VRX Silica’s (ASX:VRX) Stellar Show at Arrowsmith, Muchea Projects Continues


  • VRX Silica Limited (ASX:VRX) delivered an impressive performance in the first half of FY2021, making substantial progress at Arrowsmith and Muchea projects.
  • The Company secured the grant of Mining Leases for its silica sand projects during the period while also progressing with the environmental approvals process.
  • VRX Silica’s cash balance stood at ~A$9.4 million as of 31 December 2020.                                                                                                                                    

Ticking all the boxes with its high-grade exploration endeavours, VRX Silica Limited (ASX:VRX) delivered a strong performance in the first half of FY2021. The silica sand explorer’s recently released half-yearly report reflects its striking progress at Arrowsmith and Muchea projects in terms of securing the necessary permits and approvals.

In 1H FY21, VRX Silica announced the grant of Mining Leases and miscellaneous licences for its Arrowsmith and Muchea projects. Besides, the Company progressed with the environmental approvals process and received Aboriginal heritage clearance for Arrowsmith projects.

Let us quickly browse through the key developments that shaped 1H FY21 as a productive half year for the Company:

Native Title Clearance

VRX Silica announced the conclusive registration of the Yamatji Nation Indigenous Land Use Agreement (ILUA) in October 2020. It cleared the road for grant of the Mining Lease and Miscellaneous Licence applications for the Company’s Arrowsmith Projects.

ILUA settled all Native Title claims over the area of Arrowsmith Projects besides superseding the negotiations that had been continuing in good faith between the Company and the Southern Yamatji People Native Title claimants over the projects.

Aboriginal Heritage Clearance

The silica sand explorer further announced the results of an Aboriginal heritage survey in November 2020 at Arrowsmith Projects. The Company received the archaeological and ethnographic clearance for operations over initial mining as well as key infrastructure areas.

VRX Silica obtained preliminary advice from YMAC, confirming that the Arrowsmith North Access Road, Production Area and Services Corridor have been granted approval for the continuation of stated works for 10 years of production.

Grant of Mining Leases

The Company was granted Mining Leases for both Muchea and Arrowsmith projects in October and November, respectively. The grant of these Mining Leases represents a significant milestone for the Company, indicating a major step forward in its journey to become an international, long-life supplier of high-grade silica sand.

Read More at VRX Silica (ASX:VRX) Celebrates Mining Lease Grant Milestone for Arrowsmith Projects

The Mining Leases for Arrowsmith projects cover an area of more than 3,600 hectares, which is adequate for over 100 years of production. Moreover, the Mining Lease for Muchea project encompasses an area of over 1,000 hectares that can support more than 25 years of production.

Environmental Approvals Process

For the grant of a Mining Permit at the Arrowsmith projects, VRX Silica advanced the environmental approvals process during the half year.

The Company submitted a draft Environmental Referral Document (ERD) to the State Department of Water and Environmental Regulation (DWER) in October 2020. DWER responded with the comments in November that further clarification was needed in the formal ERD, as well as follow-up work and consultation.

VRX Silica now expects submission of the formal ERD to DWER in March 2021 as part of the procedure to attain environmental approvals for the development of its Arrowsmith North project. Along with the environmental approval process, the silica sand explorer will seek approval for its Mining Proposal as well as the issue of a mining permit from the DMIRS (Department of Mines, Industry Regulation and Safety).

In February 2021, the Company attained approval to undertake a trial rehabilitation program of over 7,200m2. This trial will be carried out between late March and April 2021.

Discussions with Potential Customers

During the period, the Company continued discussions with prospective customers in Asia for long-term contracts for offtake of products from Muchea and Arrowsmith projects. These potential customers are located in Thailand, Taiwan, Japan, Malaysia, and South Korea.

The Company has already shipped product samples to potential offtake partners. The recently announced grade-control drilling at Arrowsmith North, planned for this month, is anticipated to generate more commercial samples for interested parties.

Read More at VRX Silica (ASX:VRX) Shares Shine on First Trading Day of 2021

Interestingly, most of the recipients have validated that the silica sand quality fulfils their specification requirements and strengthens their desire to obtain the long-term supply.

The grant of Mining Leases for silica sand projects enables the Company to accelerate discussions to finalise sales contracts for the high-grade silica sand products and secure the required funding for the development of these projects.

Other Developments

In addition to these developments, VRX Silica entered into a conditional agreement with New Energy Metals Limited in July 2020 for the sale of its Biranup Project, an IPO, and the listing of that company on the ASX. The Company anticipates the completion of these transactions on 30 June 2021.

Furthermore, the Company announced A$7 million capital raising (before costs) via a share placement to sophisticated, institutional, and professional investors during the period. The placement placed it in good stead to rapidly accelerate the development of its silica sand projects.

VRX Silica closed the half year with a strong cash balance of ~A$9.4 million as of 31 December 2020.

With all three Mining Leases granted at the Muchea Project and the Arrowsmith Projects and the development of these projects on track, the Company is on the cusp of becoming an international player in high-grade silica sand supplies.

VRX Silica shares are trading at A$0.315 with a rise of ~7 per cent as of 1:53 PM AEDT.





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