VRX Silica (ASX: VRX) has secured four binding offtake contracts for the supply of silica sand from its Arrowsmith North silica sand project, in Western Australia.
The offtake contracts are for the supply of an aggregate minimum of 410,000 tonnes per annum of high-quality silica sand products to two well-established, reputable and substantial suppliers into the foundry industries in South Korea, a leading supplier of foundry, glassmaking, water filter media and sized dry sand in Taiwan, and a glass manufacturer supplier in the Philippines.
This follows announcements in August and September that the company has received environmental, works and mining proposal approvals for Arrowsmith North, allowing for the commencement of construction and operation of the processing plant and associated infrastructure as well as mining activity.
Arrowsmith North, 270km north of Perth, contains a globally significant deposit of high-quality silica sand underpinning a mining project that will enable long-term production for the foundry, container glass and flat-glass markets in Asia. As detailed in the updated bankable feasibility study announced in March 2024, Arrowsmith North has a JORC-compliant Proved and Probable Ore Reserve of 221Mt @ 99.5% SiO2.
VRX proposes to gradually ramp up production at Arrowsmith North from a starting level of about 1Mtpa to more than 2Mtpa of silica sand, with an operating life of several decades. These binding offtake deals in aggregate account for close to half of Arrowsmith North’s proposed commencement capacity.
VRX’s strategic significance is its position as a near-term, long-life and stable supplier of high-quality silica sand products from a Tier 1 jurisdiction. The company’s marketing strategy is to secure a portfolio of long-term offtake contracts with reputable partners to underpin a steady ramp-up of production while balancing price exposure and revenue stability amid the continuing strong inbound interest from a number of market participants across the Asia-Pacific region.
Commenting on the binding offtake contracts, VRX managing director Bruce Maluish said:
“We are delighted with the support from our offtake partners as we secure initial binding offtakes for Arrowsmith North. VRX is seen as a reliable supplier of high-grade silica sand products and Australia as a dependable jurisdiction.
“These contracts further vindicate VRX’s strategy to ensure production of a unique Australian highly sought-after product and secure the right customers for our silica sand products for what we expect to be long-term relationships.
“We remain focused on converting the remaining offtake term sheets and new interest into binding offtake agreements. With key project approvals in place, our marketing team is actively engaging with interested parties involved in the foundry sand and glass-making industries and responding to a number of new enquiries as our high-quality silica sand products and surety of supply become recognised in the marketplace.”
VRX is targeting first production in late 2026 following a final investment decision and commencement of construction of the processing plant and associated infrastructure expected in the first half of 2026.
