VRX Silica (ASX:VRX) is another step closer towards securing environmental approval for its advanced Arrowsmith North silica sand project.

The company noted that Western Australia’s Environmental Protection Authority is now assessing its environmental approval application at the Public Environmental Review (PER) level for a four-week period.

As part of this assessment, VRX will prepare an Environmental Scoping Document (ESD) that details the environmental studies required to inform the assessment of the project.

These studies may include the cultural and heritage assessment, greenhouse gas estimate, and high level air quality assessment. The company has already commenced these studies and will finalise them before the end of the PER period.

Preparation of the ESD is a fundamental step in the EPA administration procedures to inform the Environmental Impact Assessment of Arrowsmith North.

The EPA process has to be completed before any other government agencies can award any further approvals and will also allow the Commonwealth Department of Agriculture, Water and Environment to set their level of assessment at PER to align with the EPA decision.

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 per cent respectively.

Both NPV and IRR are measures of a project’s anticipated profitability.

Other activity

VRX added that results from the 130-hole grade control program totalling 1,459m that was carried out in March, were in line with expectations and will allow it to update the project’s resource estimate in the area covered by the drilling.

Once the resource is updated, the company will then conduct a detailed review of the outlined production for the next six years with a comprehensive mining and processing schedule.

Experienced sand processing engineers ProjX Engineering have also been commissioned to carry out a detailed engineering design for the Arrowsmith North processing plant.

This design is based on the recent test work results and the proposed process circuit.

It will allow for the preparation of a detailed cost estimate and schedule for the construction of the proposed plant at the project, incorporating all necessary operational equipment, materials handling equipment and piping and instrumentation systems.

Additionally, VRX is in discussions with a number of potential power providers to supply the power requirements and with Mid West Ports Authority around logistics and access to port facilities at Geraldton for export.

All power providers have indicated that a renewable energy solution to be ultimately driven by solar and wind options supported by gas is both viable and cost effective while the discussions with MWPA have been positive.

VRX adds that interest from potential offtake partners and financiers remains strong.

 

 

 

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.

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