VRX Silica (ASX: VRX) has secured additional binding offtake contracts for its Arrowsmith North Silica Sand Project (Arrowsmith North) and appointed an international bank to manage financing.
HIGHLIGHTS:
- Two additional binding offtake contracts signed
- Adds 550,000 tonnes of offtake commitments for Arrowsmith North silica sand for an aggregate of 960,000 tonnes per year
- Offtake customers are well-established, reputable and substantial suppliers into foundry and glassmaking industries in China
- Pareto Securities appointed to manage Arrowsmith North fixed income financing
Offtake
The two new offtake contracts are for the supply of an aggregate minimum of 550,000 tonnes per annum of high-quality silica sand products from Arrowsmith North to two well-established, reputable and substantial suppliers into the foundry and glassmaking industries in China.
These additional contracts follow VRX’s announcement to ASX in October1 of four binding contracts for the supply of a minimum of 410,000 tonnes of silica sand products from Arrowsmith North, equating to an aggregate 960,000 tonnes committed under contract.
It follows continued testing of samples of silica sand products from Arrowsmith North confirming that these would be sought after products. In particular, the key features for preferred foundry sand are particle size distribution, grain shape and size and thermal stability, which all are attributes of Arrowsmith North silica sand to demonstrate its superior quality and ability to meet the highest stringent specifications.
VRX Managing Director Bruce Maluish said:
“These additional binding offtake contracts further demonstrate substantial interest in VRX’s Arrowsmith North silica sand foundry and glassmaking products. These offtake partners are well established companies in their industry and we expect them to be long term buyers as we diversify our customer base.
“These contracts vindicate VRX’s strategy to ensure production of a unique Australian and highly sought-after product, and to secure the right customers for our silica sand products.
“They also provide confidence to VRX with regards to sales and revenue generation and form an important precondition for potential debt financiers.”
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.
