VRX SILICA LIMITED
ABN 59 142 014 873
ANNUAL REPORT
30 JUNE 2024
CORPORATE DIRECTORY
VRX Silica Limited
1
DIRECTORS
Paul Boyatzis (Non-executive Chairman)
Bruce Maluish (Managing Director)
Peter Pawlowitsch (Non-executive Director)
David Welch (Non-executive Director)
SECRETARY
Ian Hobson
REGISTERED AND PRINCIPAL OFFICE
Ground Floor, 52 Kings Park Road
West Perth WA 6005
Telephone: (08) 9226 3780
Website: www.vrxsilica.com.au
SHARE REGISTRY
Computershare Investor Services Pty Ltd
Level 17, 221 St George's Terrace
Perth WA 6000
Telephone: (08) 9323 2000
Facsimile: (08) 9323 2033
AUDITORS
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade
Perth WA 6000
AUSTRALIAN SECURITIES EXCHANGE
VRX Silica Limited shares (VRX) are listed on the Australian Securities Exchange.
LETTER FROM THE BOARD OF DIRECTORS TO SHAREHOLDERS
VRX Silica Limited
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Dear Shareholders
VRX Silica Limited, your company, has continued to make solid progress in the advancement of its silica
sand projects in Western Australia.
VRX holds the most advanced silica sand projects of any ASX-listed company. The total Mineral Resource
within the company’s silica sand projects was re-estimated in 2023 to 1,381 million tonnes, underpinning a
long-term opportunity for silica sand export and downstream value-adding (including glass manufacturing)
in Western Australia.
Arrowsmith North is on track to become VRX’s first silica sand mine in production despite frustratingly slow
progress in the environmental approvals process.
Significantly during the year, several important technical stages were completed in that process. The
Environmental Protection Authority of Western Australia approved the publication and release of the
Arrowsmith North Environmental Review Document for a Public Environmental Review. The ERD is a
comprehensive summary of the project environmental setting, the physical elements of the mine and
infrastructure, operational elements, the extent of effects on the environment and the proposed
rehabilitation and closure plan.
The PER process commenced on 19 June 2023 for a four-week period. Comments from the public and
other State and Federal Government Departments, in the form of submissions on the proposal, were
compiled by the EPA and provided to the Company in early September 2023 for review and response. The
company prepared this response to submissions, which was lodged with the EPA in late September 2023.
The EPA provided formal comments to the RtS in April 2024 and an updated RtS in response to those
comments was lodged in May 2024.
VRX management has been in regular consultation with the EPA to a finalise the RtS, which includes a
comprehensive Rehabilitation Management Plan outlining the company’s commitments to mitigating the
project’s environmental impact. This document was peer reviewed before re-lodging with the EPA in late
September 2024.
At the Muchea silica sand project, the company has undertaken further metallurgical test-work and process
circuit design to identify downstream manufacturing opportunities for silica sand products that may be
produced from these sites. This initiative was underpinned by a grant from the WA State Government
Investment Attraction Fund for $2 million in matched funding to produce high purity quartz (or HPQ) flour.
The primary market for this product is the burgeoning LCD production market which requires high quality
and specific size dependent silica flour. Samples sent to potential buyers have confirmed that the project
can meet the specification and size requirements with high interest in long-term supply].
VRX continues to investigate alternative markets that have potential because of the high grade raw sand
that has been identified at the Muchea silica sand project.
Demand for silica sand from VRX’s projects, and Muchea in particular, is significant as global supply side
constraints continue to deepen. Both the Arrowsmith North and Muchea silica sand projects were again
included in Austrade’s 2024 Australian Critical Minerals Prospectus, demonstrating the Australian
Government’s recognition of silicon and silica sand as critical minerals.
On behalf of the Board, I would like to thank all personnel and contractors for their valuable contribution
during the year, and shareholders for their continued support and patience as we navigate project approvals
in what is a challenging and protracted process.
Paul Boyatzis
Chairman
For and on behalf of the Board
The most advanced, pure-play
silica sand company on ASX
Five high-value, long-life, high-grade Western Australian silica sand projects
•
Five multi-decade-scale contiguous sand deposits – Arrowsmith (North, Brand and
Central), Muchea and Boyatup
•
A combined 1.38-billion-tonnes of mineral resources of 99.6% to 99.9% SiO2 grade silica sand
on granted mining leases over four projects, all with secure tenure
•
Arrowsmith North high-purity product of 99.7% SiO2 with <500ppm Fe2O3 and on track to
become VRX’s first silica sand mine in production
•
Muchea boasts ultra-high- purity product of 99.9% SiO2 with <100ppm Fe2O3 after
processing, with likely higher quality after further, targeted processing
Made-for-purpose, low capex processing plant capable of independent operation
•
Largely identical 2mtpa processing plants on all projects utilising a unique flotation process, rather
than spirals and screening
•
Flotation will reduce capex and operating costs, and produce a more consistent, high-grade
and marketable product
•
Process circuit detailed engineering complete, plant operating parameters determined and
optimal products defined
•
Flotation reagents are organic and rapidly oxidise once used, presenting no environmental issues
Extensive environmental studies and approvals at an advanced stage
•
Extensive environmental studies conducted over a number of seasons
•
Environmental Review Document for Arrowsmith North provides a comprehensive summary of
the environmental setting, physical and operational elements of the mine and infrastructure,
environmental impact and mitigation and proposed rehabilitation and closure plan
•
Arrowsmith North in last stages of environmental and mining approvals process
•
Muchea Project to follow and largely mirror Arrowsmith North approvals process
Rehabilitation at the heart of mining – Vegetation Direct Transfer
•
VDT provides rapid and comprehensive regeneration of mined areas based on
continuous rehabilitation as mining progresses
•
VDT removes a 3m x 3m, 400mm deep sod, preserving topsoil and containing the vast
majority of native flora and invertebrate fauna
Substantial offtake interest
•
Bulk pilot plant scale testing programs test the process circuit and supply large samples to an
extensive list of potential buyers
•
Offtake term sheets agreed for supply of Arrowsmith North foundry sand products to prominent
South Korean foundry sand suppliers and a Taiwanese glass manufacturer, with indicative pricing
•
Poised to be an Australian first, and only, supplier of foundry sand to South Korea
•
Substantial interest from significant manufacturers across the Asia Pacific for silica sand products
from all projects
COMPANY REVIEW
VRX Silica Limited
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Review of Operations
The following is a summary of the activities conducted by VRX Silica Limited (VRX or Company) during the
year ended 30 June 2024 at its world-class silica sand projects at Arrowsmith North, Arrowsmith Brand and
Arrowsmith Central (located 270 km north of Perth), Muchea (located 50 km north of Perth) and Boyatup
(located 100 km east of Esperance), all situated in Western Australia.
VRX Silica Sand Projects
VRX is a Western Australian based pure-play silica sand exploration and development company with five
world-class high-value, advanced, very long-term silica sand projects in Western Australia, a Tier 1 mining
region.
The Company has multi-decade scale contiguous sand deposits on granted Mining Leases with secure
tenure and a combined 1.4Bn tonne Mineral Resource of 95.9% to 99.6% SiO2 high grade silica sand.
The Company and its management team is WA based as are its five silica sand projects. Each project can
be run independently and will supply variable grade silica sand to the glassmaking and foundry industries.
Figure 1: Project Locations
COMPANY REVIEW
VRX Silica Limited
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Applications of Silica Sand
Silica sand is the most-used commodity on the planet after air and water. It is the main ingredient in all types
of glassmaking, including specialty solar panel, high-tech and architectural glass. The glass manufacturing
industry demand is increasing at a rate of 5-6% per year, or about 8-10 million tonnes pa. Around 47% of the
world’s flat and container glass is manufactured in Asia.
Silica sand is also an essential component of the foundry and casting industries. The largest foundry industry
is in Korea where it dominates the industry particularly for large marine components. The quality for foundry
sand is distinguished from glass sand with the requirement for a size and grain shape specification rather
than the mineralisation required for glassmaking.
There has been significant recent development in the foundry market with the advent of 3D printing with
significant advancements in technology, materials, and applications, demonstrating the industry's rapid
growth and increasing impact across various sectors, including the foundry and casting industries.
The trend towards end-to-end workflow automation is gaining momentum. This includes AI-assisted design
software and automated post-processing, aiming to create a seamless, efficient workflow from design to final
product. This automation is expected to reduce human intervention and increase production efficiency.
