Glance at VRX Silica’s Muchea Project Developments Since Acquisition

  • Nov 11, 2019 AEDT
  • Team Kalkine
Glance at VRX Silica’s Muchea Project Developments Since Acquisition

Western Australia’s silica sand project developer, VRX Silica Limited (ASX: VRX), formerly referred to as Ventnor Resources Limited, focusses on meeting the growing demand of silica sand across the world. The company holds a strong project portfolio, comprising three advanced silica sand projectsMuchea, Arrowsmith North and Arrowsmith Central. In addition, the company possesses Boyatup Silica Sand Project, Warrawanda Project and Biranup Project in its project portfolio.

Among all its significant projects, Muchea is one of the high-grade world-class silica sand projects which can support the large export industry for Western Australia, delivering benefits to the Muchea-Gingin district and the State.

Since its acquisition in July last year, the project has observed several significant developments that are highlighted in the below figure:

Announced Bulk Testwork Results

In September last year, the company announced positive bulk sampling results from its Muchea project, that were sent to a specialist sand metallurgical testing laboratory, CDE Global. The company collected a bulk sample of 300kg from its Muchea project for bulk metallurgical testwork to have an enhanced knowledge of the sand characteristics when subjected to standard processing techniques. The results confirmed the potential of Muchea to produce a sought-after product for glassmaking with very low impurities (< 100ppm Fe2O3).

Declared Maiden Mineral Resource at Project

Subsequent to the bulk sampling results, VRX Silica reported a total Indicated and Inferred Mineral Resource of 191 million tonnes @ 99.6% SiO2, in accordance with the JORC Code 2012 edition, which contained an Indicated component of 19 Mt @ 99.7% SiO2 and an Inferred component of 172 Mt @ 99.6% SiO2.

Submitted Mining Lease Application MLA70/1390

A Mining Lease Application MLA70/1390 was submitted for Muchea project in January 2019. The application included 92% of the total Resource of 191 Mt @ 99.6% SiO2, i.e. 175.2 Mt @ 99.6% SiO2.

Announced Improved Testwork Results and Product Catalogue

In an update on 26th February 2019, the company announced improved results from its testwork program to produce silica sand products from Muchea project. The company reported an improvement in grades to 99.9% SiO2 for the project.

The company also provided a catalogue of products that can be produced from the Muchea project, which included two high-grade products used for ultra-clear glass for the glassmaking industry. Moreover, circuit design for the processing plant was finalised on the basis of this testwork.

Commenced Aircore Drilling Program

An aircore drill program commenced at Muchea project in March 2019 to increase Resources within the area of Indicated Resource and to expand JORC confidence within the area of Mining Lease application.

Updated on Silica Sand Processing Plant Design and Costs

VRX Silica notified about the completion of process circuit design and engineering for the processing plant for its Muchea project on 27th March 2019. CDE Global estimated the cost of the processing plant at $18 million for 2 Mtpa processing plant and assessed the total capex at $25 million per plant.

Received Strong Interest for Silica Sand Products to be Produced from Muchea Project

In April 2019, manufacturers across the Asia-Pacific region showed significant interest in purchasing silica sand products from Muchea project. The company met several potential offtake clients for the sale of high-grade silica sand products from the world-class Muchea project.

Confirmed High Recoveries of Commercial Silica Sand Products

VRX Silica confirmed high recoveries of commercial silica sand products from Muchea that would comply with the customers’ requirements. The company reported that the demand for these silica sand products is robust around the Asia Pacific region. The following figure summarises the recovered products:

Reported Aircore Drilling Program Results

The results of the aircore drilling program were announced in June 2019, that highlighted an increase in Muchea total Mineral Resource Estimate by 9% to 208 Mt @ 99.6% SiO2. The Indicated and Inferred Mineral Resource also increased by 49% and 4% to 29 Mt @ 99.6% SiO2 and 179 Mt @ 99.6% SiO2, respectively.

Formed Strategic Alliance with China Southern Glass

One of the prominent architectural glass manufacturers of Peoples’ Republic of China, China Southern Glass entered into a MOU with VRX Silica in July 2019 to form a strategic alliance with regards to Muchea project. The strategic alliance highlighted VRX Silica’s potential for a major, top-notch silica sand mining operation at Muchea and endorsed the company’s review of expanding silica sand supply crisis in the Asia-Pacific region.

Released Muchea BFS and Maiden Ore Reserve

Marking a major achievement, VRX Silica reported outstanding financial metrics of Muchea in Bankable Feasibility Study (BFS), underlining the project’s capability of producing high-grade silica sand products. An ungeared NPV10 of $338 million was announced based on twenty-five years of a potential mine life of more than 100 years.

Furthermore, the company announced a total Probable Ore Reserve of 18.7 Mt @ 99.9% SiO2 with 14.6 Mt @ 99.9% SiO2 in the Mining Lease application area, adding that three saleable silica sand products would be produced for different markets from the processing plant.

It is worth pointing out that VRX Silica has made great progress at Muchea since the acquisition of the project in July 2018. The company is on track to undertake further developments at the project, expecting the commencement of production by December 2021.

Take a Look at VRX Silica Limited Announces $4 Million Capital Raising


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