VRX hole targets processing water for Arrowsmith North
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VRX has started drilling of a key water production bore that will provide water for the proposed silica sand processing plant at its Arrowsmith North project.
The water bore is expected to produce a total of 0.9 gigalitres of water, with the Western Australia Department of Water and Environment Regulation already accepting the company’s application for an allocation of that amount of water.
VRX Silica (ASX:VRX) will apply for a 5C licence to take water once the bore is constructed.
“The supply of good quality processing water is a critical step in the development of the Arrowsmith North silica sand project,” managing director Bruce Maluish said.
“Water is being sourced from the deep and plentiful Yarragadee North aquifer and doesn’t affect the local users of the shallower Eneabba basin surficial water supplies.”
Silica sand is one of the most mined commodities in the world thanks to its use in the construction industry, while higher purity sands are used in the foundry and glass industries.
The 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.
VRX is currently waiting on the Environmental Protection Authority to complete the assessment of its environmental approval application.
This is required before 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.
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.