There is a strong emphasis on sustainability, with efforts focused on using eco-friendly and recyclable
materials and implementing energy-efficient printing processes. This approach aims to minimise waste,
reduce carbon footprints, and promote circular economy principles.
The foundry industry is shifting its focus from technology to applications, addressing specific needs in sectors
such as healthcare, aerospace, and construction. This includes custom medical implants, lightweight
components, and sustainable building materials.
AI and machine learning are playing crucial roles in enhancing 3D printing capabilities. These technologies
are used for predictive maintenance, optimising print processes, and improving material usage, leading to
greater efficiency and quality.
Recent advancements in 3D silica sand printing media for casting have shown significant progress, offering
numerous benefits over traditional established methods.
3D printing allows for the creation of highly intricate and complex mould geometries that are challenging to
achieve with conventional techniques. New technologies enable precise and detailed patterns, enhancing
the capability to produce complex internal passages without additional tooling or post-processing.
Additive manufacturing (AM) is increasingly being adopted in the consumer products industry for mass
production. AM enables the combination of form and function early in the design process, allowing for
innovative and efficient product development.
As an example, new materials and systems are being developed for medical and dental applications.
Companies have introduced Premium Teeth Resin for dental 3D printing and a new resin pumping system
to enhance production efficiency.
Innovations in materials and printing techniques continue to emerge, including advanced polymers and
metals capable of operating at high temperatures and improved compatibility with AM processes. These
advancements are broadening the range of applications for 3D printing.
Overall, these developments underscore the transformative potential of 3D printing across various industries
including the foundry and casting industry, driven by advancements in automation, materials, and application-
specific solutions.
VRX is engaged with foundry companies developing and using these new and innovative technologies with
the aim of producing the specification of foundry sand required, particularly from the Arrowsmith North silica
sand project.
The largest consumption of lower quality silica sand is for the manufacturing of concrete.
Silica sand is a finite resource that is rapidly being exhausted, and the Asia-Pacific region is currently
experiencing increasing demand at a time of a diminishing global supply.
COMPANY REVIEW
VRX Silica Limited
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Project development pipeline to ensure a disciplined, staged development of world-class assets
The Arrowsmith North silica sand project (Arrowsmith North) will lead a staggered and disciplined
development program, followed by the Muchea silica sand project (Muchea), the Arrowsmith Central silica
sand project (Arrowsmith Central), Arrowsmith Brand silica sand project (Arrowsmith Brand) and the
Boyatup silica sand project (Boyatup).
VRX has the most-developed ASX listed company silica sand projects in Australia with planning, Aboriginal
heritage, environmental approvals, metallurgical testwork studies and plant engineering well advanced,
having commenced applications for exploration tenements and required field studies in 2017.
Mining Leases are granted over four of its five projects as well as various Miscellaneous Licences for access,
with permitting and infrastructure preparations well-advanced.
The scale of the projects provides for a long-term opportunity for silica sand export and potential for glass
manufacturing and unique downstream industries in Western Australia.
Austrade Critical Minerals Prospectus
Arrowsmith North and Muchea were included in the initial Australian Critical Minerals Prospectus for 2022
published by Austrade.
The prospectus includes technical, commercial, and geological data to facilitate investment into projects for
Australia’s identified critical minerals. To-date, the prospectus has received significant recognition among
interested foreign investors and buyers, Australian corporates, and the Australian government for its
significant role in marketing opportunities in the Australian and export markets.
The recognition by the Australian Government that silicon and silica sand are a critical mineral and that VRX
has significant potential to address anticipated production shortfalls, build supply chain security, and help
deliver progress on a net-zero future is an important step forward.
Both projects were again included in the Australian Critical Minerals Prospectus for 2023 and 2024.
The publications have been widely distributed by Austrade during Government trade delegation promotional
trips to trading partner countries, leading to a significant increase in enquiries from countries visited for the
purchase of silica sand products from Australian producers. VRX has been contacted by potential trading
partners from India for glassmaking and foundry sand, and Indonesia, Saudi Arabia and China for
glassmaking sand. These enquiries have confirmed the fundamental issues concerning the dwindling supply
of silica sand globally, particularly high-grade sand, and the looming shortfall that has been predicted for
some time.
VRX continues to engage with potential buyers that have received samples of products from Arrowsmith
North and Muchea.
The updated, digital Australian Critical Minerals Prospectus was launched in Perth in September 2024 by
Minister for Trade and Tourism, Don Farrell, and Minister for Resources, Madeleine King.
Once a static document, the Prospectus is now a dynamic source of information that will be updated regularly
as projects develop and additions are made to the Critical Minerals List. The new, interactive tool also allows
users to tailor their search to specific criteria, with the ability to filter projects by critical mineral, state, company
and project development status.
The Prospectus is on the Austrade website and can be accessed here.
Arrowsmith North
The mining and processing operation is relatively simple and low impact with long-term production expected
to commence initially at Arrowsmith North on the 221Mt Proved and Probable Ore Reserve (9.2Mt Proved
and 212Mt Probable), subject to final environmental approvals.
BFS
The initial bankable feasibility study (BFS) prepared and released to ASX in August 2019 (2019 BFS) was
updated following detailed engineering on a tailored 2Mtpa processing plant with all capital and operating
components and released to ASX in March 2024 (Updated BFS).
The Updated BFS confirms Arrowsmith North maintains robust economic metrics that will potentially supply
up to four silica sand products for a growing Asian market.
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VRX Silica Limited
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The capex update incorporates final engineered equipment and supporting infrastructure as well as the
purchase of offset land required to finalise the approvals process. The operating cost update is based on
budgeted estimates by noted contractors and incorporates our unique VDT rehabilitation methodology.
Key Outcomes from Updated BFS
Post Tax, ungeared NPV10
$166,700,000
Post Tax, ungeared IRR
35%
Payback period (yrs) (post tax) (ramp up rate)
4.4
Exchange Rate US$/A$
$0.66
Life of Mine (yrs) (BFS Study)
25
EBIT
$965,000,000
Total Sales (25 years) no escalation
$2,691,000,000
Life of Mine C1 costs, FOB Geraldton (inc Royalties)
$31.43
Cashflow after finance and tax
$650,000,000
Capex (2 mtpa)
$66,787,100
Capex contingency (inc)
20%
Life of Mine C1 costs, FOB Geraldton (inc Royalties)
$31.43
Tonnes Processed (million tonnes) (BFS Study)
52
Probable Reserves (million tonnes) @ 99.7% SiO2
221
Reserve life (yrs)
111
JORC Resources (million tonnes)
512
Capital expenditure has increased materially since the 2019 BFS, however this remains modest with an
approx. 4.4 year payback. The increase is largely driven by:
•
a significant change to the process circuit from gravity spirals to attritioning and HydrofloatTM that will
produce superior products but has a higher initial capital cost component;
•
a significant rise in steel, concrete and construction labour costs for the processing plant, with prices for
fabricated steel having doubled since the previous estimate in 2019;
•
additional costs associated with power reticulation, flotation reagent storage and additional supporting
infrastructure for administration and laboratory services;
•
additional costs for the construction of the road and designed and approved Brand Highway intersection,
and
•
purchase of Offset land to conform with State Offsets Policy guidelines.
Figures below show renders of the proposed operating plant and surrounding area.
Capex also includes a 20% contingency, notwithstanding the re-tendering of supplied capital components.
This reflects the Company’s conservative approach to pricing when modelling the financial metrics for the
project. In efforts to reduce the capex, the Company continues to seek out second-hand equipment for
refurbishment and to-date has sourced a feed trommel and final screen, with significant cost-savings as
compared to new equipment.
Operating expenditure has increased marginally from the 2019 BFS.
Sale prices for silica sand products have been left unchanged towards the lower end of the range of estimates
provided for in the 2019 BFS, despite the growing market for silica sand products in Asia and upward pricing
pressures. Again, this reflects the Company’s conservative approach to pricing when modelling the financial
metrics for the project as well as providing an additional contingency.
COMPANY REVIEW
VRX Silica Limited
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Figure 2: An aerial view render of the proposed Arrowsmith North processing plant and facilities Project Locations
Figure 3: Close up render of proposed processing plant at Arrowsmith North
The Updated BFS also incorporates production from upgraded Reserves following a new Mineral Resource
Estimate completed in November 2022. This followed a program of close spaced grade control drill holes to
increase the confidence in the early mining stages with approximately 6 years of initial production from Proved
Reserves.
COMPANY REVIEW
VRX Silica Limited
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The Company has identified long-lead items and has commenced the specification and production of tender
documentation of processing equipment for the plant in preparation for the procurement process in order to
enable a timely construction program following a decision to mine at Arrowsmith North.
