Excitement builds as VRX Silica clears key heritage hurdle
VRX is another step closer towards developing its Arrowsmith North and Central silica sand projects after being given an early go-ahead by Aboriginal heritage surveys.
Importantly, preliminary advice received from the Yamatji Southern Regional Corporation (YSRC) has confirmed that stated works for the proposed long-term mining and associated infrastructure areas are clear to proceed.
VRX Silica (ASX:VRX) said these include the 360 hectare Arrowsmith North mine disturbance envelope, which allows for 30 years of mining, and 485 hectares of the Arrowsmith Central mine disturbance envelope that will allow for 20 years of mining.
“Finalising the Aboriginal heritage clearance for our proposed works on both Arrowsmith North and Arrowsmith Central is an important step forward in the development of our silica sand projects,” managing director Bruce Maluish said.
“It also continues our strong and supportive relationship and consultative approach with the local Yamatji Nation.
“We appreciate their efforts in progressing the conduct of the surveys and reports and look forward to continuing to work closely with them as we progress project development.”
In addition to the heritage surveys, which found no isolated artifacts nor any previously unrecorded suspected Aboriginal archaeological sites, the YSRC and SandS CRM consultants also helped the company in understanding the conservation of significant fauna identified by its consultants.
This work did not identify any priority fauna and will be included in its submissions for regulatory approvals.
Both Arrowsmith North and Arrowsmith Central are advanced silica sand projects with high grades suitable for applications that require high levels of purity.
Under a bankable feasibility study, Arrowsmith North is currently expected to produce 53Mt of silica sand over 25 years to generate total sales of nearly $2.7bn, generating net present value (NPV) and internal rate of return (IRR) of $243.3m and 77% respectively.
This is just the tip of the iceberg with the project hosting an ore reserve of 223Mt grading 99.7% silicon dioxide (SiO2).
Arrowsmith South has a current resource of about 76.5 million tonnes grading 96.8% SiO2 that includes an ore reserve of 18.9Mt at 99.6% SiO2.
Like its counterpart, the project is the subject of a BFS completed in September 2019 that estimates net present value and internal rate of return, both measures of a project’s anticipated profitability, of $147.6m and 60% respectively.
Capex is estimated at just $25.9m with payback of 2.8 years while sales are expected to be just under $2.2bn.
This article was developed in collaboration with VRX Silica, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.