VRX Silica Ltd (ASX:VRX) has fielded indicative interest from three different distributors to annually purchase 590,000 tonnes of silica sand from the company’s two Western Australian projects.
Three non-binding letters of intent (LOI) have been received for silica sand offtake from a diverse range of silica sand distributors in the Asia-Pacific region with requirements in three different industries.
All three have long-term associations with the silica sand supply sector in the region, which is VRX Silica’s primary target market.
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VRX Silica, formerly Ventnor Resources, is confident from exploration and test work that it can readily meet the specifications and tonnage sought under the LOIs from its Muchea and Arrowsmith projects.
VRX managing director Bruce Maluish said: “The receipt of these three LOIs supports the company’s research that there is significant demand for silica sand products of the type capable of production from the Arrowsmith and Muchea silica sand projects.
“This is a solid foundation for the company’s initial aim of establishing demand for more than 1 million tonnes per annum from each individual project area.”
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LOIs have been received from Si Resources Corporation (SRC) in the Philippines, Dong A Heung-Eop Mining Co Ltd (DAHEM) in South Korea and Shanghai GEEYEAH International Trading Co Ltd (SGI) in China.
Specifications met by Arrowsmith project
SRC is a wholly-owned subsidiary of Rock Energy International Corporation and during the last two decades it has been one of the leading distributors of imported silica sand within the Philippines.
It annually supplies the Philippine glass bottle manufacturing industry with 110,000 tonnes of silica sand as well as other industrial users of silica sand, creating total annual demand of 290,000 tonnes.
SRC’s LOI covers the supply of this tonnage annually from VRX with pricing dependent on final specification.
The specification sought by SRC can be met from the Arrowsmith project production.
DAHEM, of Busan, has been a leading supplier of casting sand to the Korean foundry industry for more than 50 years.
Its’ LOI covers the annual supply of 100,000 tonnes of high purity silica sand with pricing dependent on final specification.
The specification sought can also be met from Arrowsmith production.
Specification met by Muchea project
SGI is in Pudong New District of Shanghai and is a leading supplier of silica sand for more than 15 years to the fibreglass market and more recently to the solar panel cover glass market.
This LOI covers the annual supply of 200,000 tonnes, subject to final price and specification, for a period of five years and the specification sought can be met from Muchea production.
READ: Ventnor Resources reveals substantial maiden silica resource at Arrowsmith North
In early October, VRX announced a maiden inferred mineral resource at Arrowsmith of 193.6 million tonnes of silica sand at 98% SiO2.
Further test work demonstrated this can be upgraded using a simple process circuit to produce glass-grade silica sand.
READ: Ventnor Resources reveals maiden JORC resource for Muchea Silica Sands Project
In November, a maiden JORC-compliant inferred resource was announced at Muchea of 191 million tonnes of silica sand at 99.6% SiO2, including 19 million tonnes at 99.7% SiO2.
Test work had confirmed the potential for a very high-quality product of 99.9% SiO2 with less than 100ppm Fe2O3.