VRX Silica Limited Announces $4 Million Capital Raising

VRX Silica Limited is a silica sand explorer headquartered in Australia, listed with code ‘VRX’ on the Australian Stock Exchange. The company has made substantial progress so far with its advanced silica sand projects – Muchea and Arrowsmith projects. The company is ideally placed to tap opportunities in the growing silica sand market, backed by exceptional project economics.

To accelerate the development of its advanced silica sand projects, the company has recently announced an update regarding $4 million capital raising via a placement, for which it has received outstanding support from new institutional and sophisticated investors and existing investors.

Details of $4 million Capital Raising

VRX Silica has recently reported about the completion of a bookbuild to raise $4 million capital (before costs). The placement will include the issue of about 34.8 million new fully paid ordinary shares at an issue price of 11.5 cents each.

VRX Silica notified that the securities will be offered to a range of sophisticated and institutional investors, including new investors and existing shareholders. The company mentioned that participants in the placement will be issued one option for every two shares subscribed for in the placement, exercisable at 18 cents and expiring 18 months from their date of issue.

Scheduled to settle on 12th November 2019, the placement falls within VRX Silica’s current placement capacity under Listing Rule 7.1. The company cited that Hartleys Limited acted as lead manager to the placement.

The funds raised under the placement will be used to speed up the advancement of the Muchea, Arrowsmith Central and Arrowsmith North silica sand projects, including:

  • Hydro and resource drilling,
  • Long lead capital items,
  • Permitting and approvals,
  • Detailed engineering work, and
  • Working capital purposes.

VRX’s Managing Director, Mr. Bruce Maluish, was delighted with the strong demand shown by existing and new shareholders in the placement. He believes that funds raised via the placement will enable the company to rapidly advance the development of its projects.

The current capital raising is followed by the company’s previous share placement completed in March 2019, that also received strong interest from investors.

Successful $2.26 Million Capital Raising in April 2019

Previously, the company raised $2.26 million via a share placement to professional and sophisticated investors in March 2019. Under the placement, about 37.7 million new fully paid ordinary shares were issued at an issue price of $0.06 per share to a wide range of investors.

The placement received strong support from a range of institutional and sophisticated investors together with existing shareholders, with VRX directors committing to subscribe for an aggregate of 4.3 million shares (representing about $260,000) under the placement, subject to shareholder approval.

The capital thus raised was intended be utilised for the following purposes:

  • Completion of feasibility studies and progression of environmental approvals and mining lease applications at the Arrowsmith and Muchea Silica Sand Projects.
  • Exploration activities at the Boyatup Silica Sand Project and Warrawanda HPQ Project.
  • General working capital requirements.

In the financial year 2019, the company also raised $2.4 million for undertaking exploration and development activities at its Arrowsmith and Muchea Projects.

VRX Silica received strong support for the equity capital raisings, demonstrating continued investors’ confidence in the company’s growth prospects. This confidence is driven by the company’s advanced silica sand projects that possess outstanding project economics and logistics, with a combined NPV10 of $727 million (see figure below).

VRX Silica is well positioned to spur the development at its Arrowsmith and Muchea projects, backed by its strong management and strengthened balance sheet.

As on 4th November 2019, VRX closed the day’s trading at $0.125. The company’s stock has delivered a huge return of about 130 per cent in the last six months.


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