Suvo Strategic Minerals Ltd (ASX:SUV) has moved to grow its already massive silica sand assets with the proposed acquisition of the high-grade White Hill Silica Sand Project, constituting some 4,700 hectares in the Muchea region of Western Australia.
Located just 50 kilometres north of Perth, White Hill will provide Suvo with the potential to explore for high-quality silica sand, targeting different end-user markets to the company’s existing portfolio of assets.
Labelled licence application E70/4981, White Hill shares a western boundary with VRX Silica’s Muchea silica sand project.
Potential lithium-ion product stream
Suvo Strategic Minerals executive chair Robert Martin said: “To secure such a large tenement of land that is prospective for high-quality silica sand for such a minimal upfront outlay is a significant outcome for our shareholders and strengthens our already impressive silica sand assets.
“Our neighbours to the east have reported significant high-quality grades over large volumes and we believe that the dune system that is producing this continues through this tenement.
“We are excited to progress this project and to test its potential to provide material suitable to meet the stringent requirements for high-end materials including inputs for specialty glass for solar panels and mobile phone, as well as high-capacity lithium-ion (Li-ion or LIB) rechargeable batteries.”
White Hill is strategically located next to the Brand Highway, with existing rail cart logistics already in place and direct access to the Kwinana bulk terminal.
Silica sands market
Silica sands are primarily used for the manufacture of glass, foundry material, solar panels, ceramics, chemicals, paint and coatings.
These industries in the Asia Pacific area are growing at a rapid rate, especially in developing economies with emphasis on infrastructure development.
The Asia Pacific Silica Sand Market was valued at US$5.3 billion in 2019 and is projected to reach US$8.3 billion by 2027. Demand for silica sand is growing rapidly in accordance with the growth of the glass materials industry.
Key terms of acquisition
In consideration for the tenement application, subject to the satisfaction of the conditions precedent, Suvo intends to issue or grant (as the case may be) the following consideration to the vendor:
a) Completion consideration: 333,334 Unquoted Options to acquire one fully paid share ordinary share in the capital of SUV at the exercise price of $0.15 per share on or before three years from the date of issue;
b) Royalty: 4% of the proceeds of gross sales from product derived from the Tenement Application;
c) Deferred Consideration Shares: Subject to shareholder approval and the following development milestones having first been satisfied, issue to the vendor up to $1,550,000 in shares (Deferred Consideration Shares), in the following tranches:
i. Grant of Mining Licence: Upon the grant of a mining licence over any area the subject of the Exploration Licence. The number of shares calculated by dividing $1,150,000 by the greater of the 5 Day VWAP; and $0.15.
ii. Grant of Mining Permit: Upon the grant of all necessary mining permits over any area the subject of the Tenement Application required to commence production on a tenement (including environmental permits, water licences, project management plans and mine closure plans), the number of shares calculated by dividing $400,000 by the greater of the 5 Day VWAP; and - $0.15.
The Deferred Consideration Shares must be issued within five years of the date of the relevant shareholder approval (if any), or the rights to the Deferred Consideration Shares will lapse.
About Suvo Strategic Minerals
Suvo Strategic Minerals is a dual commodity Australian mining company focused on the development of its 100%-owned White Knight Kaolin Project in the Yilgarn Craton in the central wheat belt and its 100%-owned Nova Silica Project in the Gin Gin Scarp near the township of Eneabba, all within Western Australia.
Suvo catapulted into producer status when it acquired the Pittong Kaolin operations in Victoria from an Imerys subsidiary, becoming the only hydrous kaolin producer in the country.