Delays in the approvals process that have afflicted the resources industry in general in Western Australia
have necessitated the final tender process for major equipment to be deferred until a more precise
commencement date can be established. However, previous tenders have identified Original Equipment
Manufacturers (OEM) that will be requested to supply updated tenders.
Process Water
A process water bore was previously drilled to access water from the Yarragadee North deep aquifer with
aquifer testing to supply data for an abstraction licence application for 0.9GlPa of water for the Arrowsmith
North processing plant requirements. Additional monitoring boreholes for the borefield have been completed.
The abstraction licence application was progressed with the required advertising of the proposed Abstraction
Licence Application being published on 7 August 2024 in both 'The West Australian' and the ‘Midwest Times’
newspapers, with a 15 day written objection submission period. No further correspondence has been
received.
Engineering
The following areas/items are detail designed, peer reviewed and ready to progress to execution:
•
Site and plant layout drawings.
•
The attritioning/flotation building (structural, mechanical, and concrete packages).
•
The product area (structural, mechanical, and concrete packages).
•
Rejects cyclone stacker.
•
Civil works for the plant & product area.
•
Civil works for the southern access road.
•
Civil works for the Brand Highway interface. (Note that this has been fully approved by Main Roads
WA).
•
Concrete has been detail designed.
•
Electrical reticulation design and single line diagrams.
•
Process Flow Diagrams (PFDs).
•
Piping & Instrumentation Diagrams (PIDs).
•
Circuit mass balance.
•
Water management.
•
Mechanical Equipment List (MEL).
•
Fabrication drawings verified.
•
3D design model.
Equipment
The following major equipment OEMs have been selected as preferred and used in the detailed design:
•
Cyclone cluster
•
Attritioners
•
Hydrofloat separators
•
Classifiers
•
Conditioning tank
•
Thickener
•
Transformers
•
Ring main unit
•
MCC/switchrooms
•
Product dewatering screens
•
Feed hopper and conveyors
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VRX Silica Limited
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•
Slurry pumps
•
Water pumps.
•
Air compressors.
The following minor equipment is yet to be officially tendered:
•
Bore pumpset.
•
Transportable buildings.
•
Samplers.
•
Pipe supply.
•
Fabricated steelwork, chutes, etc.
Project Execution Schedule
The most recent execution schedule uses the following key milestones prior to the decision to commence
construction:
•
Finalise finance and establish construction commencement date
•
Final Investment Decision (FID)
•
Approval to place orders for major long lead equipment
•
Site access date for plant construction
Project Cost Estimate
The baseline project cost estimate, determined in March 2024, is $66.8M (including 20% contingency). The
cost estimate will be updated with key equipment re-tendered prior to FID.
FID
The FID will be decided following final mining approvals, financial arrangements committed and adequate
offtake agreements committed.
Power Supply
VRX has been considering for some time how to best take advantage of the abundant supply of LNG from
nearby gas fields to meet power requirements at Arrowsmith North.
Desktop modelling indicates that a gas-driven powerhouse and transmission solution is not only cost effective
but will reduce the project’s carbon footprint and expected greenhouse gas emissions.
VRX has engaged with ResourcesWA to pursue a power supply solution for Arrowsmith North utilising gas
directly from a local wellhead.
This power solution has the potential to provide the most economic low emission power supply to Arrowsmith
North.
The Company continues to investigate the potential for a gas fired power supply also with a potential solar
power supply hybrid system.
Logistics
The Company is engaging with the Mid West Ports Authority (MWPA) for export of silica sand product from
Geraldton Port to enable a storage area and shiploading within their Port Maximisation Plan. Proposed sites
for future storage and berth access for shiploading have been identified.
The Company has access to the adjacent Brand Highway from the Arrowsmith North processing plant site
and an approved road intersection construction plan from Main Roads WA to enable road transport of silica
sand product in the short-term. The Company has prepared tender documents for the short-term haulage
operations.
COMPANY REVIEW
VRX Silica Limited
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Arrowsmith North Environmental Approvals Process
VRX has conducted extensive environmental studies on its silica sand projects over a number of seasons in
anticipation of requirements of the State and Federal environmental regulation authorities to undertake
approvals assessments. These surveys commenced shortly after the tenements were acquired and the
number and extent of these surveys have expanded following further consultation with these authorities. The
Company has initially concentrated on gaining approval for development of the Arrowsmith North project.
VRX has received confirmation from the Commonwealth Department of Agriculture, Water and the
Environment (now Department of Climate Change, Energy, the Environment and Water) (DCCEEW) for
accredited approval under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act).
Accreditation of the EPA’s assessment processes means that the Commonwealth can rely on environmental
assessments undertaken by the EPA for the purpose of its approval decisions under the EPBC Act on
proposals that are likely to have a significant impact on a matter of national environmental significance.
The commencement of assessment of the Arrowsmith North proposal was a referral to the Western Australian
Department of Water and Environmental Regulation (DWER) and the EPA for assessment under Part IV,
Section 38 of the Environmental Protection Act 1986 (WA) (EP Act). This was lodged in March 2021. The
referral was reviewed, and the EPA determined in May 2021 that the Proposal would be assessed at a Public
Environmental Review (PER) level, with a requirement for a four-week public review period.
The second step was the lodgment of an Environmental Scoping Document (ESD) which was lodged with
the EPA in September 2021 and approved in April 2022.
The third step was to lodge with the EPA the Environmental Review Document (ERD) for Arrowsmith North.
This was lodged in May 2022. The ERD is required under the EPA’s public environmental review process
and was released for public review following assessment and acceptance by the EPA and other relevant
authorities. The ERD is a comprehensive summary of the project environmental setting, the physical
elements of the mine and infrastructure, operational elements, the extent of effects on the environment and
the proposed rehabilitation and closure plan. The Company received a request from the EPA for further
information in early July 2022 and the response was submitted later that month.
As per the Procedures Manual, the ERD was distributed for review by relevant government agencies,
subsequently a request for additional information was received in November 2022. The Company lodged a
revised ERD (Revision D) in December 2022.
In June 2023 DWER confirmed the ERD for Arrowsmith North had been accepted for publication and a four-
week PER period.
The PER process commenced on 19 June 2023 for a four-week period and included a requirement for VRX
to respond to all comments received with a Response to Submission (RtS) document.
Following the PER period DWER compiled public submissions and were provided to the Company in
September 2023 to review and respond.
The Company prepared a RtS and lodged with EPA on 31 September 2023.
Following review by the EPA and DCCEEW comments were received on 10 April 2024. The RtS was revised,
and a second Version B was lodged on 24 May 2024. Following meetings with the EPA a final version has
been compiled that includes a comprehensive Rehabilitation Management Plan (RMP). This document was
peer reviewed before re-lodging with the EPA in September 2024.
Importantly the RMP will establish the credentials for the use of VDT in Kwongan Heath, which is the
vegetation encountered at Arrowsmith North and also for the grasses and sedges within Banksia Woodland
at our other projects. It is estimated to result in the best restoration of the mine area vegetation and habitat
within the mine area.
The ERD and further information on the proposal is available on the EPA website at:
https://www.epa.wa.gov.au/proposals/arrowsmith-north-silica-sand-project
A copy of the ERD is also available on the VRX website at:
https://vrxsilica.com.au/arrowsmith-north-erd-documents/
COMPANY REVIEW
VRX Silica Limited
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The VDT methodology can be viewed at: https://vrxsilica.com.au/miningandrehabilitationmethodology/
Figure 4: VDT Modified Loader Bucket
Despite new guidelines published by the EPA which better align with DCCEEW guidelines the assessment
of Offsets is not included in an accredited assessment advice despite the State/Federal bilateral agreement
which covers assessments under the EPBC Act 1999 and includes the Offsets Policy. The Offset will be
assessed in parallel with the ERD.
Objectives and Principles of Offsets
No Net Loss Principle: Offsets aim to ensure that there is no net loss of biodiversity and ecological values.
This principle underpins both state and federal environmental policies.
Additionality: Offsets must provide benefits that are additional to what would have occurred in the absence
of the offset. They cannot merely protect what is already protected by law or under threat of degradation.
Proportionality: The scale and nature of the offset must be proportionate to the residual impacts of the
project.
Durability: Offsets should be enduring, lasting at least as long as the impacts they are compensating for.
