Published On: August 31st, 2023
VRX Silica Limited (ASX: VRX) (VRX Silica or Company), an advanced pureplay silica sand company led by MD Bruce Maluish, has announced a significant capital-raising initiative of $3 million. The capital will be utilised to advance critical operations and equipment procurement for their upcoming projects, particularly at Arrowsmith North and Muchea sites. The $3 million strategic funding comprises a $1.5 million Placement and an additional $1.5 million share purchase plan (SPP), both designed to fuel the Company’s growth and expansion. As the Company continues its trajectory as a major player in the silica sand industry, this capital injection represents a significant step towards meeting the growing demand for silica sand in various high-demand sectors.
Figure 1: Locations of Arrowsmith, Muchea, and Boyatup Silica Sand Projects
Placement Details
The Company has successfully secured firm commitments for a $1.5 million Placement, which comprises the issue of 12.5 million new fully paid ordinary shares to institutional and sophisticated investors at an offer price of 12 cents per share. This Placement aims to raise capital for immediate funding requirements. The offer price reflects a 17.2% discount to the last closing price of 14.5 cents and a 20.4% discount to the 5-day volume-weighted average price (VWAP) of 15.1 cents. Individuals involved in the Placement will be entitled to subscribe for free-attached options. Canaccord Genuity (Australia) Limited took on the role of Lead Manager for Capital Raising.
Share Purchase Plan (SPP)
Along with the Placement, VRX Silica has introduced a share purchase plan (SPP) for eligible shareholders to raise an additional $1.5 million. Shareholders who meet the eligibility criteria as of the record date of 7:00 p.m. (AEST) on August 25th, 2023, and with a registered address in Australia and New Zealand will be invited to participate. The SPP allows eligible shareholders to acquire up to $30,000 worth of new shares at the same offer price of 12 cents, aligning with the price of the Placement. The SPP participants will be entitled to free-attaching options. The SPP offer, which is not underwritten, is expected to open on September 4th 2023 and close at 5:00 pm (AEST) on September 22nd 2023.
Free-Attaching Options
The Placement and the SPP offer an attractive incentive: Participants will receive free-attaching options on a 1:2 basis. It means that for every two new shares issued, shareholders will be entitled to one free attaching option. These options carry an exercise price of 18 cents and are set to expire on August 31, 2025. While the options will not be immediately quoted on the ASX, the Company retains the right to seek quotation later.
Use of Funds
The capital raised through this initiative is earmarked for specific purposes and will be directed towards financing further operational work and equipment acquisitions in anticipation of approvals at the Arrowsmith North project and additional activities at the Muchea site. Additionally, the capital will contribute to general working capital requirements and cover the associated costs of the capital-raising efforts.
Capital Raising Timetable
The Company has established a comprehensive timetable for the capital raising events:
Figure 2: Capital Raising Schedule
It’s important to note that the Company reserves the right to modify these dates within its discretion, with all times listed in Australian Eastern Standard Time (AEST).
Company Overview
VRX Silica Limited is a leading company in the silica sand sector under the leadership of MD Bruce Maluish. As the most advanced pureplay silica sand company listed on the ASX, it is committed to developing its silica sand projects across multiple sites in Western Australia, including Arrowsmith (North, Central, and Brand), Muchea, and Boyatup.
Silica sand, an indispensable commodity in glassmaking, is vital in various industries, from conventional glass to cutting-edge applications like high-tech glass and solar panels. With an ever-growing demand and supply shortfall in the Asia-Pacific region, VRX Silica is well-positioned to address this market gap.
Arrowsmith and Muchea Projects
The Arrowsmith North silica sand project, located approximately 270 km north of Perth, is a significant venture with a projected 25-year mine life. This operation aims to produce over 2 million tonnes per year of high-grade silica sand for export to various glass markets in Asia, including foundry, container, and flat glass.
The Muchea Silica Sand Project, located 50 km north of Perth, is poised to contribute ultra-high-grade silica sand, crucial for manufacturing ultra-clear glass in high-tech applications such as solar panels. Hence, the Muchea silica sand project aligns with the demand for specialty glass required by emerging industries.
About Mr. Bruce Maluish, Managing Director of VRX Silica Limited
Mr Bruce Maluish, the Managing Director of VRX Silica, has extensive experience of more than 40 years in the mining industry. His expertise covers various resource sectors, such as gold, nickel, and mineral sands. MD Bruce Maluish, throughout his career, has held significant leadership roles in well-known organisations like the Monarch Group of Companies, Abelle, Hill 50, Matilda Minerals, and Forsyth Mining. He is well-known in the industry for his many skills, from setting up and marketing IPOs to the identification of projects and negotiations with clients.
Figure 3: Mr. Bruce Maluish, Managing Director of VRX Silica Limited
Investor’s Outlook
- The launch of a $3 million capital raising by VRX Silica has garnered significant attention, revealing promising prospects for investors.
- The Company has already secured firm commitments amounting to $1.5 million, underscoring the confidence of institutional and sophisticated investors in VRX Silica’s potential.
- A Placement of new shares is underway, offering investors a chance to participate at 12 cents per share. This presents an avenue for potential capital growth.
- These forward-looking steps of VRX Silica indicate preparation for anticipated approvals, setting the stage for future growth.
- As of August 28th, 2023, VRX Silica‘s share price stood at AUD 0.135 per share, with an average 52-week stock trading range between AUD 0.180 to AUD 0.093 per share.
- VRX Silica has 560.4 million shares on issue and a market capitalisation of approximately AUD 75.65 million as of August 28, 2023.
- The Company’s progress in different projects, especially the Arrowsmith North Silica Sand Project, also promises a prosperous future.
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