- VRX Silica Limited (ASX:VRX) has recently published its RIU Sydney Resources Round-up presentation on the ASX.
- The Company has obtained strong interest from its potential customers in South-East Asia.
- VRX Silica expects the production to commence from its Arrowsmith North project in late 2021.
Silica sand explorer VRX Silica Limited (ASX:VRX) has recently released its RIU Sydney Resources Round-up presentation on the ASX. The presentation covers the demand-price dynamics of silica sand, outlines planned developments at the Company’s projects and familiarises with the VRX Silica’s mining method.
VRX Silica is the only ASX-listed, pure-play silica sand stock that owns advanced development assets with over 100 years of production life. The Company holds three high-value silica sand projects in the Tier 1 mining region, Western Australia – Arrowsmith North, Arrowsmith Central and Muchea. Interestingly, mining leases and miscellaneous licenses have been granted for these projects, with the environmental permitting process being well advanced.
These projects represent multi-decade-scale-contiguous sand deposits with a combined resource of 1,056 Million tonnes, at SiO2 grade of 99.6% to 99.9%. Notably, the scale of VRX Silica’s projects could prove a trigger for the long-term opportunity for glass manufacturing sector in Western Australia.
Demand-Price Dynamics of Silica Sand
As per VRX Silica, silica sand is the most-used commodity on the earth after air and water. It is used in all types of glassmaking, including high-tech glass and specialty solar panel. Besides, it is also a key ingredient in concrete.
But silica sand is a finite resource that is running out of supply. The Asia-Pacific region is experiencing a significant supply shortfall, driving the price of silica sand up enough to make mining in Australia and shipping to Asia profitable. VRX Silica is tapping this lucrative opportunity in the silica sand market via its high-grade projects in Western Australia.
The Company stated that the price of silica sand is expected to increase over the coming years across Asia-Pacific countries amid strong demand and supply constraints. Meanwhile, key countries in the Asia Pacific region have unmet demand from domestic production only.
At the time of rising global supply imbalance, VRX Silica has obtained strong interest from its potential customers in South-East Asia.
World-Class Portfolio of Projects
VRX Silica holds a top-notch portfolio of silica sand projects in Australia – Muchea, Arrowsmith North and Arrowsmith Central. Each of these projects has access to established infrastructure and can be run independently.
The Arrowsmith North project boasts an ore reserve of 223 Million tonnes at SiO2 grade of 99.7%. The project is estimated to have over 100 years of mine life and 25-year production life.
According to VRX Silica, the Arrowsmith North project will lead the disciplined development of the Company’s world-class assets. The Company expects the production to commence from this project in late 2021.
The Muchea project is a large-scale, low impurity and high-grade silica sand project, which has access to the premium ultra-clear gas market. The project holds the potential to produce a very high-quality product of 99.9% SiO2 grade with less than 100ppm Fe2O3 after processing.
The Company expects the construction/production to commence from this project in late 2022.
Exclusive Mining Method
VRX Silica has developed a progressive and unique mining method – Vegetation Direct Transfer (VDT) - for its silica sand projects. Vegetation Direct Transfer is a made-for-purpose mining method designed around instant rehabilitation.
The method lends itself to extensive and rapid regeneration of impacted areas on the basis of continuous rehabilitation as silica sand mining advances.
It is worth noting that the root structures in the loose sand are relatively shallow at 200-300m in depth. The VDT method removes a 400m deep sod, conserving the topsoil that contains the vast majority of native flora and invertebrate fauna, besides keeping its microbial contents intact.
VRX Silica shares traded at AUD 0.295, with a rise of over 3.5% on 6 May 2021.