VRX Silica (ASX: VRX) sets sight on promising Asian silica sand markets

Highlights

• VRX targets the Asian glass market amidst soaring demand, highlighting 5-6% annual growth.
• VRX boasts a combined resource of 1.4 billion tonnes with superior silica sand quality exceeding 99% SiO₂
• Extensive progress has been made in securing mining leases and preparing infrastructure across projects.
• Environmental and mining approvals for Arrowsmith North are expected by mid-2024, paving the way for construction.
• The company expects the first production from the Arrowsmith North project in 2025.

VRX Silica Limited (ASX: VRX) is a Perth-based pure-play silica sand company with five advanced projects, each 100% owned and located in the tier 1 mining region of Western Australia. Each project is capable of independent operations with  low impact mining and processing requirements. 

The scale of these projects offers an opportunity for exporting silica sand to the Asia glass manufacturing industry and tapping into the demand from the local downstream industry. VRX notes that the Asian glass market is growing at an annual rate of 5-6%.

Currently, VRX’s combined resource stands at 1.4 billion tonnes with silica sand quality surpassing 99% silicon dioxide (SiO₂) content. The company is targeting the float glass, container glass and cover glass markets. Cover glass is utilised in solar panels, with the cover glass market experiencing approximately 30% annual growth in Asia, while, float and container glass markets are growing by 5-6% in Asia, highlights the company.

VRX advanced project portfolio

Mining leases have been secured across four projects, with extensive progress made in permitting and infrastructure preparations.

Arrowsmith North leads the projects, with plans for staggered development and initial production anticipated to commence in 2025. Production would be followed by the Muchea, Arrowsmith Central, Boyatup, and Arrowsmith Brand projects.

Production to start at Arrowsmith North in 2025   

VRX expects environmental and mining approvals for Arrowsmith North by mid-2024. With these approvals, construction would start at the project, expected to take 6-8 months. The ore reserve of Arrowsmith North sits at 221Mt at 99.5% Si₂O.   

The updated BFS for Arrowsmith North has shown robust financial metrics, with an ungeared NPV₁₀ of AU$167 million expected. This figure is based on 25 years of mining of a resource spanning over 100 years. To learn more, read here.

The products from this project would target the international foundry and glassmaking industries.

Leveraging its extensive portfolio of advanced projects in Western Australia, the company is eyeing the growing opportunities for high-quality silica sand in the burgeoning Asian glass market. The company's commitment to environmentally conscious mining practices and innovative processing technologies further solidifies its position as an emerging player in the industry. As VRX moves forward with its flagship Arrowsmith North project and subsequent developments, it aims to play a pivotal role in shaping the future of the glassmaking industry.

VRX shares traded at AU$0.087 apiece at the time of  writing on 3 April 2024.