VRX Silica Limited (VRX or Company) has secured firm commitments from sophisticated and professional investors to raise $5 million (before costs) through a two-tranche placement of fully paid ordinary shares. The capital raising will support the development of its Arrowsmith North Silica Sand Project. The funding is aimed at finalising environmental approvals and advancing the project towards production in 2025.
Key Details of the Capital Raising
The capital raising will consist of two tranches:
- Tranche 1: Approximately 5 million new shares at $0.042 per share, totalling $4.85 million. This includes shares under the Company’s placement capacity.
- Tranche 2: Approximately 6 million new shares at $0.042 per share, totalling $0.15 million, conditional on shareholder approval at an upcoming Extraordinary General Meeting.
Major shareholder Sparta Invest AG has committed $2 million, underlining strong support for the capital raising.
Pricing and Timing
- The offer price is at a 3% discount to the last close of $0.057 per share on December 5, 2024.
- Tranche 1 shares will settle on December 16, 2024, and allotment is scheduled for December 17, 2024.
- A general meeting will be convened in early 2025 to seek shareholder approval for the Tranche 2 shares.
Market Context and Support
The placement attracted significant interest from both existing shareholders and new institutional investors, reflecting confidence in VRX Silica’s silica sand projects, particularly the leading Arrowsmith North Silica Sand Project.
From the Managing Director’s Desk
Mr. Bruce Maluish brings over 40 years of experience in the mining industry, having held various leadership positions such as Managing Director and General Manager at organisations including the Monarch Group of Companies, Matilda Minerals, Abelle, Hill 50, and Forsyth Mining. He has worked across multiple resource sectors, including gold, copper, nickel and mineral sands, in both open-pit and underground settings.
VRX Managing Director Bruce Maluish commented: This capital raising puts VRX in a strong position to finalise environmental and other approvals for the development of our lead silica sand project at Arrowsmith North.”
“We are grateful for the support of our existing shareholders and welcome new investors in this placement.”
Strategic Importance of Silica Sand
Silica sand is a critical resource, second only to water in global consumption. It is essential for glass manufacturing, concrete and is increasingly important in the production of solar panels and high-tech components for the renewables industry.
VRX Silica is well positioned to capitalise on the growing demand for high-quality silica sand, with projects strategically located in Western Australia. The Company’s portfolio includes the Arrowsmith North, Brand and Arrowsmith Central Silica Sand Projects, as well as the high grade Muchea Silica Sand Project near Perth and the Boyatup Silica Sand Project near Esperance.
The Arrowsmith North project, the most advanced, is on track to commence production in 2025/26, subject to final approvals.
Infrastructure and Logistics
The Arrowsmith North, Arrowsmith Central, and Muchea projects benefit from nearby rail lines and road access to ports at Geraldton and Kwinana. The Boyatup project is connected to the port at Esperance, facilitating efficient transport of silica sand for export.
VRX Silica’s bankable feasibility studies support a 25-year production life for these projects, with the potential for over 100 years of high-quality silica sand production.
Analyst Perspective
Unified Capital Partners Pty Ltd, acting as the sole lead manager and bookrunner for the Placement, noted strong market interest and investor confidence in VRX Silica’s growth strategy. They emphasised the importance of VRX Silica’s portfolio in meeting the increasing global demand for high-quality silica sand.
Conclusion
The $5 million capital raising positions VRX Silica to move forward with its strategic development plans for the Arrowsmith North Silica Sand Project. With strong support from existing shareholders and new institutional investors, VRX Silica is poised to capitalise on the growing demand for silica sand, a critical resource in modern industry and infrastructure development.
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