VRX Silica reports busy quarter of exploration at Arrowsmith North silica sand project

VRX Silica ASX Arrowsmith north Muchea
VRX Silica spent the March quarter advancing exploration activities as well as offtake negotiations and environmental approvals.

The three month period ending 31 March was a busy one for high-grade sand explorer VRX Silica (ASX: VRX) as it advanced the development of its flagship Arrowsmith North project in Western Australia.

In its latest quarterly report, the Perth-based company said drilling, environmental approvals and offtake activities had dominated the period as its moves closer to project start up.

Grade control drilling

In March, VRX completed a 10-day grade control drilling program comprising 130 tight-spaced holes and designed to upgrade Arrowsmith North’s ore reserve statement of 204 million tonnes at 99.7% silica oxide to a measured resource and proven reserve.

Assays due next month are expected to increase the company’s geological knowledge of the deposit and confirm the continuity and homogeneity demonstrated by previous work.

It is hoped the results will generate a significant amount of added raw material for supplementary bulk metallurgical test work to confirm the design and operating parameters of the processing plant and for shipping approvals.

VRX is also targeting additional commercial samples for despatch to potential offtake partners as demand for its silica sand continues to grow.

Sources of quality silica sand supply throughout the Asian region are believed to be shrinking rapidly, fuelling increased interest from potential customers that are already aware of the supply problem.

Environmental measures

In March, VRX submitted its plans for environmental measures at Arrowsmith North to the state’s Environmental Protection Authority.

The referral was the culmination of wide-ranging environmental studies conducted over the past three years as well as extensive pre-referral consultation with the EPA.

The plans promised a low carbon footprint operation, continuous rehabilitation of local vegetation and minimised residual impacts on the environment.

VRX said it had developed a “unique and progressive mining and rehabilitation method” specifically for its silica sand projects to minimise the environmental impact of its mining activities.

The submission is reported to be a “significant milestone” in the company’s goal of becoming a leading supplier of high-quality silica sand to the global market.

Offtake discussions

During the quarter, VRX continued discussions with potential offtake partners for the sale of silica sand product from Arrowsmith North.

The company continues to receive enquiries to purchase sand and demand remains strong.

“We are well-positioned to fill this demand and, as [we] develop our silica sand projects, we will remain focused on delivering long-term dependable offtake partnerships with significant industrial participants in the Asian market,” it said.

Discussions were also held with potential debt financiers for Arrowsmith North and VRX’s other silica sand projects, and VRX has instigated an independent technical review to support its due diligence requirements.

Muchea project

Elsewhere in its project suite, VRX has spent time on its Muchea silica sand asset with further studies and compilation of data to support formal referrals to the state’s agriculture, water and environmental authorities.

The company has progressed an expansion of the project’s proposed development area to extend the operation to beyond its current 25 year lifespan.

Primary component

Silica sand is the primary component in standard and specialty glass and is also used for metal casting and production, chemical production, paint and coatings, ceramics, filtration and water production, and oil and gas recovery.

Construction sand is the primary structural component in a wide variety of building and construction products.

Prior to the acquisition of Arrowsmith North in 2017, VRX’s preliminary test work indicated strong potential for the project to produce sand suitable for use in glassmaking and construction.

Global silica sand demand is increasing as a result of booming technology and construction sectors across the Asia Pacific region.

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