Perpetual Resources Ltd (ASX:PEC) will undertake a scoping study at its flagship Beharra Silica Sand Project in Western Australia to investigate the viability of white sand to be sold as direct shipping ore (DSO).
The study will be conducted in response to interest from an unnamed, previously announced offtake partner, which has been running impurity removal activities using further gravity and magnetic separation stages on Perpetual product samples.
This partner has reported a substantial further reduction in iron oxide, well beyond the 276 parts per million achieved by Perpetual in the Beharra pre-feasibility study, and now believes Perpetual’s white sand could be sold as direct shipping ore.
Setting Perpetual up for the future
Perpetual executive chairman Julian Babarczy said the ability to sell its silica sand products as DSO could set the company up for a long and sustainable future.
“It is very pleasing to have received such strong interest in Beharra silica sand products from our various offtake partners, with initial testing by all parties resulting in strong confirmation as to Beharra’s high quality,” he said.
“This DSO initiative is particularly exciting for Perpetual, as it holds potential to unlock a low capital production scenario that takes advantage of the strong market dynamics and demand for high-quality silica sand that currently exist in the market.
“We intend on working closely with this previously announced offtake partner to explore the optimal commercialisation arrangement for this business, which may involve a pricing mechanism for Perpetual to access the final end product market sales price.
“The outcome of the DSO Scoping Study analysis is complementary and can be run in parallel with our likely Beharra PFS Update strategy and may result in potential for concurrent DSO and processed sand exports to the high growth Asian region in future years.”
Sands better than first thought
The offtake partner has previously been sent and has conducted independent testing and further impurity removal on samples of processed high-grade silica sand from the Beharra PFS metallurgical program earlier in 2021; the starting point for initial testing was a product grading 99.6% iron oxide with 276ppm iron oxide.
This partner reported back to Perpetual the ability to achieve final product specification of even higher silica grades with materially lower iron oxide impurity levels.
These results have the potential to place Beharra end product squarely in the market for ultra-clear glass, including PV-solar cell glass coverings, which is experiencing rapid growth due to the global expansion of solar capacity.
The Beharra Project is 300 kilometres north of Perth and is 96 kilometres south of the port town of Geraldton in Western Australia covering an area of about 49 square kilometres.
The scoping study is expected to take up to 12 weeks and will form the basis of formal discussions with the offtake partner, which is currently undertaking its own study to identify the costs and investment required to receive and upgrade Beharra DSO white sand in its own country.
The scoping study will:
- Identify the DSO product or products that can be produced from Beharra white sand;
- Identify the process required to meet the required specification;
- Investigate and determine the costs of production on an FOB Geraldton basis;
- Develop a draft marketing/technical Material Safety Data Sheet (MSDS);
- Identify risks and opportunities associated with the DSO option;
- Assess fixed and working capital cost estimates to support production under a DSO scenario.
- Daniel Paproth