Future Work
VRX has now completed all mining and processing pre-production works as well as the production of bulk
material of the various final products and detailed engineering design of the planned processing plant is close
to completion. VRX is in the final stages of gaining regulatory approval to commence construction once all
approvals are in place.
Arrowsmith Central
Arrowsmith Central is another of the Company’s silica sand projects under development.
Approvals
As the environmental approval process for Arrowsmith North nears completion and the Company turns its
attention to Muchea, the Company has postponed the approval process for Arrowsmith Central and
withdrawn the referrals to both DWER and DCCEEW. DWER policy changed so that it wil assess only one
project per company at any one time, so no progress was made on the referral for Arrowsmith Central whilst
Arrowsmith North was underway.
COMPANY REVIEW
VRX Silica Limited
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Arrowsmith Brand
The Arrowsmith Brand Mining Lease (M70/1418) has an area of 1,994 Ha and sits predominately within
Exploration Licence E70/5027, partially within E70/5109 and is contiguous with the granted Arrowsmith North
Mining Lease (M70/1389).
The Company is reevaluating the holding at Arrowsmith Brand and its priority in the development hierarchy
of its extensive silica sand projects.
Muchea
Development of Muchea will follow Arrowsmith North.
The Company has had many offtake enquiries for Muchea silica sand from Asian markets and believes that
the consistent production of such high-grade silica sand with a low iron content will be in high demand as raw
material for the manufacture of predominately premium ultra-clear glass production, particularly for the
burgeoning solar panel manufacturing industry. VRX continues to receive these enquiries on a regular basis.
Environmental Studies
Detailed springtime flora and vegetation studies were undertaken during the springtime months on a selected
priority area of 450Ha.
This survey will comply with the requirements of the Environment Protection Authority Environmental Factor
Guideline: Flora and Vegetation, and Technical Guidance – Flora and Vegetation Surveys for Environmental
Impact Assessment (2016a and 2016b).
The final flora and vegetation report includes previous survey results and the recent survey results from
quadrats, targeted searches as well as historical information that relates to the root structure, density and
distribution of the key species.
The Priority Area has been selected as an area that has only two vegetation types and is restricted to Low
Banksia Woodland on loose sand, which covers the Company’s production target area.
Work to date indicates that the selected area has no Priority Species of flora and no thickets of paperbark
which are restricted to low lying areas and generally have more fauna species.
Exploration
In April 2023 a Program of Works (PoW) to drill on existing tracks, south of the granted mining lease
M70/1390, was approved by the Department of Energy, Mines, Industry Regulation and Safety (or DMIRS,
as it was then known). This program was planned to infill a previous hand auger program that was completed
as part of the due diligence process prior to the acquisition of the project1. Vacuum drilling over 5 days in
November 2023 completed 69 holes for 953.5 metres. Drilling was spaced typically 200m along the tracks
infilling the original drilling.
1 VRX: ASX announcement of 5 April 2018, “Muchea Silica Sand Project Drill Results”
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VRX Silica Limited
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Figure 5: Vacuum drilling at Muchea
As expected, the drilling intercepted high quality white sand, with holes being drilled to the full depth allowable.
Assays are pending. A second stage of drilling has been approved and following completion of drilling the
Mineral Resource Estimate will be updated.
The Company referred a Proposal to undertake further exploration drilling and trials of the Vegetation Direct
Transfer rehabilitation methodology (VDT Trials) within M70/1390 to support the future development of
Muchea to the Federal Department of Climate Change, Energy, the Environment and Water (DCCEEW) for
an assessment under the EPBC Act. The Department determined that the proposal is not a controlled action
and that the works may be carried out under certain conditions.
VDT Trials
In 2023 VRX applied to undertake trials of its vegetation direct transfer (VDT) mining method and this was
approved by the Department of Energy, Mines, Industry Regulation and Safety and Commonwealth
(DEMIRS) and State environmental authorities for Arrowsmith North and Muchea.
Unfortunately, a bush fire has passed over the designated area at Muchea and an alternative area is to be
selected with a PoW to be lodged at DEMIRS.
While the selected area will require a new Native Vegetation Clearing Permit, the burnt area will not require
further surveys if the operations (including exploration drilling) are conducted in the next two years. The
Company has established photo control points to monitor the recovery of the different vegetation types in the
burnt areas.
COMPANY REVIEW
VRX Silica Limited
15
Figure 6: Muchea Burnt Area
VDT Bucket
VRX commissioned the manufacture of a Modified Cat 980 Bucket and Quick Hitch for VDT trials to be
conducted at Muchea.
The bucket was modified by Piacentini and Son in their Picton engineering workshop near Bunbury.
COMPANY REVIEW
VRX Silica Limited
16
Figure 7: Modified VDT loader bucket
Muchea Aboriginal Heritage
VRX has undertaken comprehensive Aboriginal Ethnographic and Archaeological heritage surveys over the
Priority Area to identify and understand Aboriginal heritage values within the area to support future dialogue
with the Whadjuk people about the proposed mining project.
Boyatup
An examination of the Particle Size Distribution (PSD) data indicates that the Boyatup project contains a
generally finer sand than that encountered at the Company’s other projects.
The potential products that can be produced have been identified and a marketing study completed. What is
apparent is that the potential products are different to the products from the Company’s other projects and
will be aimed at yet another potential market and not conflict with already identified markets.
COMPANY REVIEW
VRX Silica Limited
17
A desktop flora and vegetation study indicates that the Boyatup silica sand project will be amenable to the
Company’s proposed VDT rehabilitation methodology.
Figure 8: Boyatup typical vegetation
Geothermal Exploration Permit
In January 2022 DMIRS released 21 areas in Western Australia for applications for Geothermal Exploration
Permits with a closing date for applications of 21 April 2022.
VRX applied for three Geothermal Exploration Permits as part of the 2022 Geothermal Acreage Release,
located south of the Arrowsmith Project.
The Company has been granted GEP 44 (G22-16) at Dandaragan.
VRX has executed a farm-out agreement with Steam Resources (since re-named Hydro X Gen Pty Ltd
(HXG)).
Geothermal technology has the potential to produce long term dispatchable renewable energy for the Mid-
West region, including VRX’s Arrowsmith silica sand projects.
The grant of GEP 44 was announced to ASX on 28 July 2023. It consists of 8 contiguous blocks and the
area includes the Walyering gas field currently under development on EP447 a Joint Venture between Strike
Energy 55% and Talon Energy 45%. The project provides an opportunity to work with these gas companies
and use extensive historical and current data to explore potential geothermal power options.
Under the terms of the Agreement, HXG can earn up to a 90% interest in GEP 44. Steam is required to
complete an agreed exploration program and drilling campaign by 31 July 2026 to earn an initial 40% interest
in the project and an additional 30% interest by completing a feasibility study assessing the economic viability
of the production of energy from geothermal sources within the project area by that date. Steam may earn
an additional 20% interest upon the production of energy from geothermal sources within the project area by
31 July 2029.
VRX is not required to contribute funding for development of the project.
HXG has the requisite experience and expertise to explore and develop the project.
COMPANY REVIEW
VRX Silica Limited
18
Figure 9: Dandaragan Geothermal Exploration Permit Location
GEP
Holders
Grant Date
Term
5l Blocks
GEP 44
VRX Silica Ltd
27 July 2023
Six (6) years
8
Table 1: VRX Silica Geothermal Exploration Permit
This geothermal exploration initiative was undertaken by VRX to support our silica sand projects and long-
term ambitions for the production of glass in Western Australia. Geothermal energy is a reliable, long-term
renewable energy source and an opportunity for a new renewable energy industry in the Mid West.
VRX will retain the rights to any minerals that may be encountered in the development of the geothermal
project.
Effective 15 December 2023, GEP 44 was transferred by VRX to a 100% owned subsidiary VRX Geothermal
Pty Ltd, and the Agreement has, accordingly, been novated to that entity.
COMPANY REVIEW
VRX Silica Limited
19
Geothermal Exploration Concept
A geothermal energy source is an accumulation of extractable heat deep in the Earth’s subsurface. Heat
(thermal energy) is directly proportional to temperature, and water (either liquid or vapor) is almost always the
medium by which geothermal energy is brought to the Earth’s surface via boreholes. For geothermal energy
to be extractable, water must be able to flow through hot rock from an injection well to a production well.
