Published On: March 8th, 2023
VRX Silica Limited (ASX: VRX) (VRX or Company) has signed a Letter of Intent (LOI) with ResourcesWA, a company specialising in energy and mining consulting. The LOI aims to explore a potential power supply solution for their Arrowsmith North Silica Sand Project by directly utilising gas from a nearby wellhead.
The objective of the LOI is to assess the feasibility of setting up a powerhouse equipped with containerised gas reciprocating engines at a nearby gas wellhead location. The powerhouse would be connected to the existing gas plant through a direct offtake and reticulation to the Arrowsmith North site through a dedicated transmission line.
ResourcesWA has a team with ample resources and expertise in project development, delivery, and asset management. The LOI provides a detailed proposal description and reflects the parties’ intentions for six months. The proposal incorporates all design, construction, and operational requirements to provide a complete turn-key Build, Own, and Operate solution. The document is non-binding and adheres to customary terms for its nature.
Figure 1: Location of the Arrowsmith Project
About Arrowsmith North Silica Sand Project
VRX Silica regards the Arrowsmith North Silica Sand Project as its most advanced project. Production of the project is scheduled to begin in 2023. This project is about 270 km north of Perth in Western Australia, adjacent to the Brand Highway and the Geraldton-Eneabba railway. It has a total mineral resource of 771 million tonnes at 98.0% SiO2 and a total ore reserves of 223 million tonnes at 99.7% SiO2. VRX Silica Limited needs a modest capital expenditure (CapEx) of AUD 40 million to construct the 2 million tonnes per annum operation. The Company anticipates the project will generate AUD 2.7 billion in revenue during the initial 25-year mine life.
Figure 2: Arrowsmith North and Arrowsmith Central (exploration licences and mining areas)
VRX Silica Limited Managing Director Bruce Maluish
VRX Silica Limited’s Managing Director Mr Bruce Maluish has more than 35 years of experience in the mining industry. Expressing his view regarding the LOI, he said, “We have been considering how to best take advantage of the abundant gas supply from nearby gas fields to meet our power requirements at Arrowsmith North. Our desktop modelling indicates that a gas-driven powerhouse and transmission solution is cost-effective and will reduce our project footprint and expected greenhouse gas emissions.”
Figure 3: VRX Silica Limited Managing Director Bruce Maluish
Investors outlook
- The latest (March 7th 2023) VRX Silica share price is AUD 0.115 per share, and the stock volume (4-week average) is 197,540.
- The Company has already issued 108,434 shares during March 7th, 2023
- The Company’s market capitalisation is nearly AUD 64.5 million as of March 7th , 2023
- The Company expects significant revenue from the Arrowsmith North Silica Sand Project.
About the Company
VRX Silica Limited is a pure-play silica sand company based in Western Australia. The company works on several Silica Sand projects in locations such as Arrowsmith North, Arrowsmith Central, Muchea, and Boyatup.
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