VRX Silica (ASX:VRX) inks non-binding MOU with Xodus Group  

Shares of VRX Silica Limited (ASX:VRX) marked an uptick of 9.7% to A$0.170 early this morning (as of 10:12 AM AEDT) following a significant update.

The silica sand explorer has signed a non-binding memorandum of understanding (MOU) with Xodus Group to explore the future supply of renewable hydrogen to Muchea and Arrowsmith North Silica Sand Projects in Western Australia (WA). Xodus is an international energy consultancy, which specialises in the integration of environmental science, engineering, and management to offer holistic support and services in the energy transition.

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A Xodus-led consortium is advancing Project MercurHy for the industrial-scale production of hydrogen gas using renewable energy in the WA’s Mid-West region. The industrial-scale development of Project MercurHy is expected to produce sufficient supplies to power energy-hungry glass-manufacturing facilities, potentially at both Muchea and Arrowsmith North projects.

Key details of MOU

The MOU establishes a platform for strategic confidential communication as well as future cooperation between the two parties. It contemplates the sharing of information with a view to a potential offtake of between 9,000-11,000 tonnes of hydrogen per year, which is adequate to supply a significant glass-making facility.

The non-binding MOU expires on 30 June 2023 and could be extended by mutual consent for an additional 12 months. VRX Silica may novate the MOU to a third party intending to set up a glass-making facility using the Company-supplied silica sand.

The MOU aims to explore the potential supply of green hydrogen to prospective, nearby glass-manufacturing facilities. VRX Silica highlighted that glass manufacturing requires substantial energy inputs, and the supply of green hydrogen to power such glass manufacturing facilities could result in the production of net-zero glass.

Given the high quality and volume of silica sand at both Muchea and Arrowsmith projects and the close proximity to energy infrastructure at both locations, the Company is exploring the potential for the development of glass-manufacturing facilities to reap the advantage of this tremendous opportunity.

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Glass manufacturing opportunity in WA

VRX Silica’s Arrowsmith and Muchea projects have substantial Mineral Resources that comprise high-grade silica sand suitable to manufacture glass, with Muchea especially suitable for solar panel glass. The substantial volumes and high-quality of silica sand at both the Company’s projects lend themselves to the potential for advancement of nearby glass-manufacturing facilities.

This potential has attracted the interest of the WA Government and international glass manufacturers and could possibly deliver billions of dollars in foreign investment into the State.

The establishment of a glass-making facility in WA is expected to provide the following benefits:

• trigger a sizeable industry investment,
• provide long-term production based on the Company’s long-life silica sand supplies, and
• create a substantial number of permanent, long-term jobs in the State.

Glass production could produce solar panel-quality glass from the Muchea project and containers and flat glass from the Arrowsmith North project, including substantial recycling of glass that is increasingly at the forefront of glass production in Australia.

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