VRX Silica Ltd (ASX:VRX) is trading higher on continuing strong interest from potential customers for high-quality silica sand products from development-ready projects north of Perth in Western Australia.
Indicative of the strong interest is the shipping of additional silica sand samples earlier this month to eight new potential customers.
The Arrowsmith North Project, 270 kilometres north of Perth, is the most advanced with the company progressing offtake and financing arrangements while the Muchea Project, 50 kilometres from Perth, is also development ready.
“Demand is growing”
VRX’s managing director Bruce Maluish said: “VRX is in an enviable position as we continue to engage with potential customers in South Korea, Japan, Philippines, Malaysia and Thailand.
"Demand is growing for high-quality silica sand products across South East Asia whilst the supply-side continues to be squeezed.”
VRX shares have been as much as 18.4% higher to 39 cents, a new 8-year high, while the company's market cap sits at approximately $150.6 million.
This year shares have traded in the range of 4.5 cents to 39 cents and have climbed steadily from 11.5 cents on October 16.
Maluish said: “Despite the inevitable slowdown earlier this year due to COVID-19, most organisations in South East Asia we are engaging with have expressed positive sentiment towards stimulus spending and growth in construction in general across the region and are gearing up their operations for 2021 and beyond.
“VRX has received a tremendous level of interest for offtake from both our Arrowsmith North and Muchea projects, and we are much closer to selecting our first offtake partner to underpin development. We expect to agree terms in early 2021.”
The company has also continued positive engagement with potential debt financiers for the projects, with interest received from groups based in Australia and overseas.
Another earlier-stage project that the company aims to progress in 2021 is Botayup, which is 100 kilometres east of Esperance on WA’s southern coast, while it is also actively assessing other silica sand projects in Australia.
Biranup sale extension
VRX has agreed to extend the completion sunset date for the sale of its Biranup Project by six months to June 30, 2021.
On July 1, 2020, the company entered into an agreement with New Energy Metals Limited, to be renamed NickelX Limited, for the sale of the project and listing of that company on ASX.
Originally expected to complete by the end of 2020, increasing activity for new ASX listings generally has delayed progress on the IPO.
The new completion sunset date is subject to minimum exploration expenditure obligations being satisfied by the purchaser in the first quarter of 2021 with the IPO scheduled for completion early in the new year.