Perth-based VRX Silica (ASX: VRX) has received indicative interest from three separate distributors to purchase up to 590,000 tonnes of silica sand per year from its Western Australian projects.
The company, formerly known as Ventnor Resources before its name change last week, announced three non-binding letters of intent (LOI) from distributors in the Asia-Pacific region.
The first LOI is from Si Resources Corporation, a wholly-owned subsidiary of Phillippines-based Rock Energy International Corporation, asking for 290,000 tonnes per annum of silica sand to supply to the Philippine glass bottle manufacturing industry as well as other industrial users.
This tonnage is expected to be met by production from VRX’s Arrowsmith silica sand project, located 270km north of Perth in Western Australia.
The Arrowsmith project is also expected to supply 100,000tpa of high purity silica sand to Korea’s Dong A Heung-Eop Mining Co (DAHEM) in a second offtake deal.
According to VRX, DAHEM has been one of the leading suppliers of casting sand to the Korean foundry industry for more than half a century.
The third LOI covers the supply of 200,000tpa to China-based Shanghai GEEYAH International Trading Co, a leading supplier of silica sand to the fibreglass market and more recently, to the solar panel cover glass market.
This tonnage is expected to be met by production from VRX’s Muchea project, located south of Arrowsmith and closer to the Perth.
“The receipt of these three LOIs supports the company’s research that there is significant demand for silica sand products of the type capable of production from the company’s Arrowsmith and Muchea silica sand projects,” VRX managing director Bruce Maluish said.
“This is a solid foundation for the company’s initial aim of establishing demand for more than 1 million tonnes per annum from each individual project area,” he added.
Silica sands projects
Based on exploration and testwork, VRX is confident its two silica sands projects can “readily meet the specifications and tonnage sought” under the LOIs.
At the start of October, it announced a maiden inferred mineral resource for its Arrowsmith project of 193.6 million tonnes of silica sand grading at 98% silicon dioxide.
In November, it announced a maiden inferred resource at Muchea of 191Mt of silica sand at 99.6% silicon dioxide, including 19Mt at 99.7% silicon dioxide.
VRX also holds the Warrawanda nickel project in northern Western Australia and granted tenements making up the Biranup gold and base metals project in the state’s goldfields region.
The Biranup asset is currently under option for partial sale and farm-in joint venture by Metalicity (ASX: MCT).
Name change from Ventnor Resources
Last week, Ventnor Resources officially changed its name to VRX Silica following a unanimous vote at the company’s annual general meeting.
According to the company, the new name better reflects its objective of becoming a large-scale supplier of silica sand to the global market.
“The new company name of VRX Silica Ltd removes any ambiguity as to the commodity in which the company is specialising and will be easily identified by international customers and potential clients,” it stated.
VRX shares rose 20% to $0.15 on today’s news by afternoon trade.