Slide 1: WA Silica Sand Project Developer
For personal use only WA Silica Sand Project Developer October 2019
Slide 2: Important Information: Disclaimer and Cautionary Statements
Important Information For personal use only Disclaimer and Cautionary Statements This document has been prepared by VRX Silica Limited (VRX). The information contained in this document is for information purposes only and has been prepared for use in conjunction with a verbal presentation and should
Slide 3: Important Information (cont.)
Important Information (cont.) For personal use only Disclaimer and Cautionary Statements (cont.) Full details of the bankable feasibility studies for the Arrowsmith North, Arrowsmith Central and Muchea projects, including material assumptions, are contained in VRX’s ASX announcements of 28 August 20
Slide 4: Investment Highlights
Investment Highlights For personal use only 1 EMERGING AUSTRALIAN STRATEGIC SILICA SAND PRODUCER 2 OUTSTANDING PROJECT ECONOMICS AND LOGISTICS Combined NPV10 of $727m 3 IDEALLY PLACED TO CAPITALISE ON ROBUST MARKET OUTLOOK AND DEMAND 4 RAPID PATHWAY TO FINANCING AND PRODUCTION 4
Slide 5: The world is facing a global sand crisis
The world is facing a global sand crisis For personal use only 5
Slide 6: Silica Sand Use
Silica Sand Use For personal use only Construction Sand Concrete Glassmaking Float, Containers, Architectural, Thin Film Metal Casting/Foundry Automobile parts Target Market Oil/Gas Well Stimulation Frac sand/proppant Metallurgical Ferrous and Non-ferrous Alloys Paint and Coatings Brightness and dur
Slide 7: Market Outlook
Market Outlook For personal use only Asian glass making production increasing 5-6% per year (~8 - 10Mtpa Growth) Glassmaking silica sand demand by region* Market in Growth in Use Spec Asia Asia 4% 5% Float (Plate) Glass 99.5% SiO2 60 - 65Mt 5% - 6% 8% Container Glass 99.5% SiO2 70 - 75Mt 5% - 6% 47%
Slide 8: VRX's Silica Sand Strategy
VRX’s Silica Sand Strategy For personal use only Identify and delineate large scale silica sand resources close to infrastructure Explore opportunities for further processing to value-add Develop plans for the mining and export of high quality silica sand 8
Slide 9: Three Advanced WA Silica Sand Projects
Three Advanced WA Silica Sand Projects For personal use only Muchea (100%) • Very high-grade product with outstanding financial metrics • Well located to key port and rail infrastructure • Specialist glass products • Potential +100 year mine life: - JORC Resource of 208Mt @ 99.6% SiO2 - Probable Ore
Slide 10: BFSs Demonstrate Exceptional Economics
BFSs Demonstrate Exceptional Economics* For personal use only Arrowsmith North Arrowsmith Central Muchea Total Post Tax, ungeared NPV10 $242.3m $147.6m $337.9m $727.8m Post Tax, ungeared IRR 79% 60% 96% 83% Payback period (yrs) (post tax) (ramp up rate) 2.4 2.8 2.3 2.4 Exchange Rate US$/A$ $0.70 Lif
Slide 11: Arrowsmith Projects
For personal use only Arrowsmith Projects 11
Slide 12: Proximity to Key Infrastructure
Proximity to Key Infrastructure For personal use only • Arrowsmith Projects located 100 km Geraldton Port south of Geraldton Port and 270km north of Perth • Rail connections to Geraldton Port Rail to Geraldton 12
Slide 13: Arrowsmith North Overview
Arrowsmith North Overview For personal use only • Very large-scale potential: ‒ Probable Ore Reserve of 223 Mt @ 99.7% SiO2 • Exceptional project economics • BFS completed Aug 2019: ‒ Post Tax, ungeared NPV10 – $242m ‒ Post Tax, ungeared IRR – 79% ‒ Capex (2mtpa) – $28.3m ‒ BFS LoM – 25 years • Subs
Slide 14: Arrowsmith North Upgrade
