VRX Signs 440,000 Tonne Offtake Amid EPA Approval Recommendation for Arrowsmith

EPA Assessment and Regulatory Progress

VRX Limited (ASX: VRX) has marked significant progress in its silica sand development projects during the March 2025 quarter. The Environmental Protection Authority (EPA) has completed its assessment of the Arrowsmith and North Silica Sand Projects, recommending approval to the Western Australian Minister for Environment. This recommendation comes despite an appeal lodged by the Conservation Council of Western Australia, which is currently under review by the Office of the Appeals Convenor (OAC). VRX expects the ministerial decision on the appeal by early May 2025, a critical milestone for advancing the projects.

The company has been actively engaging with regulatory bodies, including the Department of Climate Change, Energy, Environment and Water, and the Department of Mines, Industry Regulation and Safety, to secure the necessary environmental and mining approvals. VRX is managing parallel state and federal approval processes to expedite the permitting phase, aiming for completion in the second quarter of 2025.

Offtake Agreements Signal Market Confidence

In a strategic commercial development, VRX has signed non-binding offtake agreements for 440,000 tonnes per annum of silica sand with prominent importers in South Korea, Japan, and Taiwan. These agreements involve leading foundry sand and glassmaking suppliers such as Casting Materials Co., Woori Ind Ltd, Namgwang Enterprise Co. Ltd, and Yamakawa Sangyo Co. Ltd. The contracts span four years with indicative pricing aligned with the company's financial models, underpinning the economic viability of the Arrowsmith project.

The offtake agreements reflect strong demand from Asia-Pacific markets, where silica sand is a critical input for foundry casting, flat glass, container glass, and high-tech solar panel manufacturing. VRX’s product quality, boasting high silica purity levels (up to 99.9% SiO2), positions it well to capture growing market share amid regional supply shortages and rising prices.

Project Financing and Technical Review

With environmental approvals advancing, VRX is intensifying efforts to secure project financing for Arrowsmith North. Interest from potential financiers has increased markedly, reflecting confidence in the project's fundamentals and regulatory progress. The company has commissioned an independent technical review of the project, expected to be finalized in Q2 2025, which will inform financing discussions and support the bankable feasibility study assumptions.

VRX continues to explore a mix of debt and equity financing options to underpin the development phase. The company’s strong mineral resource base, totaling approximately 1.4 billion tonnes across its projects, provides a solid foundation for long-term production, with reserves supporting a ramp-up to over 2 million tonnes per annum of high-grade silica sand.

Broader Strategic Outlook

Beyond Arrowsmith and North, VRX is assessing additional silica sand and downstream processing projects within Australia, aiming to expand its footprint in the industrial minerals sector. The company’s portfolio includes the Muchea and Boyatup projects, each targeting different market segments such as ultra-clear glass and specialty applications.

VRX’s engagement with local stakeholders, including indigenous groups, regional shires, and industry bodies, underscores its commitment to sustainable development and regional economic benefits. The projects promise substantial employment opportunities and royalties, contributing to Western Australia’s mid-west economic growth.