VRX Silica Strikes South Korea Offtake Deal

THE BOURSE WHISPERER: VRX Silica (ASX: VRX) has struck an offtake term sheet for the supply of silica sand from the company’s Arrowsmith North silica sand project in Western Australia.

VRX Silica will supply silica sand into the foundry industry in the Republic of Korea (South Korea) to offtake partners, Dong A Heung Eop Mining Co., Ltd (Dong A) and DongNam Corporation (DongNam).

The companies 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 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.

“The term sheet is a major milestone in the journey to develop our high-quality WA silica sand projects,” VRX Silica managing director Bruce Maluish said in the company’s ASX announcement.

“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.

“We acknowledge that this process has taken much longer than expected and thank our shareholders for their support and patience.

“Our focus now is on converting the term sheet with Dong A and DongNam into a binding offtake agreement while progressing talks with other parties involved in the foundry sand and glass-making industries.”

 

 

TO READ THE FULL ANNOUNCEMENT: CLICK HERE

 

Email: info@vrxsilica.com.au

 

Web: www.vrxsilica.com.au