For ‘hot sedimentary aquifers’ (the principal target in the North Perth Basin), it is important to target the
maximum temperature, volume and transmissivity of the reservoir rocks. The goal of a geothermal exploration
program is to progressively build confidence in predictions of temperature, reservoir properties, and geometry
(depth, extent, thickness) of target geothermal reservoirs, culminating in the drilling of one or two appraisal
wells. Semi-independent work streams can investigate the three elements (temperature, reservoir properties,
geometry) in parallel, with results integrated into one or more ‘conceptual models’ of the geothermal system(s).
GEP 44 is in an area of petroleum gas production development, providing an opportunity to work with the
current gas companies to use extensive historical and current data to explore for potential geothermal power
options. Not all petroleum well data will be ideal for the exploration of geothermal energy, however it will
provide a good basis and guide on where to create new information.
Metallurgical Testwork R&D
In April 2024, VRX lodged a registration for an R&D Tax Incentive Application with AusIndustry for the year
ending June 2023.
The Company lodged a claim for the financial year ending June 2023 and received a refund of $143,765 in
September 2024.
Silica Flour Program and Investment Attraction Fund Grant
On 18 July 2023 VRX announced it had received confirmation from the Western Australian State Government
that the Company’s grant application for $2 million in matched funding under the Investment Attraction Fund
(IAF) has been approved with a Financial Assistance Agreement (FAA) for the grant executed that day.
The IAF is part of the State Government’s Diversify WA initiative, a collaboration between government,
industry and the community supporting the WA Government’s focus on creating secure, quality jobs, growing
and diversifying the economy and attracting new investment.
The grant under the IAF is being awarded on a matched funding, dollar for dollar basis, whereby the IAF will
provide a financial contribution to VRX up to $2m.
To date the Company has received $200,000 under the grant program.
The project proposed by VRX will investigate the potential to develop a high purity quartz (or HPQ) flour
manufacturing process and pilot plant in Western Australia, which if successful will lead to the development
of a larger commercial plant for large scale processing.
VRX intends to develop a High Purity Quartz flour manufacturing process to meet a standard of 99.999%
SiO2 (5N) purity. This involves the establishment of a new lower purity quartz resource to be beneficiated in
quality, allowing a new manufacturing process tailored to beneficiating the purity of Western Australia quartz
and finally the establishment of the high purity quartz flour manufacturing plant and the associated supply
chains.
The key objective of this project is to commercialise the manufacturing process of High Purity Quartz flour
within Western Australia. This will involve sourcing and beneficiating the purity of lower quality quartz through
primarily mechanical and possibly chemical processes. The establishment of a process and purity standard
has the potential to lead to a manufacturing facility, commercial partners and a supply chain for the critical
minerals.
COMPANY REVIEW
VRX Silica Limited
20
The three main objectives for the project are:
•
To determine the key elements that would lead to the successful commercialisation of a
manufacturing process to beneficiate the quality of the lower purity quartz (99.9% SiO2) to a higher
silica grade.
•
To complete a pre-feasibility study that would determine the grade of quartz and processing
method that could feasibly be manufactured from its existing feedstocks with a target of reaching
99.999% SiO2 purity quartz flour.
•
To establish a full-scale manufacturing plant to process the resource into high purity quartz flour
utilising the work from the previous objectives, testwork and marketing carried out as a backbone to
support the future work to be carried out.
The HPQ market is one of growing demand but with a relatively small supplier base.
Initially, VRX will investigate the potential for the coarse material that will be produced from Muchea. Recent
pilot plant work completed on a 2.2 tonne bulk sample of Muchea sand indicated that a portion of project ore
may meet the specification required.
Whilst the goal is to achieve the high-quality required, by raising its high-grade silica sand resource from
Muchea to at least “4 nines” or “4N” (ie. 99.99% SiO2 purity) it would still allow a wide range of high demand
large-value products to be made. This includes use as a feed material for several industries and downstream
products including paint fillers, fibreglass, water purity media, and silica flour for the production of LCDs and
silica gels.
Sample Shipped for High Grade Silica Flour Testwork
In November 2023 the Company dispatched a 1,000kg sample of selected sand from the Muchea Silica Sand
Project to a specialist laboratory in Germany.
The testwork determined the potential yield, quality and power requirements to produce a suitable silica flour
to be used for manufacturing of LCD glass.
As the market for LCDs is steadily increasing, so too is the requirement for suitable high quality silica flour
used in their manufacturing.
Muchea silica sand has the potential to produce the grade and quality of sand that will provide the raw material
for the production of such silica flour.
This specialised testwork will determine the parameters required to produce the quality required and the
economic inputs to assess the viability of the process.
The Western Australian State Government is contributing to the testwork program and potentially the pilot
plant required through the Investment Attraction Fund (IAF) grant noted above.
This was a significant step towards determining the potential for further downstream processing from Muchea
and a new industry for Western Australia with commensurate additional jobs and royalties.
The demand for HPQ flour has steadily increased as has the price. The figure below shows the export price
of silica flour from Taiwan, over the last 3 years.
COMPANY REVIEW
VRX Silica Limited
21
Figure 10: Taiwan Export Price – Silica Flour
Comminution and grinding tests were completed by the specialist test facility in Germany. The test results
will inform VRX with the equipment list and process design for a silica flour pilot plant. This plan is in line with
the IAF Grant application.
The production of HPQ flour requires only grinding and classification of silica sand raw material and no
chemical processing. Closed circuit grinding undertaken with air classification provides the on-spec size
fractions. The process can result in a portion of fines, termed “by-product”. This by-product is a lower value,
but saleable product, that can be used in fiberglass applications, or if sufficiently high quality, it can be sold
into higher value ceramic and paint filler markets. The key to a high margin silica flour processing operation
is starting with the right raw material. The Company believes that the coarse material at Muchea is suitable
and will produce a high yield of suitable silica flour.
Silica flour for LCD glass is only one of the potential commercial outcomes from the grinding program.
Further chemical processing of the silica flour may lead to suitable High Purity Quartz (HPQ) which is used
in the production of silicon wafers used in photovoltaic cells for solar panels. Also, the production of silica
gels requires high quality silica powders, these can be used in thermal protection for lithium ion batteries and
many other applications. Thermal processing of silica flour and powders can produce other high value
products such as Cristobalite and fumed silica.
These research and development activities, which start with the production of silica flour, will ultimately result
in high value downstream processing opportunities that will maximise the value of VRX’s world-class high-
quality Muchea Silica Sand Project.
High Grade Silica Flour Testwork Results
In January 2024 VRX announced results of its specific high-grade silica flour comminution testwork on its
Muchea Silica Sand Project products conducted at a specialist laboratory in Germany.
The testwork was to determine the potential yield, quality and power requirements to produce silica flour
suitable for the manufacture of LCD glass.
The results of the testwork were largely in line with the Company’s expectations and determined that Muchea
silica sand is suitable for producing high grade silica flour for the rapidly expanding LCD glass market.
This testwork on Muchea silica sand has also determined the parameters required for an economic
assessment into the viability of the potential for a new industry in WA which will follow the testwork program.
COMPANY REVIEW
VRX Silica Limited
22
The testwork program has also provided a suitable quantity of samples to be forwarded to potential buyers
which allows VRX to commence its marketing program for potential end users.
The testwork program followed a typical flow sheet of ball mill grinding followed by air classification and sizing
to produce the specific particle size required by LCD glass manufacturers. The target specification, provided
by VRX, conforms to the requirements of major producers of LCD screens in Asia.
The testing resulted in determining two critical outcomes; the bond work index (BWI) required to reduce the
particle size of the Muchea sand feed to that required for the product specification, and the preferred product
yield.
The BWI has been determined at 23.7kW/t, with a product yield of 44.1%. These figures are consistent with
VRX expectations for this level of study. The BWI now allows VRX to determine a pilot plant scaled list of
equipment. It is anticipated that OEM will provide equipment and basic layouts, and VRX will employ a local
engineering company to design and construct the pilot plant. Once operational, the pilot plant will be fine-
tuned to provide the required specification and an expectation of an increase in product yield.
All testing material and products are being returned to VRX for elemental testing to determine they conform
to product specification for key elements, in particular iron. It is not expected that the precursor sand has
been significantly changed as all media used in testing was ceramic. Samples of the final products will be
sent to the major silica flour customers in Asia to confirm they conform to their specifications. The overground
fines, or “by-product”, will also be marketed in Asia and in local industries such as fibreglass, paint and epoxy
filler applications.
Once the products are received, VRX will consider other downstream processing options. These research
and development activities, which start with the production of silica flour, will ultimately result in high value
downstream processing opportunities that will maximise the value of VRX’s world-class high-quality Muchea
Silica Sand Project.
