Could 2023 finally be the year for ASX sand stocks?
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Sand used for construction or other more specialised uses remains in short supply due to overexploitation and a lack of new supply coming on the market.
This is particularly true since the sand required for construction purposes requires an angular grain that is lacking in, say, desert sand – famously known for having smooth, rounded grains – while the glass, solar and electric vehicles sectors need high purity silica sand, which is a different (and just as supply constrained) beast entirely.
Glass requires silicon dioxide (silica) purities above 95% while the flat glass used in solar panels and smartphone screens call for purities of 99.9%.
High purity silica can also be converted into silicon, which is currently being investigated for its potential to be used to increase the energy capacity of lithium-ion batteries.
Needless to say, success in this endeavour will increase the demand for the top shelf material, which is also what is in short supply.
The importance of silica sand has been recognised by the Australian government, which featured silica sand amongst other materials in its Austrade Critical Minerals Prospectus 2022.
Given the ongoing supply weakness for silica, have there then been many developments in the silica sand sector in Australia since we last had a in depth look back in July 2021?
After all, there are companies which are closing in on approvals and all the remaining steps that would allow them to sign offtake contracts and start exports.
Yet, the answer is surprisingly not as much as you would think, despite the clear demand and substantial effort on their parts.
That said, there has been progress and this year might just be the one that sees some of our ASX-listed sand players start exporting their product.
So just what are the ASX companies in the silica sand (and construction sand) space doing to progress their respective projects?
Allup – the ASX’s most recent silica sands play – has been progressing exploration of its Sparkler C project in Western Australia’s South West region.
Hand auger drilling has returned assay results with an average raw materials surface grade of 98.8% SiO2 as well as high purity silica sand to depths of 2.4m with the potential for premium 99.5% SiO2 and sub-100 parts per million iron silica sands once processed.
This program has defined high purity target areas for a follow-up aircore drilling campaign, which the company intends to start in the current quarter.
Program of Works have also been approved for further exploration drilling on its other Sparkler holdings with an updated circuit design successfully producing a 99.8% purity product using material sourced from Sparkler A.
At the Pink Bark project, the company is waiting on reconnaissance and hand auger drilling results to define targets for a follow-up aircore drill program in the first half of 2023 subject to Heritage approvals.
Plans are also in place for aircore drilling at Dune Buggy during the second half of 2022 while permissions and permitting are underway to start exploration at the recently granted Rail Head project near Bunbury.
Australian Silica Quartz has continued technical and development studies for its projects in Western Australia and Queensland.
It is currently progressing a Scoping Study looking at the suitability of its Albany White Hill project for development into a 0.5Mtpa to 1Mtpa export operation.
Its preliminary assessment indicates that metallurgy and process plant design, environmental assessment, water supply, the sand market and port access are achievable within the expected economic and regulatory constraints.
The extremely high purity project has a current resource of 11.6Mt grading 99.9% SiO2 and less than 50ppm iron oxide.
Carbine has submitted the first mining licence application for its Muchea West silica sand located just 40km north-northeast of Perth, which has an Indicated resource of 40Mt at 99.73% SiO2 that is backed up by an Inferred resource of 53Mt at 99.71% SiO2.
It is also finalising the logistical options – including transport and export – for its Scoping Study, which envisions a 2Mtpa mining and beneficiation plant with a mine life of 20 years.
The conceptual mining model and costs estimates have already been completed by Orelogy Mine Consultation while the process design and cost estimates were undertaken by Como Engineers.
Environmental surveys have also been completed and the company is now moving to carry out additional drilling this quarter to further expand the resource, which will form the basis of the proposed Feasibility Study.
While Cauldron is focused on its Yanrey uranium project, it has a 100% ownership in four river sand licences and is in the process of acquiring another four licences, which together give it ‘first mover’ status at the mouths of the Fitzroy River at Derby, the Ashburton River at Onslow and the Gascoyne River at Carnarvon.
These rivers drain a huge area of granitic rocks commencing from its respective headwater all the way to the project area with flooding events in the catchment area serving to replenish the supply of sand.
Cauldron noted that while the tenements are at differing stages of readiness to supply sand, it does have a stockpile of already mined material capable of near-term supply and that it has received several expressions of interest for sand supply.
It has started an internal strategic review of the river sand project and is considering opportunities for participation in the bulk sand export market.
Diatreme recently received the first tranche investment of $11m from global material solutions company Sibelco under their Cape Silica joint venture which seeks to develop the Galalar Silica and Northern Silica projects.
It has also identified a revised export pathway for Galalar that has the potential to enchance permitting and approvals certainty while reducing marine impacts and transport costs.
