In October 2017, VRX Silica announced the acquisition of the Arrowsmith Silica Sand Project, located 270 kilometres north of Perth in WA. The project sits across five exploration licences, two mining leases and five miscellaneous leases totalling approximately 377 km2 adjacent to the Brand Highway and the rail connection to Geraldton Port, which is suitable for bulk shipping.
Silica sand is the primary component of all types of standard and specialty glass and is also used for metal casting (foundries), metal production, chemical production, paint and coatings, ceramics, filtration and water production, and oil and gas recovery.
Work to date at the Arrowsmith Project has identified a Mineral Resource in excess of 847mt and Ore Reserves of 241.9mt of silica sand suitable for use in both glassmaking and foundry work, supplies of which are in increasing demand as a result of booming technology and construction sectors in the Asia-Pacific region.
Two areas within the Arrowsmith Project have had preliminary investigations:
- Arrowsmith North for silica sand suitable for flat glass, container glass and foundry sand;
- Arrowsmith Central, which is also prospective for silica sand suitable for flat glass and container glass.
The location is traversed by the Eneabba-Geraldton rail line, which provides direct access to the ship-loading facilities at the Geraldton Port and offers a unique logistics solution.
Image 1: Exploration licences and mining areas at Arrowsmith North and Arrowsmith Central.
During March 2019 VRX Silica completed an aircore drill program at the Arrowsmith North Silica Sand Project over the area previously tested only by shallow hand auger drilling. The analytical results were used to update the Mineral Resource Estimate for the Arrowsmith North Project.
As announced on 9 July 2019, the MRE for the Arrowsmith North Silica Sand Project was upgraded to 771 Mt @ 98.0% SiO2 including an Indicated Resource estimate of 248Mt @ 97.7% SiO2 and an Inferred Resource estimate of 523Mt @ 98.2% SiO2, an overall increase of 398% on the maiden estimate.
As announced on 28 August 2019, a Maiden Probable Ore Reserve was declared for the Arrowsmith North Silica Sand Project of 223Mt, confirming the Arrowsmith North Silica Sand Project is a world class deposit.
Mineral Resources and Ore Reserves
Comparison to Previous Year
The Arrowsmith North Resource Area focuses on a prominent broad dune structure and avoids existing infrastructure and potential conservation areas. The potential volume is estimated from the base of drilling to the top of the dune and assumes that between 70% and 100% of the dune is silica sand. The estimate uses an in-situ bulk density of 1.6t/m3 to calculate the tonnage. The initial target grade of +95% SiO2 was considered conservative as all samples, except two, taken from the area exceeded this value and processing demonstrated the in situ sand can be beneficiated to a saleable product.
All Mineral Resources are reported in accordance with the JORC Code 2012.
Significantly the Mineral Resource includes an unpredicted 313 million tonnes of white sand at 98.7% silica. A high-grade final product can be produced from the higher-grade feed stock which is in demand for the glassmaking, foundry and ceramics industries.
This Mineral Resource estimation allowed the Company to finalise estimates of Ore Reserves to support the Company’s BFS.
The Indicated Mineral Resource is predominately within the Mining Lease application area and the majority is anticipated to convert to Probable Reserves and hence an extremely long-life mining project.
During the March quarter 2021 the Company completed a grade control drilling program of 1,459 metres at Arrowsmith North on the site where mining will commence.
Image 2: Critical infrastructure and mining areas surveyed at Arrowsmith North and Arrowsmith Central.
The Arrowsmith Project area has a mining depth limitation to be above the water table, which is 10 metres below the drilling. The MRE has been estimated to a nominal depth well above the water table and the top half metre of topsoil has been discounted in the MRE as it will be used for rehabilitation.
Process circuit design and engineering has been completed, allowing for processing plant capital cost to be estimated at $18m per plant and total capex (including plant feeder and water supply per plant) estimated at $25m per plant.
From the start of the Arrowsmith Silica Sand Project VRX has proactively consulted with the Southern Yamatji Working Group and YMAC and built a strong and supportive relationship. Together the parties have conducted a number of comprehensive archaeological and ethnographic Heritage Surveys in the project areas during which no isolated artifacts were found and no onerous recommendations made.
Heritage cleared areas include the Arrowsmith North Access Road, Services Corridor and Production Area which have been cleared for the stated works to proceed for 10 years of production and to establish and execute a native title project agreement. The Arrowsmith Central Production Area and Infrastructure Areas have been cleared for 5 years production.
Recently the West Australian Government settled a number of native title claims over land in the Mid West, including the Southern Yamatji People claim covering the Company’s Arrowsmith Silica Sand Projects.
Settlement included the conclusive registration of the Yamatji Nation Indigenous Land Use Agreement (ILUA). This means that VRX’s Mining Lease and Miscellaneous Licence applications for its Arrowsmith Projects will now be dealt with under the terms of the ILUA. The ILUA now supersedes the negotiations that were underway between VRX, YMAC and the Southern Yamatji Working Group over the terms of a native title project agreement at the Arrowsmith Projects.
The Mineral Resource announcement for Arrowsmith North, including JORC Table 1 information, can be found here.
During March 2019 VRX Silica completed an aircore drill program at the Arrowsmith Central Silica Sand Project over the area previously tested only by shallow hand auger drilling. The analytical results were used to update the Mineral Resource Estimate for the Arrowsmith Central Project.
As announced on 15 August 2019, the MRE for the Arrowsmith Central Silica Sand Project was upgraded to 76.5 Mt @ 96.8% SiO2 including an Indicated Resource estimate of 28.2 Mt @ 96.6% SiO2 and an Inferred Resource estimate of 48.3 Mt @ 96.9% SiO2. This was an overall increase of 273% on the maiden estimate.
As announced on 17 September 2019, a Maiden Probable Ore Reserve was declared for the Arrowsmith Central Silica Sand Project of 18.9Mt.
Mineral Resources and Ore Reserves
The Mineral Resource announcement for Arrowsmith Central, including JORC Table 1 information, can be found here.
Comparison to Previous Year
Arrowsmith South Exploration Target – 40 million to 80 million tonnes @ +95% SiO2.
The Arrowsmith South Exploration Target focuses on the southern end of a topographical high that is noted as containing an intercalation of limestone and dune sands and avoids existing infrastructure and potential conservation areas. The potential volume is estimated from the 45mRL to the top of the dune and assumes that between 50% and 100% of the dune is silica sand. The estimate uses an in-situ bulk density of 1.5t/m3 to calculate the tonnage. The target grade of +95% SiO2 is considered conservative as assays from all samples taken from the area exceed this value and processing is expected to increase this grade.
The potential quality and grade of the Exploration Target is conceptual in nature and there has been insufficient exploration to estimate a Mineral Resource and that it is uncertain if further exploration will result in the estimation of a Mineral Resource.
At Arrowsmith North and Arrowsmith Central the identified resources have been Aboriginal Heritage cleared with no impediments to mining and the plant location site. The Company has also obtained the last clearance required for a water bore to establish a permanent water source.
VRX Silica has lodged the EPA Environmental Review document and work is ongoing on the Mining Proposal and other DMIRS Approvals. The Company continues to fine tune the process for improving the quality of both the Arrowsmith North and the Arrowsmith Central sand, with success in improving the quality of the final products.
Discussions with numerous offtake parties continue on a regular basis as are discussions with plant finance and construction parties.