The growing demand for silica sand, along with a broad use of its applications across various industries, have brightened the prospects of silica sand players worldwide. Going forth, acceleration in manufacturing output and construction spending are anticipated to drive growth in significant silica sand-consuming industries, including foundry, glass and building glass products sectors.
Australia's renowned silica sand player, VRX Silica Limited (ASX:VRX) is tapping this lucrative market opportunity via its advanced silica sand projects capable of production. The Company's advanced projects, including Muchea, Arrowsmith Central and Arrowsmith North, are well placed to produce high-grade saleable products for different international markets, particularly the Asia-Pacific region.
BFS Outcomes, Source: Company's Report (18th October 2019)
What make these projects an ideal venture to capitalize on silica sand's robust market outlook is the access to sound infrastructure.
In this context, let's gaze through the Company's plan to meet infrastructural requirements of its advanced silica sand projects:
World Class High-Grade Silica Sand Project - Muchea Project
The Company's top-grade Muchea project is a suburb of the Shire of Chittering, located on the Brand Highway 50 kms to the north of Perth. The Brand Highway is proximal to the project area with access by Timaru Road or Airfield Road from the north.
The Company notified that its project would be accessed via the sealed Timaru Road from Brand Highway. Moreover, the rail line to the Kwinana Bulk Terminal, which runs east of the Brand Highway, would be used to transport the processed silica sand to the Kwinana Bulk Terminal for bulk export.
The Company mentioned in its Bankable Feasibility Study (BFS) that the Muchea project would require its own installed water infrastructure. For raw water, the processing would recycle 95 per cent of the water and need 500ML per year as top up process water.
The Company has planned to store water in an 80m x 80m lined storage dam built near the feeder station. Moreover, two additional similar sized dams would be needed to polish processing plant return water prior to being re-used.
Water supply would be done from a bore sunk to the Yarragadee deep acquifer and piped to the storage dam at the site of processing plant. In addition, the potable water requirements would be met from off site and trucked to a day storage tank.
As per the Company, the power can be sourced from high tension reticulated power in the vicinity of Brand Highway. The project is located near high tension grid power which can be reticulated by aerial power lines when needed.
The Company has further planned to conduct a study to ascertain the economics of retrieving the nearby Dampier and Dongara gas pipelines to power a long-term power facility.
Total power requirements:
- 4 Megawatts at the processing plant site.
Additional 4 megawatts for the feeder and pump stations.
Two Other High-Grade Projects - Arrowsmith North and Arrowsmith Central
The Company informed that Arrowsmith North site can be accessed via an existing road that extends south to the Brand Highway, while the Arrowsmith Central site can be accessed via an existing road that extends from Beekeepers Road to the south or east to the Brand Highway.
The Eneabba-Geraldton Railway line which lies to the south west of the Arrowsmith North and western part of the Arrowsmith Central would be used to transport the processed silica sand to the Geraldton Port for bulk export.
Both the projects would be accessed via a 6 km dedicated road (an upgraded existing cleared track) from a junction with the adjacent Brand Highway.
With processing and storage plan for water remaining the same as Muchea project, the water supply for both these projects would be done from two bores sunk to the Yarragadee North deep acquifer and piped to the storage dam at the site of processing plant.
The Company has pending applications for a Miscellaneous License for the Search for Water over the Mining Lease area for all its three advanced silica sand projects.
The Company has planned to source power for these two projects from a dedicated diesel fired power supply near the off-site processing plant facility. The power requirements for the mining area and feeder would be reticulated by aerial power lines.
Total power requirements remain same for both the projects:
- 4 Megawatts with 5 Megawatts installed with redundant capacity.
It is worth noting that the Company has already framed a streamlined process to meet the infrastructure requirements at its advanced projects. The Company is in a strong position to satisfy the growing demand for silica sand from its key projects, supported by a well-designed infrastructure plan. The robust financial metrics demonstrated by recent BFS studies position the company in a favourable position to produce high-value silica sand products once the projects enter the production phase.
VRX closed the trading session at $0.098 on 17th February 2020.
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