Arrowsmith North Upgrade For personal use only 0.212mm – 1.0mm Screen • Removes majority of impurities • Upgrades to +99.5% SiO2 product • Delivers spec suitable for float and container glass market 14
Slide 15: Processing
Processing For personal use only Established processing techniques - No chemicals & no dust 15
Slide 16: Processing Plant Design
Processing Plant Design For personal use only 16
Slide 17: Arrowsmith North
Arrowsmith North For personal use only Kwongan Low Heath 17
Slide 18: Muchea Project
For personal use only Muchea Project 18
Slide 19: Muchea – Strategic Location
Muchea – Strategic Location For personal use only • Located on UCL • 50 km north of Perth • 14 km north of Muchea • Transport logistics in place: Muchea • Adjacent to Brand Highway Silica Sand Project • Significant rail capacity - under-utilised with strong interest from operators • Export through K
Slide 20: Muchea - Overview
Muchea - Overview For personal use only • Muchea is potentially a world class high-grade silica sand deposit • Granted tenure 100% VRX • Potential 100 year mine life: • Probable Ore Reserves of 18.7Mt @ 99.9% SiO2 • JORC Resource of 208 Mt @ 99.6% SiO2 • BFS completed in Oct 2019 demonstrate excepti
Slide 21: Muchea – Product
Muchea – Product For personal use only Very high quality +99.9% SiO2 and <100ppm Fe2O3 Significant testwork indicates simple processing can upgrade sand to specialised glass quality 21
Slide 22: For personal use only
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Slide 23: Silica Sand Development Timeline
Silica Sand Development Timeline use only Approvals / Permitting Construction Production ARROWSMITH Arrowsmith Production BFS Commence Commences Construction personal Dec June Dec June Dec 2019 2020 2020 2021 2021 MUCHEA For BFS Commence Construction Muchea Production Commences Approvals / Permittin
Slide 24: Investment Highlights
Investment Highlights For personal use only IDEALLY PLACED EMERGING OUTSTANDING RAPID PATHWAY TO CAPITALISE AUSTRALIAN PROJECT TO FINANCING ON ROBUST STRATEGIC ECONOMICS AND MARKET SILICA SAND AND LOGISTICS PRODUCTION OUTLOOK AND PRODUCER DEMAND 24
Slide 25: Corporate & Capital Summary
Corporate & Capital Summary For personal use only Capital Structure Directors Shares On Issue (m) 409 Paul Boyatzis Non-Executive Chairman Options on Issue1 (m) 77 Bruce Maluish Managing Director Share Price cents 14.5 Peter Pawlowitsch Non-Executive Director Cash (30 June) A$m 1.5 Debt A$m Nil Mark
Slide 26: Appendices
For personal use only Appendices
Slide 27: Arrowsmith North Resource
Arrowsmith North Resource For personal use only Resource Million Classification Domain SiO2% Al2O3% Fe2O3% TiO2% LOI% Tonnes White Sand 313 98.7 0.54 0.15 0.18 0.24 Indicated + Inferred Yellow Sand 458 97.6 1.08 0.40 0.17 0.52 All Sand 771 98 0.86 0.3 0.17 0.41 Products Classification Product SiO2%
Slide 28: Arrowsmith Central Resource
Arrowsmith Central Resource For personal use only Resource Million Classification Domain SiO2% Al2O3% Fe2O3% TiO2% LOI% Tonnes Indicated + Inferred All sand 76.5 96.8 1.5 0.4 0.2 0.7 Products Classification Product SiO2% Al2O3% Fe2O3% TiO2% LOI% Arrowsmith-CF400 Probable Arrowsmith-C20 99.6 0.25 0.0
Slide 29: Muchea Resource
Muchea Resource For personal use only Resource Million Classification Domain SiO2% Al2O3% Fe2O3% TiO2% LOI% Tonnes Indicated + Inferred All sand 208 99.6 0.06 0.02 0.1 0.23 Products Classification Product SiO2% Al2O3% Fe2O3% TiO2% LOI% Muchea-F80 99.9 0.02 0.008 0.03 0.1 Probable Muchea-F80C 99.9 0.
Slide 30: Thank you
For personal use only Thank you Bruce Maluish Managing Director Level 1, 6 Thelma Street West Perth WA 6005 Phone: 08 9226 3780 Email: brucem@vrxsilica.com.au 30