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

  • November 17, 2020 03:04 PM AEDT
  • Kunal Sawhney
    CEO Kunal Sawhney
    2781 Posts

    Kunal Sawhney is founder & CEO at Kalkine and is a richly experienced and accomplished financial professional with a wealth of knowledge in the Australian Equities Market. Kunal obtained a Master of Business Administration degree from University of T...

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

Summary

  • VRX Silica (ASX:VRX) has secured the grant of Mining Leases for Arrowsmith silica sand projects.
  • The grant follows the Aboriginal Heritage clearance obtained for the Arrowsmith projects early in November 2020.
  • The Mining Leases (M70/1389 and M70/1392) encompass an area of over 3,600ha, which is adequate for more than 100 years of production.
  • The Arrowsmith Central Mining Lease area includes Probable Ore Reserve of 18.7Mt @ 99.6% SiO2, while Arrowsmith North Mining Lease area covers Probable Ore Reserve of 204Mt @ 99.7% SiO2.
  • VRX Silica is now in the process of securing environmental approvals for both Arrowsmith North and Central projects.
Gold MTF non-AMP

Shares of VRX Silica Limited (ASX:VRX) rallied by ~20 per cent to $0.245 during the early trading session on 17 November 2020, following an update on grant of Mining Leases for Arrowsmith silica sand projects. The grant represents another significant milestone for VRX Silica and complements the Mining Lease grant for the Muchea silica sand project received in October 2020.

Moreover, the grant follows the Aboriginal Heritage clearance obtained for the Arrowsmith projects early in November 2020. VRX Silica recently received archaeological and ethnographic clearance for the Company’s proposed works over initial mining and critical infrastructure areas on both Arrowsmith North and Central silica sand projects.

Grant Area Supports +100-Year Mine Life

The Mining Leases (M70/1389 and M70/1392) encompass an area of over 3,600ha, which is adequate for more than 100 years of production, as per Arrowsmith projects’ BFS (Bankable Feasibility Study). Besides, the grant paves the way for the development of Arrowsmith and Muchea projects with a combined post-tax NPV10 of $728 million.

Below table summarises the key outcomes of Arrowsmith and Muchea projects’ BFS:

It is worth noting that VRX Silica’s BFS has set out production targets of 47.7Mt and 39.6Mt from the initial 25 years of mine life at Arrowsmith North and Central projects, respectively.

Mining Lease Area Contains Probable Ore Reserve

The silica sand explorer mentioned that the Arrowsmith Central Mining Lease area includes Probable Ore Reserve of 18.7Mt @ 99.6% SiO2, while Arrowsmith North Mining Lease area covers Probable Ore Reserve of 204Mt @ 99.7% SiO2.

Both Arrowsmith North and Central projects’ Probable Ore Reserves were estimated along with their BFS released in Q3 2019. These reserves were estimated from their respective Mineral Resource Estimates or MRE, as stated below:

  • Arrowsmith North’s MRE stands at 771 Mt @ 98.0% SiO2, which comprises an Indicated Mineral Resource of 248 Mt @ 97.7% SiO2 in addition to an Inferred Mineral Resource of 523 Mt @ 98.2% SiO2.
  • Arrowsmith Central’s MRE stands at 76.5 Mt @ 96.8% SiO2, which comprises an Indicated Mineral Resource of 28.2 Mt @ 96.6% SiO2 in addition to an Inferred Mineral Resource of 48.3 Mt @ 96.9% SiO2.

Environmental Approval Process in Progress

VRX Silica is now in the process of securing environmental approvals for both Arrowsmith North and Central projects.

For Arrowsmith North project, the Company has already submitted an official referral to the Federal DAWE (Department of Agriculture, Water and Environment). However, the Company will follow with a formal referral to the State EPA (Environmental Protection Authority) to obtain environmental approvals.

With regards to Arrowsmith Central projects, VRX Silica is yet to submit formal referrals to the State EPA and the Federal DAWE to secure environmental approvals. Pre-referral meetings with representatives from the EPA and DAWE have provided significant feedback for formal referrals concerning both Arrowsmith projects.

The Company will now seek to fast-track approval for its mine plan and the issue of mining lease permits for Arrowsmith projects from the Department of Mines, Industry Regulation and Safety (DMIRS).

 

 


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