Strong Market Response to VRX Silica’s Update on Arrowsmith North Project


  • VRX Silica Limited’s (ASX:VRX) Arrowsmith North project has progressed to the next stage of the environmental approval process with the EPA.
  • ProjX Engineering has been commissioned to undertake a detailed engineering design for the Arrowsmith North processing plant.
  • The Company has supplied bulk samples to potential offtake partners for furnace testing.

Shares of VRX Silica Limited (ASX:VRX) are trading over 12 per cent higher at AUD 0.247 (as of 1:27 PM AEST) following a Company’s update on the Arrowsmith North Silica Sand Project. In the latest update, VRX Silica notified that its Arrowsmith North project has moved to the next stage of the environmental approval process with the Western Australian Environmental Protection Authority (EPA).

Good Read: VRX Silica Outlines a Rosy Outlook for its Silica Sand Projects

The Company also informed that it has commissioned experienced sand processing engineers, ProjX Engineering, to undertake a detailed engineering design for the Arrowsmith North processing plant. Furthermore, the Company has supplied bulk samples to potential offtake partners for furnace testing.

Progress in Environmental Approval Process

VRX Silica stated that the EPA will assess the Company’s proposal under s39A(1) of the Environmental Protection Act 1986. The proposal will be evaluated at a Public Environmental Review (PER) level of assessment for a four-week period, which started on 18 May 2021.

The silica sand explorer will prepare an Environmental Scoping Document that details the environmental studies that are needed to inform the assessment of the Arrowsmith North project.

Preparation of the Environmental Scoping Document is a fundamental step in the EPA administration procedures. Besides, the Company is confident the Arrowsmith North project has addressed the Environmental Principles, Objectives and Factors of the guidelines for evaluation.

Additional studies that are required to inform the assessment of the project may include greenhouse gas estimate, cultural and heritage assessment, and high-level air quality assessment. Interestingly, VRX Silica has already initiated these studies and plans to finalise them before the end of the PER period.

The Company informed that other government agencies will not be able to approve any approvals related to the full development of the Arrowsmith North project until the EPA process is complete. However, this does not affect the Company’s current development plans, given that investigations and exploration are not restricted.

Related Read: VRX Silica’s Shares Inch Higher on EPA Referral Submission for Arrowsmith North

The EPA’s decision will allow the Australian Government Department of Agriculture, Water and Environment (DAWE) to set their level of evaluation at PER in order to align with the EPA decision. Notably, the ongoing process and timing for environmental approval at Arrowsmith North is moving in line with the Company’s expectations to date.

Engineering and Grade Control

The detailed engineering design commissioned for the Arrowsmith North processing plant is based on the proposed process circuit and the recent testwork results. The design will enable the preparation of a detailed cost estimate besides scheduling for the construction of the proposed processing plant at the project.

After this stage, VRX Silica will specify and tender suitable processing equipment for the processing plant to be procured as early as possible following a decision to mine at the project.

It is imperative to note that the Company has also received assay results and other determinations from the grade control drilling program completed at Arrowsmith North in March 2021. The assays are in line with the Company’s expectations and will allow it to update the Mineral Resource Estimate (MRE) in the area covered by the drilling.

Also Read: VRX Silica Gears Up to Commence Grade Control Drill Program at Arrowsmith North Project

After updating the MRE, VRX Silica intends to undertake a detailed review of the outlined production for the next six years with an overarching mining and processing schedule.

Status on Potential Offtake Agreements

VRX Silica highlighted that potential offtake partners’ interest in its products from the Arrowsmith North project remains incredibly strong and continues to increase. Demand for major bulk samples ahead of binding offtakes from potential partners in Japan, Taiwan and South Korea has led the Company to conduct a significant pilot plant-scale testwork program on about one tonne of Arrowsmith North ore.

Must Read: March quarter brightens VRX Silica’s prospects amid escalating silica sand demand

This testwork program produces sufficient sample sizes of about 50-60kg of final product needed by prominent glass producers in the Asian market for furnace testing prior to finalising offtake agreements. The Company has already sent smaller parcels to foundry manufacturers in South Korea. The process will also allow the Company to further test the Arrowsmith North project’s process circuit design.

Besides, VRX Silica continues to see strong interest from third party debt financiers to fund the construction and development of the processing plant for Arrowsmith North. The Company has initiated its engagement of AMC Consultants to conduct a comprehensive independent technical review of the Arrowsmith North project, which will underpin due diligence by potential financiers on the project.

Interesting Read: VRX Silica Secures a Spot on the MSCI Australia Micro Cap Index





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