VRX Silica (ASX: VRX) receives $2M grant for high-grade silica sand production, shares up 10%

Highlights

• VRX Silica has received approval for its Investment Attraction Fund application for funding grant of AU$2 million by the Western Australian state government.
• The proceeds from the grant will be used for testwork and construction of pilot plant for High Purity Quartz (HPQ) flour project.
• VRX aims to build an HPQ flour manufacturing process that can ensure a standard of 99.999% SiO₂ (5N) purity.

Australian-listed pureplay silica sand company VRX Silica Limited (ASX: VRX) has been granted AU$2 million from the Western Australian state government in matched funding under the Investment Attraction Fund (IAF). This has been approved with a Financial Assistance Agreement (FAA) for the grant.

Shares jump 10%
Post the announcement, the company stock price rose by 10% and was spotted trading at AU$0.165 at the time of writing on 18 July 2023, with a market capitalisation of AU$84 million. The company shares have gained over 26% in the past one month.

Key details of the grant
The Western Australian state government released ‘Diversify WA’ initiative in July 2019. The initiative outlining an economic development framework for the state included a list of strategies, initiatives, and actions that would help it in building “a strong and diversified economy delivering secure, quality jobs through increased investment across a broad range of industries”. The Investment Attraction Fund is a part of the Diversify WA scheme.

VRX filed a preliminary application under Stage 1 of the scheme in May 2022 and at the end of August 2022, VRX was shortlisted and invited to progress to Stage 2. Consequently, the state government considered and approved the company’s application for funding.

Overview of the project
VRX has proposed a project to study the potential to build a high purity quartz (HPQ) flour manufacturing process and pilot plant in Western Australia to establish a purity standard of 99.999% for SiO₂ (5N). This may result in the construction of a larger commercial plant for large-scale processing.

Data source: company update

Initially, the company intends to evaluate the potential for the coarse material planned to be delivered from its Muchea Silica Sand Project. VRX highlights that a portion of project ore may meet the specification required, as indicated by the recent pilot plant work undertaken on a 2.2 tonne bulk sample of Muchea sand.