VRX Silica (ASX: VRX) has entered into a farm-in and joint venture agreement with Hydro X Gen (HXG) for the company’s granted Geothermal Exploration Permit (GEP) at Dandaragan, 145km north of Perth, Western Australia.
HXG is planning to conduct an initial public offering and list on the Australian Securities Exchange as Steam Resources Limited (www.steamresources.com.au) in 2024.
HIGHLIGHTS
- Attractive Farm-In and JV structure provides VRX with exposure to development of GEP 44
- Provides VRX with a potential alternative energy solution for its silica sand projects and downstream processing, including glass manufacturing
- Steam Resources has the requisite technical team and expertise to explore the potential of GEP 44 and develop the project
- VRX retains underlying mineral rights in the project area both in hard rock and brine solution
Geothermal technology has the potential to produce long term dispatchable renewable energy for the Mid-West region, including VRX’s Arrowsmith silica sand projects.
The grant of GEP 44 was announced to ASX on 28 July 2023. It consists of eight contiguous blocks and the area includes the Walyering gas field currently under development by EP447 Joint Venture between Strike Energy 55% and Talon Energy 45%. The project provides an opportunity to work with these gas companies and use extensive historical and current data to explore potential geothermal power options.
Under the terms of the Agreement, Steam can earn up to a 90% interest in GEP 44. Steam is required to complete an agreed exploration program and drilling campaign by 31 July 2026 to earn an initial 40% interest in the project and an additional 30% interest by completing a feasibility study assessing the economic viability of the production of energy from geothermal sources within the project area by that date.
Steam may earn an additional 20% interest upon the production of energy from geothermal sources within the project area by 31 July 2029. VRX is not required to contribute funding for development of the project.
Steam has the requisite experience and expertise to explore and develop the project.
Steam Resources Managing Director Josh Puckridge said:
“Permit 44 represents a unique development opportunity for geothermal energy production in Western Australia that complements our other project areas in the Northern Territoryand South Australia.
“Recent developments in supercritical CO2 geothermal plant design greatly increases the potential for significant baseline production of green geothermal energy in Western Australia.
“Leveraging Steam’s work in the geothermal industry with Permit 44 is of great value to our shareholders and the shareholders of VRX.”
VRX Managing Director Bruce Maluish said:
“This geothermal exploration initiative was undertaken by VRX Silica to support our silicasand projects and long-term ambitions for the production of glass in Western Australia.Geothermal energy is a reliable, long-term renewable energy source and we identified thisopportunity for a new renewable energy industry in the Mid West.
“We are impressed by the credentials of Steam’s management team and look forward to working with them to realise the full potential of the Dandaragan geothermal project.
“In the meantime, VRX Silica continues work on the development of our silica sand projects at Arrowsmith, Muchea and Boyatupas we strive to become a leading supplier globally of high-quality silica sand products.”