Extension of Xodus MOU
In December 2023 VRX Silica agreed to a 12 month extension of its non-binding memorandum of
understanding (MOU) with Xodus Group Pty Ltd (Xodus) to 31 December 2024.
First announced in March 2022, the MOU seeks to explore the future supply of renewable hydrogen to the
Company’s silica sand projects as well as to potential, nearby glass-manufacturing facilities to enable the
production of net-zero glass.
Xodus, a global energy consultancy, specialises in the integration of environmental science, engineering and
management to provide holistic support and services in energy transition. An Xodus-led consortium is
developing Project MercurHy for the industrial-scale production of hydrogen gas using renewable energy in
the Mid West region of Western Australia.
The MOU with Xodus establishes a platform for strategic confidential communication and future co-operation
between the parties. It contemplates the sharing of information with a view to a future offtake of between
9,000 tonnes to 11,000 tonnes of hydrogen per annum, which is adequate to supply a substantial glass-
making facility.
Corporate
Capital Raising
In August 2023, the Company announced a $3 million capital raising, comprising a share placement of $1.5
million (Placement) and a share purchase plan of up to $1.5 million (SPP). Participants in the Placement and
the SPP were entitled to subscribe for one free-attaching option for every two new shares issued, each at an
exercise price of 18 cents and expiring on 31 August 2025.
The Placement to new and existing sophisticated investors comprised the issue of 12,500,000 new fully paid
ordinary shares in the Company at a price of 12 cents per share, to raise $1,500,000 (before costs). The
shares were allotted and issued on 1 September 2023.
Under the SPP offer, eligible shareholders could apply for up to $30,000 worth of new shares at a price of 12
cents per share. By close of the offer, the Company received applications for 10,416,696 shares and
5,208,386 free-attaching options for an aggregate of $1.25 million. The shares and options under the SPP
and the options under the Placement were allotted and issued on 29 September 2023.
COMPANY REVIEW
VRX Silica Limited
23
On 2 May 2024 the Company announced a fully underwritten renounceable pro-rata entitlement issue to
eligible shareholders of one new fully paid ordinary share for every 13 shares held on the record date, at an
offer price of $0.055 per New Share, together with one free attaching option (exercisable at $0.18 each and
expiring on 31 August 2025) for every two new shares subscribed for and issued, to raise approximately
$2.46 million (before expenses).
On 27 May 2024 the Company announced it had received valid applications for 11,224,203 new shares and
5,612,157 free-attaching options, raising $617,332. The remaining 33,652,917 shares and 16,826,468
options (approx. $1.85 million) not taken up under the offer was issued to sub-underwriters, and an additional
22,437,637 options were issued to sub-underwriters pursuant to the underwriting arrangements.
The new shares and new options were allotted and issued on 29 May 2024.
The proceeds are being applied to the Company’s Muchea project, Arrowsmith North project, VDT trials and
environmental follow-up, working capital and expenses of the offer.
Canaccord Genuity (Australia) Limited (AFSL 234666) acted as lead manager and underwriter to the offer.
This offer replaced an earlier renounceable pro-rata entitlement, first announced on 10 April 2024 and
withdrawn on 2 May 2024.
Reduction in corporate overheads and costs management
On 3 June 2024, the Company announced the completion of a top-down review of corporate overheads and
expenditure and the introduction of cost saving initiatives across the business, with director fees and salaries
reduced by 50% and significant cost control measures implemented on non-critical exploration activities and
project development costs, personnel and corporate administration.
VRX noted that the Board is cognisant of the need to preserve capital as the regulatory approvals process
continues beyond originally expected timeframes and the cost control measures form part of a prudent capital
management program for the Company.
Events Subsequent to the Period
Environmental approvals
The Company has lodged a revised Response to Submissions document with the State EPA services for
assessment.
The next step in the process is publication of the document on the EPA website.
COMPANY REVIEW
VRX Silica Limited
24
Mineral Resources and Ore Reserves Statement (as at June 30 2024)
In accordance with ASX Listing Rule 5.21, VRX reviews and reports its Mineral Resource and Ore Reserve
Estimates at least annually. The date of reporting is 30 June each year, to coincide with the Company’s end
of financial year balance date. If there are any material changes to its Mineral Resources or Ore Reserves
over the course of the year, the Company promptly reports these changes.
Mineral Resources
The Mineral Resources for VRX as at 30 June 2024 are shown below and are unchanged from 30 June 2023.
Project
Classification
Mt
SiO₂
%
Al₂O₃
%
Fe₂O₃
%
TiO₂
%
LOI
%
Muchea
Indicated
29
99.6
0.1
0.03
0.1
0.2
Inferred
179
99.6
0.1
0.02
0.1
0.2
Total
208
99.6
0.1
0.02
0.1
0.2
Arrowsmith
North
Measured
10
95.9
1.9
0.7
0.3
0.7
Indicated
237
97.7
1.0
0.4
0.2
0.5
Inferred
266
98.4
0.7
0.3
0.2
0.4
Total
513
98.0
0.9
0.3
0.2
0.4
Arrowsmith
Brand
Inferred
523
97.3
1.4
0.4
0.2
0.6
Total
523
97.3
1.4
0.4
0.2
0.6
Arrowsmith
Central
Indicated
28.2
96.6
1.7
0.4
0.2
0.7
Inferred
48.3
96.9
1.5
0.4
0.2
0.7
Total
76.5
96.8
1.5
0.4
0.2
0.7
Boyatup
Inferred
60
97.8
0.8
0.2
0.1
0.9
Total
60
97.8
0.8
0.2
0.1
0.9
Total Mineral Resource
1,381
Million Tonnes
COMPANY REVIEW
VRX Silica Limited
25
Ore Reserves
The Ore Reserves for VRX as at 30 June 2024 are shown below and are unchanged from 30 June 2023.
Project
Classification
Product
Mt
SiO2
%
Al2O3
%
Fe2O3
%
TiO2
%
LOI
%
Muchea
Probable
F80
10.2
99.9
0.02
0.008
0.03
0.1
F80C
4.25
F150
4.25
99.8
0.07
0.015
0.035
0.1
Muchea Ore Reserve
18.7
Million Tonnes
Arrowsmith
North
Proved
AFS20
0.8
99.5
0.25
0.07
0.05
0.1
AFS35
3.9
99.5
0.5
0.06
0.05
0.1
AFS55
2.7
99.2
0.5
0.1
0.05
0.1
Local
1.8
Proved Ore Reserve
9.2
Million Tonnes
Probable
AFS20
24.2
99.5
0.25
0.07
0.05
0.1
AFS35
102.5
99.5
0.5
0.06
0.05
0.1
AFS55
51.1
99.2
0.5
0.1
0.05
0.1
Local
34.1
Probable Ore Reserve
212
Million Tonnes
Arrowsmith North Ore Reserve
221
Million Tonnes
Arrowsmith
Central
Probable
CF400
4.2
99.6
0.25
0.04
0.03
0.1
C20
8.4
C40
4.2
High TiO2
2.2
<1%
2%
Arrowsmith Central Ore Reserve
18.9
Million Tonnes
Total Ore Reserve
259
Million Tonnes
Compliance Statement
The information in this document that relates to the estimation and reporting of the Mineral Resource and Ore
Reserves for the Arrowsmith North, Arrowsmith Central, Muchea and Boyatup Silica Sand Projects is
extracted from releases to ASX on 28 August 2019 and 11 November 2022 (Arrowsmith North), 17 September
2019 (Arrowsmith Central), 9 May 2023 (Arrowsmith Brand), 18 October 2019 (Muchea) and 18 August 2022
(Boyatup). The Company confirms that it is not aware of any new information or data that materially affects
the information included in this document and all material assumptions and technical parameters
underpinning the estimates continue to apply and have not materially changed.
The Company’s governance and internal controls in place with respect to estimates of mineral resources and
ore reserves involve the use of external consultants where required, in conjunction with input by management
and review by the Board.
Competent Persons’ Statements
The information in this document that relates to Arrowsmith North, Arrowsmith Brand, Arrowsmith Central,
Muchea and Boyatup Exploration Results, and Muchea Aircore Drilling Area, Arrowsmith Brand and Boyatup
Mineral Resource Estimates are based on data collected and compiled under the supervision of Mr David
Reid, who is a full-time employee of VRX Silica. Mr Reid, BSc (Geology), is a registered member of the
Australian Institute of Geoscientists and has sufficient experience that is relevant to the style of mineralisation
and type of deposit under consideration and the activity being undertaken to qualify as a Competent Person
under the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves (JORC Code). Mr Reid consents to the inclusion of the data in the form and context in which
it appears.
