VRX Silica (ASX:VRX) Adds Another Jewel to its Crown, Secures Mining Lease for Muchea Project

  • October 29, 2020 08:56 PM AEDT
  • Team Kalkine
VRX Silica (ASX:VRX) Adds Another Jewel to its Crown, Secures Mining Lease for Muchea Project

Summary

  • VRX Silica (ASX:VRX) announces the grant of a Mining Lease for its advanced Muchea project.
  • The Mining Lease (M70/1390) covers an area of over 1,000ha, which can support over 25 years of production as per the Muchea project’s BFS.
  • The silica sand player also intends to seek access to the FNA ground to extend the Muchea project’s mine life beyond 25 years.
  • The Mining Lease area includes Probable Ore Reserve of 14.6Mt (grading 99.9% SiO2) and a portion of Inferred Mineral Resource of 61.4Mt (grading 99.6% SiO2).
  • VRX Silica is also in the process of completing further studies and compilation of essential data to secure environmental approvals for the advancement of Muchea Project.
  • The Company looks forward to accelerating negotiations to conclude sales contracts for high-grade silica sand products.
  • VRX plans to secure the required funding for the project’s $32 million development.
Gold MTF non-AMP

VRX Silica Limited (ASX:VRX) shares rallied over 11 per cent on 29 October 2020 following an update on the grant of a Mining Lease for its advanced Muchea project. The grant represents a substantial milestone and a great leap forward in VRX Silica’s journey of becoming a long-life international supplier of high-grade silica sand.

The Mining Lease grant follows the signing of a Native Title Mining Project Agreement for Muchea project in January this year. Under the agreement, the Whadjuk People provided their consent to the grant of the Mining Lease plus Miscellaneous Licences for the project within the Native Title claim area.

Grant Area Supports +25-Year Mine Life

The Mining Lease (M70/1390) covers an area of over 1,000ha, which can support over 25 years of production as per the Muchea project’s BFS (Bankable Feasibility Study). Moreover, the grant area comprises the development area and clears passage for the advancement of Muchea project with a post-tax NPV10 of $338 million.

Below table represents the key outcomes of Muchea project’s BFS:

The silica sand player also intends to seek access to the FNA ground to extend the Muchea project’s mine life beyond 25 years. The FNA ground lies within the Exploration Licence E70/4886 and adjacent to the Mining Lease, which is a conversion of a portion of Exploration Licence. The ground is located outside of the existing proposed development area and thus, does not affect the 25-year production life modelled in BFS.

Probable Ore Reserve & Inferred Mineral Resource

The Mining Lease area includes Probable Ore Reserve of 14.6Mt (grading 99.9% SiO2) and a portion of Inferred Mineral Resource of 61.4Mt (grading 99.6% SiO2). VRX Silica laid out an initial production target of 48.3Mt from the Muchea Project in the BFS, which will be sourced from this Probable Ore Reserve and Inferred Mineral Resource.

During the first 9 to 10 years of mining operations, the Company aims to mine solely from the Probable Ore Reserve, which has been estimated from the Indicated Mineral Resource. The Probable Ore Reserve constitutes ~30% of the projected total production target over a 25-year mine life.

Notably, the Company has already finalised all the necessary work to transform the Indicated Mineral Resource to Probable Ore Reserve. Currently, the Indicated and Inferred Mineral Resource Estimates at the Muchea project stand at 29 Mt @ 99.6% SiO2 and 179 Mt @ 99.6% SiO2, respectively.

To Know More on Muchea Project’s Mineral Resource Estimate, Click Here!

Environmental Approval Process Underway

VRX Silica is also in the process of completing further studies and compilation of essential data to secure environmental approvals for the advancement of Muchea Project. The studies and data are expected to support formal referrals to the State Environmental Protection Authority (EPA) and the Federal Department of Agriculture, Water and Environment (DAWE).

VRX Silica and its environmental consultants have undertaken pre-referral discussions with representatives from the EPA and DAWE. Moreover, the Company obtained valuable feedback as to requirements for these referrals.

Going forth, the Company is expected to seek quick approval for the issue of a mining permit and its mine plan from the DMIRS (Department of Mines, Industry Regulation and Safety).

Interesting Read: VRX Silica (ASX:VRX) Eyeing Grant of Mining Leases for Arrowsmith Projects, Shares Soar ~20%

 

 


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