Ventnor Resources Ltd’s (ASX:VRX) shares have surged almost 30% today to 18 cents, a new 12-month high.
The gain comes off the back of the company’s acquisition last week of the Muchea Silica Sand Project 50 kilometres north of Perth, which resulted in Australia Silica Pty Ltd acquiring a 17.83% interest in Ventnor.
The company has examined the potential of Asian silica sand markets – representing 47% of global demand – and is directing its activities into that sector as a looming shortage of product puts upwards pressure on prices.
Ventnor managing director Bruce Maluish said the company had identified an increasing global demand for high-quality silica sand during the year.
He said: “Management [recognised] this significant opportunity [and] took positive steps to apply for and acquire tenements highly-prospective for silica sand.
“An important criterion when consideration was given to suitability of tenements was their location on vacant Crown land and ready access to infrastructure such as railways and ports.
“Silica sand is a strong growth mineral due to the demand by the construction sector where it is used in the manufacture of flat glass for windows.”
READ: Ventnor Resources has new substantial shareholder in Australian Silica with 17.83%, shares surge
Sydney-based consultancy Stratum Resources, which specialises in mineral economics in Asia and Australasia, estimates that the market for silica sand in the Asia-Pacific is forecast to grow to 138 million tonnes a year by the end of 2018.
This represents an increase of around 6% on 2017 demand.
Demand is also growing for specialised plate glass required in double glazing, increasingly used in Asia to reduce energy demands.
New markets for “tech glass”, used in photo-voltaic panels and silicon-metal composite material for high-capacity lithium-ion batteries, are also emerging as potential opportunities for Ventnor.
READ: Ventnor Resources bulk sample testing confirms glass-making quality sand
Ventnor’s Muchea acquisition complements its existing Arrowsmith Silica Sand Project, where preliminary reconnaissance work has indicated the potential for sand resources suitable for both glass-making and construction, addressing the growing requirements of the Asia-Pacific region.
Bulk samples have been collected from Arrowsmith to determine the most suitable processing circuit.
It is anticipated the bulk sample product will be used for marketing purposes to secure offtake and pricing agreements.
READ: Ventnor Resources bulk sample testing confirms glass-making quality sand
Muchea is a potentially high-grade, high-tonnage silica sand project adjacent to the Brand Highway and a rail connection to Kwinana port for bulk handling.
Two separate conceptual exploration targets have been estimated for two areas within the Muchea project.
A 70-125 million tonne silica sand target grading 98% to 99.5% silica was estimated after 38 aircore holes were drilled.
Drilling of 40 auger holes and 10 aircore holes also produced a 100 to 150 million tonne silica sand target grading 98% to 99.5% silica in another area.
Ventnor has already received enquiries from potential Asian customers as it undertakes a comprehensive test work program to ascertain what product can be produced and marketed from the project.