VRX Silica confirms Arrowsmith North silica sand project will lead its development program

Emerging producer VRX Silica (ASX: VRX) has confirmed its Arrowsmith North silica sand project in Western Australia will lead a staggered and disciplined development program ahead of other projects at Muchea and Arrowsmith Central.

Progress continued during the June quarter, with the lodging of Arrowsmith North’s environmental review document with the state’s regulator.

The document is a comprehensive summary of the project’s environmental setting including the mine and infrastructure, operational elements, the extent of effects on the environment and proposed rehabilitation and closure plans.

It is required under the state’s environmental process and will be released for public comment following the regulator’s own review.

VRX said an important feature of the rehabilitation would be the use of a vegetation direct transfer (VDT) method which is expected to achieve the best restoration of the mine area habitat.

The indicative timetable for development of Arrowsmith North would see final environmental approval received in December, with a six-month construction phase scheduled to start in January.

Capital expenditure

In May, VRX commenced project capital expenditure for the Arrowsmith North processing plant, with the purchase of two major items of sand processing equipment being a feed trommel and “banana” vibrating screen.

The trommel was previously part of a mineral sands operation and is now at Bunbury-based Hotweld Engineering for a refurbishment evaluation and quote.

The screen was previously in use at a lithium processing plant and has been relocated to Bunbury mechanical equipment workshop RCR for refurbishment.

The acquisition represents significant lead time and capital savings, and follows VRX’s strategy of refurbishing high-quality secondhand equipment to avoid issues associated with ongoing global supply chain disruptions.

Arrowsmith Central approvals

During the June quarter, Arrowsmith Central moved to the next stage of the environmental approval process with the submission of a scoping document detailing the studies required to inform project assessment.

The mining development site has been selected to avoid environmentally-sensitive areas, such as large trees which are home to the native Carnaby cockatoo.

In July, VRX commissioned Perth-based Mattiske Consulting to conduct a detailed springtime flora and vegetation study on a selected area over 3.5 square kilometres.

The results will be added to work from a desktop survey in 2017 and an extensive field survey in 2018.

VRX also lodged a program of work, including a native vegetation clearing permit application, with the mining regulator to conduct further detailed drilling and sampling within the selected area.

Aircore drilling

VRX conducted a 206-hole aircore drilling program at the Boyatup silica sand project near Esperance, where previous results have indicated in-situ sand grades up to 99.7% silica oxide with potential to produce a very low iron oxide product.

Drilling took nine days with final assay results received in late June.

VRX said the data would be assessed to enable a maiden mineral resource estimate.

Drilling also produced bulk material for metallurgical testwork to determine potential product quality.

Tax incentive

In April, VRX registered for a research and development tax incentive application with AusIndustry for the year ending June 2021.

The claim was for costs incurred in the development of a new process route for high-grade silica sand, which includes the recovery and testing of metallurgical composite samples, preparation and analytical testwork to determine a process circuit design and subsequent engineering.

VRX paid fees during the quarter and received $167,229 in July after fees for the year ending June 2021.

An additional claim will be made for the year ending June 2022.