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VRX Silica advancing approvals process for West Australian silica sand projects

The company has released bankable feasibility studies for its Muchea, Arrowsmith North and Arrowsmith Central silica sand projects, demonstrating strong financial metrics.

VRX Silica Ltd - VRX Silica advances Native Title agreements for its West Australian Silica Sand Projects
Silica sand is the prime ingredient in all glass manufacturing, including photovoltaic cells, mobile phones and high-capacity li-ion rechargeable batteries

VRX Silica Ltd (ASX:VRX) is progressing with the approvals process for granting of a Mining Licence for Muchea Silica Sand Project north of Perth in Western Australia.

This includes making extensive progress with Native Title agreements during the March quarter.

The company is also proceeding with Native Title negotiations for the Arrowsmith silica sand projects.

VRX, through its wholly-owned subsidiary Wisecat Pty Ltd, entered into a Native Title Mining Project Agreement for the Muchea project in January 2020.

This agreement was made with the Whadjuk People, Native Title Claim Applicants under Application WAD242/2011 (as the authorised representatives of the Whadjuk People Native Title Claim Group) and the South West Aboriginal Land and Sea Council Aboriginal Corporation (SWALSC) in its capacity as agent for the Whadjuk People.

It represents a key milestone in the development of the Muchea project and was the result of negotiations conducted in good faith with the Whadjuk People and SWALSC.

Native title agreement terms

Under the terms of the agreement, the Whadjuk People give their consent to the grant of the mining lease and the miscellaneous licences for the Muchea project within the Native Title claim area and the conduct of silica sand mining operations at the project.

Key terms of the agreement include:

  • The preservation and management of Aboriginal heritage within the mining lease area wherever possible pursuant to an agreed heritage protocol;
  • The promotion of awareness of the Whadjuk People’s traditional laws and customs and facilitation of cross-cultural exchange between the members of the Whadjuk People and the tenement holder and its employees and contractors;
  • Ensuring the environmental impact of agreed mining operations is managed in accordance with relevant statutory obligations;
  • Maximising employment and contracting opportunities for Whadjuk People contractors in connection with agreed mining operations; and
  • The provision of agreed initial and ongoing compensation to the Whadjuk People for the effects on Native Title arising from the grant of the mining lease and miscellaneous licences within the Native Title claim area, the conduct of mining operations and the issue of agreed project approvals.

Muchea Project Location

Mining lease pending

Signing of this agreement has cleared the path for grant of the mining lease and the miscellaneous licences for the Muchea project.

The parties have started the formal process with the National Native Title Tribunal required under this agreement to obtain the approval of the Minister for Mines for the grant of the mining lease.

Despite delays caused by the COVID-19 crisis, the company expects consent orders to be issued by the tribunal and the mining lease to be granted later this quarter.

Arrowsmith projects

During the quarter, the company also progressed negotiations with the Southern Yamatji Native Title Claimants and their representative, the Yamatji Marlpa Aboriginal Corporation (YMAC), in respect of a proposed mining project agreement for the Arrowsmith projects and consent for the grant of the mining leases and miscellaneous licences for the projects.

Delays caused by the COVID-19 crisis, particularly regulations prohibiting movement in and out of Aboriginal communities and restrictions on public gatherings, has hampered progress.

However, the company continues to work constructively with YMAC and the Southern Yamatji working party to find a pathway forward to finalise and sign the formal agreement.

VRX expects this process to conclude in the current quarter, which will clear the path to grant the mining leases for the Arrowsmith projects, which include Arrowsmith North and Central.

Environmental work progresses

The company has completed all fieldwork required to support the environmental referrals for assessment by the Department of the Environment and Energy (DotEE) for the Arrowsmith projects.

VRX is confident that the assessment process with DotEE will not be materially affected by the COVID-19 crisis and expects that the procedure for Arrowsmith North will be complete soon, with referral to the State EPA to follow in the June quarter.

This will be followed by the formal referral for Arrowsmith Central.

Arrowsmith Projects Location

Offtake discussions

During the quarter, the company continued discussions with potential customers in Asia (Malaysia, Thailand, Taiwan and South Korea) for long-term contracts for offtake of products from its Arrowsmith and Muchea projects.

A planned February road trip through Asia for this purpose was postponed due to the outbreak of COVID-19, however, the company has progressed discussions via video conferencing and interest remains strong despite the current economic climate in those countries.

Corporate outlook

VRX held a general meeting of shareholders on January 29, 2020, seeking Listing Rule 7.4 ratification of the issue of the shares to a range of sophisticated and institutional investors pursuant to its November 2019 placement which raised $4 million.

The company also sought and received Listing Rule 7.1 approval for the issue of free attaching options under the placement and options to the lead manager for the placement.

All resolutions were passed, and the options were issued on January 31, 2020.

Quick facts: VRX Silica Ltd

Price: 0.091 AUD

ASX:VRX
Market: ASX
Market Cap: $40.5 m
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