During the current quarter, the company intends to complete further independent resource definition studies, planning for further bulk sampling, metallurgical testwork studies and commencement of relevant work programs as well as further engagement with regulatory agencies and offtake parties for its Northern Silica project.
At Galalar, it will carry out further engagement with Hopevale Congress, affected native title holders and relevant regulatory/government agencies to advance project approvals and preferred logistics solution.
Other work includes continuing detailed project costs analysis for use in relevant economic studies and engagement with offtake parties.
The recent receipt of key environmental approvals places Industrial Minerals just a hair’s breadth away from starting mining at its flagship Stockyard high purity silica sand project.
With the approval of the Mining Proposal, Mine Closure Plan and Clearing Permit by the Western Australia state government, the company is now looking to finalise and offtake contract or product sales agreement with potential partner Shandong Hongbote Solar Technology to proceed with a final investment decision.
It is currently awaiting the beneficiation results of a 20 tonne sample sent to Shandong which was delayed due to the Covid-19 outbreak in China and shutdowns caused by Chinese Lunar New Year celebrations.
Feasibility studies are also progressing well and the company is waiting on a draft response from the Department of Water and Environmental Regulation in relation to its works approval process.
Stockyard currently has a resource of 9.6Mt at 98.9 SiO2 though additional exploration targets, mineral resource extension and upgrade opportunities have already been identified.
Metallica Minerals continues to progress its Cape Flattery silica project in northern Queensland, whose development was deemed a Controlled Action by the Federal Department of Climate Change, Energy, the Environment and Water.
This means that the project requires assessment and approval under the Federal Environment Protection and Biodiversity Conservation Act 1999.
While the company was obviously hoping that this wouldn’t be the case, it has expressed confidence that its commitment to minimise and avoid environmental impacts where possible would be managed in accordance with federal and state approvals.
The company is currently advancing the Definitive Feasibility Study and various other offtake and financing discussions for development comprising sand extraction, processing, and transhipment.
A memorandum of understanding for the offtake of 1.35Mt of silica sand is already in place with Mitsui.
Cape Flattery has an Ore Reserve of 46Mt at 99.18% SiO2.
Late in December, Perpetual upgraded resources at its Beharra project in Western Australia to 137.8Mt at 98.6% SiO2.
Notably, 90% of this resource is comprised of high quality Upper and Lower White horizons which includes a Measured Resource of 41.7Mt at 98.7% SiO2 and an Indicated Resource of 84.4Mt at 98.6% SiO2.
The results validate Beharra as a long life and high-quality project especially given that the company had previously demonstrated the ability to upgrade the sand to a 99.5% purity.
Perpetual is currently waiting on the results of four trenches dug with the aim of long life and high-quality project.
Material samples have also been sent to interested offtakers with expectations of commercial discussions progressing once results are received.
The newest silica sand player covered here, Resolution Minerals only recently pegged the new George project in South Australia, which includes the Etadunna silica sands prospect.
Etadunna has been defined over 1km2 by historical drilling, which returned a top near-surface intersection of 34m grading 99.87% SiO2 that is open at depth.
There is also room for further growth as the prospect remains open in all directions.
Suvo is focused on its producing kaolin assets but recently completed the acquisition of the Muchea project in Western Australia that is highly prospective for high quality silica sand.
The 47km2 project is located about 50km north of Perth and shares its western boundary with VRX Silica’s Muchea project, which has an Ore Reserve of 18.7Mt at 99.9% SiO2 and a Resource of 208Mt at 99.6% SiO2.
It is next to the Brand Highway with existing rail cart logistics in place and direct access to the Kwinana bulk terminal.
VRX has four large scale silica sand projects in Western Australia with its Arrowsmith North project ranking amongst the most advanced silica sand project in Australia.
Arrowsmith North has a Proved and Probable Ore Reserve of 221Mt and has granted mining leases and development plans though a revised capital estimate for the 2Mtpa processing plant with a unique patented process circuit underway.
All the company is lacking in terms of approvals is the Environmental Review Document, which is a comprehensive summary of the project environmental setting, the physical elements of the mine and infrastructure, operational elements, the extent of effects on the environment and the proposed rehabilitation and closure plan.
This was first submitted in May 2022 with requests for additional information made in early June and mid-November that were answered in June and December respectively.
A further response and/or acceptance of the ERD is expected soon, which will then initiate the four-week Public Environmental Review.
VRX has already purchased some of the long-lead items for the sand processing plant and continues to engage with potential buyers.
At Stockhead we tell it like it is. While Resolution Minerals is a Stockhead advertiser, it did not sponsor this article.
Disclosure: The author held shares in VRX Silica (ASX:VRX) at the time of writing this article