VRX Silica Limited (ASX:VRX) is pleased to announce it has entered into an offtake term sheet for the supply of silica sand from its Arrowsmith North silica sand project, north of Perth.
The offtake partners, Dong A Heung Eop Mining Co., Ltd and DongNam Corporation, are leading suppliers of sand to the foundry industry in South Korea. Dong A is based in Busan and has been an established South Korean supplier of foundry and resin coated sand (RCS) to the foundry industry since 1965. DongNam, established in 1965, is a supplier of RCS and cast alloy products to Hyundai Motors. The non-binding term sheet sets out detailed terms and conditions for the supply of an aggregate 200,000 tonnes per annum of AFS55 certified foundry sand for a period of four years, with volume to be split between Dong A and DongNam.
VRX managing director Bruce Maluish said:
“The term sheet is a major milestone in the journey to develop our high-quality WA silica sand projects.
“We are delighted with the calibre of our first offtake partners Dong A and DongNam, given their significant industry experience and high standing in the foundry industry in South Korea. Both companies have shown confidence in the quality of our foundry sand product from Arrowsmith North and are very keen to convert this term sheet into a secure, long-term supply agreement.
“The South Korean foundry industry is an extensive support service for the automobile and marine industries. VRX’s engagement with Dong A and DongNam will expand awareness of the quality of our product in this large and important Asian market and likely lead to further inquiries from parties keen to secure supplies of Arrowsmith North silica sand.
“Importantly, this maiden term sheet vindicates VRX’s strategy to take our time to ensure production of a highly sought-after product and to secure the right customers for our silica sand. Market demand for the high-quality foundry sand we can produce remains very strong and, having signed up two reputable partners, will only further strengthen our credibility and position in the marketplace.”