COMPANY REVIEW
VRX Silica Limited
26
The information in this report that relates to Arrowsmith North Mineral Resources is based on, and fairly
reflects, information compiled by Mr David Williams, a Competent Person, who is an employee of CSA Global
and a Member of the Australian Institute of Geoscientists. Mr Williams has sufficient experience relevant to
the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking
to qualify as Competent Person as defined in the 2012 Edition of the Australasian Code for the Reporting of
Exploration Results, Mineral Resources, and Ore Reserves (JORC Code). Mr Williams consents to the
disclosure of information in this report in the form and context in which it appears.
The information in this document that relates to Arrowsmith Central and Muchea Auger area Mineral
Resources is based on information compiled by Mr Grant Louw who was a full-time employee of CSA Global,
under the direction and supervision of Dr Andrew Scogings, who is an Associate of CSA Global. Dr Scogings
is a Member of the Australasian Institute of Mining and Metallurgy and a Member of the Australian Institute
of Geoscientists. He is a Registered Professional Geologist in Industrial Minerals. Dr Scogings has sufficient
experience relevant to the style of mineralisation and type of deposit under consideration and to the activity
which he is undertaking to qualify as Competent Person as defined in the 2012 edition of the Australasian
Code for the Reporting of Exploration Results, Mineral Resources, and Ore Reserves (JORC Code). Dr
Scogings consents to the disclosure of information in this report in the form and context in which it appears.
The information in this report that relates to Industrial Minerals considerations for Arrowsmith North,
Arrowsmith Central and Muchea, with respect to Clause 49 of the JORC Code is based on, and fairly reflects,
information compiled by Dr Andrew Scogings, a Competent Person, who is an employee of CSA Global, a
Member of the Australian Institute of Geoscientists and is a Registered Professional Geoscientist (RP Geo.
Industrial Minerals). Dr Scogings has sufficient experience relevant to the style of mineralisation and type of
deposit under consideration and to the activity which he is undertaking to qualify as Competent Person as
defined in the 2012 Edition of the Australasian Code for the Reporting of Exploration Results, Mineral
Resources, and Ore Reserves (JORC Code). Dr Scogings consents to the disclosure of information in this
report in the form and context in which it appears.
The information in this document that relates to Arrowsmith Central and Muchea Probable Ore Reserves is
based on data collected and compiled under the supervision of Mr David Reid, who is a full-time employee
of VRX Silica. Mr Reid, BSc (Geology), is a registered member of the Australian Institute of Geoscientists
and has sufficient experience that is relevant to the style of mineralisation and type of deposit under
consideration and the activity being undertaken to qualify as a Competent Person under the 2012 edition of
the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC
Code). Mr Reid consents to the inclusion of the data in the form and context in which it appears.
The information in this report that relates to Arrowsmith North metallurgical test work is based on information
compiled by Mr Steven Hoban who is the Principal Metallurgist and a Director of BHM Process Consultants.
Mr. Hoban is a Member of the Australasian Institute of Mining and Metallurgy. Mr Hoban has sufficient
experience relevant to the style of mineralisation and type of deposit under consideration and to the activity
which he is undertaking to qualify as Competent Person as defined in the 2012 Edition of the Australasian
Code for the Reporting of Exploration Results, Mineral Resources, and Ore Reserves (JORC Code). Mr
Hoban consents to the disclosure of information in this report in the form and context in which it appears.
The information in this announcement that relates to Arrowsmith North Ore Reserves is based on information
compiled by Mr Quinton de Klerk, who is employed by Cube Consulting. Mr de Klerk is a fellow of the
Australasian Institute of Mining and Metallurgy and has sufficient experience which is relevant to the activity
he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code). Mr de Klerk
consents to the inclusion in the report of the matters based on his information in the form and context in which
it appears.
SUSTAINABILITY REPORT
VRX Silica Limited
27
VRX Silica FY24 Sustainability Report
Acknowledgement of Country
VRX acknowledges the indigenous communities throughout Australia as the Traditional Owners of ground
upon which our projects lie. The Company recognises the unique cultural heritage of First Nations people
and their continued connection to lands, waters and communities. VRX pays its respects to all First Nations
people, and to Elders past, present and emerging.
About VRX
VRX Silica Limited1 (ASX: VRX) is a developer and imminent producer of high-quality silica sand with a focus
on exporting the commodity to meet rising demand in the Asia Pacific region. The Company is based in Perth,
Western Australia, and is advancing the development of four silica sand projects located across the state.
VRX’s total silica sand Joint Ore Reserve Committee (“JORC”) compliant mineral resource stands at 1.4
billion tonnes and range in grade from 96% to 99% silicon dioxide (SiO2), with low iron impurities. VRX’s
projects also have total probable ore reserves of 261 Mt, ranging in grade from 99.6% to 99.9% SiO2. 2
1 In this report, the terms “VRX” and “the Company” refer to VRX Silica Limited.
2 Refer to VRX 2024 Annual Report for references to ASX releases and commentary on material assumptions
underpinning these results.
SUSTAINABILITY REPORT
VRX Silica Limited
28
Corporate Strategy
VRX is positioning itself as a global producer and exporter of premium-quality silica sand. The company has
secured five silica sand projects in Western Australia, characterised by large-scale and high-grade deposits
with low impurities. Four of these projects have already received long-term mining leases, and two are in
advanced stages of development. Each of these projects holds the potential for considerable mineral
reserves and is strategically located near established road and rail networks that connect to major export
ports. Additionally, they have access to existing or easily accessible infrastructure, including logistics, power
and water resources.
Given the significant quantity of high-quality silica sand and the proximity to energy infrastructure at these
sites, VRX is considering the development of glass manufacturing facilities. The company sees a unique
opportunity for Western Australia to leverage its natural advantages in silica sand supply and position itself
as a hub for ultra-clear glass production.
Arrowsmith North silica sand project, Western Australia
VRX was granted 100%-owned Arrowsmith North Mining Lease in November 2020. The site is located in the
Geraldton Sandplain bioregion approximately 270 km north of Perth. It holds an estimated 771 Mt total of
Indicated and Inferred Mineral Resources at 98.0% SiO2 readily amenable to upgrading by conventional
washing and screening to be suitable for industries such as glass making and foundry sand. Arrowsmith
North is considered a world class deposit and estimated to hold 25 years’ worth of production with potential
for a 100+ year mine life.
Arrowsmith Central silica sand project, Western Australia
VRX was granted a 100%-owned Arrowsmith Central Mining Lease in November 2020. As with the
Arrowsmith North project the site is located in the Geraldton Sandplain bioregion approximately 270 km north
of Perth. It holds an estimated 76.5 Mt total of Indicated and Inferred Mineral Resources at 96.8% SiO₂ readily
amenable to upgrading by conventional washing and screening to be suitable for industries such as glass
making and foundry sand. Arrowsmith Central is considered a world class deposit and estimated to hold 75
years’ worth of production.
Arrowsmith Brand silica sand project, Western Australia
VRX was granted a 100%-owned Arrowsmith Brand Mining Lease in July 2023 following an extension of its
known JORC 2012 compliant Resources at the Arrowsmith area with a new Resource Estimate at its new
Arrowsmith Brand Silica Sand Project, located 260km north of Perth. The new Resource is contiguous and
south of Arrowsmith North and bounded to the south by the Brand Highway road reserve.
The combined Resources at Arrowsmith now provide a future pipeline of additional production utilising some
of the infrastructure to be developed at Arrowsmith North.
Muchea silica sand project, Western Australia
VRX’s 100%-owned Muchea Mining Lease is located 50 km north of Perth and is estimated to hold a 208 Mt
total of Indicated and Inferred Mineral Resources at 99.6% SiO2. Muchea’s sand grain size and quality is
suitable for the ultra-clear glass market much in demand for use in solar panels.
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Boyatup silica sand project, Western Australia
VRX acquired its 100%-owned Boyatup exploration licence in early 2019. Located 100 km east of Esperance,
this 124 km2 exploration site has the potential to produce silica sand for export that is subtly different from its
three other projects. The project holds an estimated 60 Mt of Inferred Mineral Resource at 97.8% SiO2.
Latest Developments at VRX
Over the past year, VRX has made substantial strides, particularly in environmental approvals and
sustainability initiatives. Key achievements include:
•
A Response to Submissions lodged in October 2023 for the Arrowsmith North Environmental
Approval
•
Geothermal Exploration Permits granted at Arrowsmith North and Arrowsmith Central to develop
geothermal resources.
