowsmith Projects Since Acquisition

Summary

• VRX Silica has made fast-paced progress at its Muchea and Arrowsmith projects since their acquisition in 2018 and 2017, respectively.
• At present, the Company has letters of intent and expressions of interest to buy 1.5 million tonnes p.a. of Arrowsmith North products and 1 million tonnes p.a. of Arrowsmith Central products.
• VRX’s well-designed infrastructure plan and robust management team places it in a strong position to satisfy burgeoning silica sand demand in the international market.

Boasting a portfolio of high-grade silica sand projects in WA (Western Australia), VRX Silica Limited (ASX:VRX) has progressed considerably well over the past few years. VRX Silica has made fast-paced progress at its Muchea and Arrowsmith projects since their acquisition in 2018 and 2017, respectively.

Several enquiries and expressions of interest have been received so far for the Company’s projects from multiple organisations across Asia. At present, VRX has letters of intent and expressions of interest to buy 1.5 million tonnes p.a. of Arrowsmith North products and 1 million tonnes p.a. of Arrowsmith Central products. The Company expects further interest once these products are made available to the market.

Having said that, let us discuss Arrowsmith projects’ accelerated progress towards production phase since their acquisition in 2017:

Oct 2017: Acquisition of Arrowsmith Projects

In October 2017, VRX Silica (formerly recognised as Ventnor Resources Ltd) announced the acquisition of Arrowsmith Silica Sand Project, situated 270km to the north side of Perth in WA. The potential of Arrowsmith Project to deliver substantial silica sand resources to supply increasing markets in the Asia-Pacific region for both glass making and construction markets, was the basis of acquisition.

Arrowsmith North, Arrowsmith Central and Arrowsmith South were the three key prospects at the project, that have had preliminary investigations.

Oct 2018: Estimated Mineral Resource for Arrowsmith North

About a year after acquisition, VRX announced the results from the independent estimate of Mineral Resource at its Arrowsmith North prospect. Based on an exploration program comprising 62 handheld auger drill holes to a depth of 4-5 metres for a total of 235.6 metres, the Company reported an Inferred Mineral Resource of 193.6 million tonnes @ 98% SiO₂ at the prospect.

Dec 2018: Estimated Mineral Resource for Arrowsmith Central; Submitted MLA for Arrowsmith North

VRX reported Inferred Mineral Resource of 28 million tonnes @ 97.7% SiO₂ from its Arrowsmith Central prospect in December 2018. The result was based on an exploration program of 39 hand-held auger drill holes and reported in accordance with JORC Code 2012 Edition.

Besides estimating maiden mineral resource at Arrowsmith Central, the Company also submitted Mining Lease Application MLA70/1389 for Arrowsmith North in December 2018. The application incorporated a small portion of 73 Mt @ 97.7% SiO₂ from the total Resource of 193.6 Mt @ 98% SiO₂.

Feb 2019: Submitted MLA for Arrowsmith Central

VRX marked entry in 2019 with the submission of Mining Lease Application MLA70/1392 for Arrowsmith Central prospect. The mining lease application included 96 per cent of total previously announced Resource of 28 Mt @ 97.7% SiO₂.

Mar 2019: Commenced Drilling

Following initial shallow hand auger drilling, VRX kick-started aircore drilling at Arrowsmith Silica Sand Projects in March 2019. The planned drill program was deeper and closer-spaced than previous work and was targeted to boost the tonnage of sand and also the JORC confidence within the MLAs at both Arrowsmith project areas.

July 2019: Resource Upgrade for Arrowsmith North

In line with expectations, VRX’s total Mineral Resource Estimate (MRE) at Arrowsmith North increased by 398 per cent to an exceptional 771 Mt @ 98% SiO₂. The upgraded resource estimate comprised an Indicated component of 248 Mt @ 97.7% SiO₂ and an Inferred component of 523 Mt @ 98.2% SiO₂.

Aug 2019: Resource Upgrade for Arrowsmith Central; BFS Completed for Arrowsmith North

On 15^th August 2019, VRX announced an increase of 273 per cent in MRE Upgrade for Arrowsmith Central, to 76.5 Mt @ 96.8% SiO₂. The upgraded MRE comprised an Indicated component of 28.2 Mt @ 96.6% SiO₂ and an Inferred component of 48.3 Mt @ 96.9% SiO₂.

With the estimation of MRE upgrade at Arrowsmith Central project, the Company’s total Indicated and Inferred Mineral Resources surpassed 1 billion tonnes across all three Projects.

Additionally, VRX announced the finalisation of Bankable Feasibility Study (BFS) for Arrowsmith North project towards the end of August 2019, reporting exceptional financial metrics with an ungeared NPV₁₀ of $242 million based on 25 years of a potential mine life of more than 100 years.

Moreover, the Company reported Probable Ore Reserve totalling 223 Mt @ 99.7% SiO₂ for Arrowsmith North in line with the JORC Code 2012 edition, with 204 Mt @ 99.7% SiO₂ in the Mining Lease application area (M70/1389).

Sep 2019: BFS Completed for Arrowsmith Central

Another notable achievement was unveiled in September 2019, when VRX announced compelling financial metrics from Arrowsmith Central BFS, that complemented Arrowsmith North project. An ungeared NPV₁₀ of $147 million based on 25 years of a potential mine life of more than 35 years was revealed from Arrowsmith Central BFS.

VRX also announced a Probable Ore Reserve totalling 18.9 Mt @ 99.6% SiO₂ for Arrowsmith Central in line with the JORC Code 2012 edition, with 18.7 Mt @ 99.6% SiO₂ in the Mining Lease application area (M70/1392).

Undeniably, VRX Silica is progressing well with its commendable performance at highly prospective Arrowsmith projects, capable of producing high-grade products for potential markets. The Company’s well-designed infrastructure plan and robust management team places it in a strong position to satisfy burgeoning silica sand demand in the international market.

VRX traded at $0.100 on 23 June 2020 (11:29 AM AEST).