Perth-based VRX Silica (ASX: VRX) has announced a significant upgrade to the mineral resource estimate at its Arrowsmith North silica sand project in Western Australia, based on results from a recent drilling program.
The company today reported a 398% increase to 771 million tonnes at 98% silicon dioxide, with 248Mt of the estimate being an indicated resource.
This follows VRX’s announcement last month of an upgraded mineral resource at its Muchea silica sand project, which now stands at 208Mt at 99.6% silicon dioxide.
The Arrowsmith North upgrade was based on results from a drilling program undertaken in March.
According to the company, the indicated mineral resource is predominantly within the mining lease application area with the majority anticipated to convert to probable reserves and therefore, an “extremely long-life mining project”.
“Significantly, the mineral resource includes an unpredicted 313Mt of white sand at 98.7% silica,” VRX managing director Bruce Maluish said.
He said a high-grade final product could be produced from the higher-grade feedstock, which is in demand for the foundry, glassmaking and ceramics industries.
“This mineral resource estimation will now allow the company to finalise estimates of ore Reserves which will support the impending bankable feasibility study,” Mr Maluish added.
According to VRX, no more drilling is needed before the company begins mining operations.
However, it plans to undertake further test work on the white sand.
The company said work was also ongoing to complete the process for the mining lease applications and environmental approvals at both the Arrowsmith North and Arrowsmith Central silica sand projects.
In December 2018, VRX received indicative interest from three separate distributors in the Asia Pacific region to take up to 590,000t of silica sand per year from its Arrowsmith and Muchea projects.
In April, the company announced it had received further enquiries and expressions of interest from 20 manufacturers across the region.
These included manufacturers and purchasing agents for smaller shipments of silica sand product for glassmaking in China, Japan, Thailand, Korea, Malaysia, India, Taiwan and the Philippines.
The company also received interest from companies in the foundry industry in South Korea, Japan, Taiwan and the Philippines.
VRX estimated its potential annual silica sand sales to-date totalled 1.6Mt for glassmaking and close to 900,000t for the foundry industry.
At the time of the announcement, the company said it would be able to commit to binding offtake agreements following the approval of its projects’ mining permits.
By afternoon trade, VRX shares were up by more than 21% on today’s resource upgrade news to $0.115.