•
Fabrication of a modified Vegetation Direct Transfer front-end loader bucket
Future Focus
VRX is planning a staggered and disciplined development timetable across its multiple projects beginning
with Arrowsmith North, followed by Muchea, Arrowsmith Central and Boyatup. Permitting is well advanced
with environmental approvals, native title agreements, offtake agreements, process circuit design,
engineering and other development activities underway.
Stakeholders and Materiality
VRX is committed to maintaining open and transparent communication with its stakeholders, ensuring early
and timely engagement. The Company understands that this approach is important for building a strong
reputation and positively influencing how it is perceived by investors, indigenous communities and other
stakeholders. The key stakeholder groups, interests and communication channels are presented below.
Stakeholder
Key Interests and Concerns
Engagement methods
Investors and shareholders
Financial performance,
management of financial and
non-financial risks, and
sustainability reporting
ASX releases, Half Year and Full
Year results presentations and
webcasts, Annual General Meeting,
Annual Report including the
Sustainability Report, regular
meetings and social media
channels
Government and regulators
Environmental and safety
compliance
Reports and meetings
Supplier and contractors
Supply chain management,
financial reliability and
sustainable sourcing
Supplier screening, tender contract
documents, meetings and
contractor engagement
First Nation people and
local communities
Local economic development,
heritage conservation, land
management and
rehabilitation
Project specific community
engagement plans, local media,
social media channels, employment
opportunities, community
investment projects, sponsorships
and donations
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Stakeholder
Key Interests and Concerns
Engagement methods
Employees
Working conditions, benefits,
professional development
opportunities and
occupational health and
safety
Team meetings and training
sessions
NGOs
Potential environmental and
social impacts associated
with operations
Invitations for participation in
meetings and community events
Customers
Reliability, quality, cost and
delivery
Meetings and social media
channels
As VRX continues to progress in its development, understanding the most material issues impacting the
Company and its stakeholders becomes increasingly important. Material topics are those that reflect VRX’s
economic, environmental and social (“ESG”) impacts and can substantially influence stakeholder decisions.
In this report, VRX addresses the material matters that enable ongoing assessment of its sustainability
performance. These topics include both ESG risks and opportunities that have potentially significant negative
or positive impacts on VRX’s business and stakeholders.
VRX senior management conducted a materiality assessment workshop to identify and prioritise the ESG
topics. A list of material ESG topics was developed alongside a materiality matrix to show the most important
issues that VRX will prioritise in its sustainability journey. Focus areas include sustainable products,
rehabilitation, health, safety, and wellbeing, endangered species, emissions, greenhouse gases and
business ethics. This process and the listing of material issues have informed its strategic thinking on ESG
priorities and dictated the structure and content of this report. As VRX’s Arrowsmith North silica sand project
has made major advances in the environmental approvals process, the materiality of ESG topics will likely
change next year as the project matures.
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ESG Pillar
ESG Topic
Environment
•
Rehabilitation
•
Emissions and GHGs
•
Water management
•
Endangered species, flora and fauna
•
Waste
•
Feral animal control
Social
•
Health and safety, wellbeing
•
Economic performance
•
Indigenous engagement & training
•
Local employment
•
Employment practices
•
Local businesses
•
Contractor engagement
•
Diversity
•
Supporting community organisations
•
Employee development & training
Governance
•
Customer risk & production quality
•
Business ethics
•
Sustainable products
•
Supply chain management
•
Infrastructure
•
Innovation and technical improvements
Sustainability at VRX
Sustainability is at the core of VRX's strategy, driving its commitment to responsible development and long-
term environmental stewardship.
High-quality silica sand – an essential material for a low carbon future
As the world confronts the growing challenges of climate change, the transition to a low-carbon economy
becomes increasingly important. Ensuring a stable supply of essential raw materials for renewable energy
infrastructure is critical as this shift accelerates. Solar energy technology, one of the fastest-growing
renewable energy sources, plays a pivotal role in this shift. Among all low-carbon technologies, the expanded
development of solar photovoltaic (PV) systems could contribute to a 21% reduction in carbon emissions by
20503. Renewables are set to contribute 80% of new power capacity to 2030, with solar PV alone accounting
for more than half4.
The quality of materials used in renewable energy technologies are of paramount importance in the fast-
paced energy transition. High-purity silica sand is essential to solar energy development due to its optimal
thermal expansion properties, excellent photoconductivity, durability and low toxicity. These unique qualities
make premium silica sand ideal for manufacturing ultra-clear solar panels. Leveraging this world-class
resource not only contributes to mitigating climate change but also supports job creation and economic
growth.
3 Future of Solar Photovoltaic - International Renewable Energy Agency (IRENA)
https://irena.org/-/media/Files/IRENA/Agency/Publication/2019/Nov/IRENA_Future_of_Solar_PV_2019.pdf
4 World Energy Outlook 2023 – International Energy Agency.
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VRX’s contribution to low carbon economy
VRX is establishing itself as a key player in the high-quality silica sand market, a critical resource for
supporting global decarbonisation efforts. While VRX will supply silica sand for various applications, a focus
is contributing to a net-zero future by serving the ultra-clear glass market for solar panel production. VRX’s
Muchea silica sand project is strategically positioned to capitalise on these premium silica sand resources.
VRX’s Arrowsmith North and Muchea silica sand projects were included in the Australian Critical Minerals
Prospectus 20225.
Glass manufacturing requires substantial energy inputs which contributes to rising global emissions. VRX is
exploring the potential of utilising renewable energy in glass-manufacturing. In November 2023, VRX entered
into a Farm-In and Joint Venture Agreement with Hydro X Gen Pty Ltd for the Company’s granted Geothermal
Exploration Permit at Dandaragan, Western Australia. Geothermal energy is a promising renewable energy
source, offering consistent and reliable base-load power generation. This capability makes it an excellent
complement to variable renewable sources such as wind and solar, which can fluctuate depending on
weather conditions. By integrating geothermal energy, VRX could ensure a steady supply of renewable
energy and reducing reliance on fossil fuels.
VRX has teamed up with the School of Photovoltaic and Renewable Energy Engineering at UNSW for a
strategic research project. This collaboration will explore the feasibility of a local, low-carbon recycling
program for solar panel glass in Australia. The project will perform a techno-economic analysis of a proposed
closed-loop photovoltaic glass industry, built on recycling the glass component of solar panels once they
reach their end-of-life cycles. This study would help recover valuable resources and minimise the
environmental impact of disposal of solar panel, aligning with the principles of circular economy.
VRX also has a non-binding memorandum of understanding (“MOU”) with Xodus Group Pty Ltd to explore
the future supply of renewable hydrogen to the Company’s silica sand projects and potential, nearby glass
manufacturing facilities.
VRX's commitment to low-carbon operations and high ESG standards reduces risk, enhances resilience and
drives long-term value for stakeholders.
5 Full document is available at: https://www.globalaustralia.gov.au/industries/net-zero/critical-minerals/prospectus-2022
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Responsible Sand Exploration, Mining and Production
Investment capital is increasingly flowing towards businesses that prioritise social and environmental
responsibility. This shift has altered the operational landscape, making climate-related risks, biodiversity
protection and social impacts more critical than ever. VRX’s Muchea and Arrowsmith North projects were
included in the 2023 critical minerals prospectus as an advanced critical mineral project. This positions VRX
to meet the growing demand for responsibly sourced silica sand, which is essential for the renewable energy
sector and other key industries.
An aerial view render of the proposed Arrowsmith North processing plant and facilities
Environmental Pillar
As VRX advances its silica sand projects, the Company is committed to embedding environmental
sustainability into its operations.
Environmental protection through low impact mining
In VRX’s commitment to sustainable resource management, the project sites have been chosen to minimise
impact on native vegetation, landforms and fauna. Sand mining will leave an undulating landform with
vegetation and habitat lower than originally encountered but largely intact. The processing of silica sand will
rely solely on recycled water and a minimal use of non-toxic chemicals. With a resource that is relatively
consistent in its attributes and potentially available for up to 100 years, VRX is dedicated to adopting low-
impact, sustainable mining practices that effectively reduce the environmental footprint of its operations. An
illustrative process flow diagram is shown below.
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Low impact mining to minimise environmental impact
Rehabilitation
VRX recognises that rehabilitation is essential in the lifecycle of a mine. The Company is dedicated to
restoring pre-mining conditions as closely as possible to ensure the long-term sustainability of its sites. For
the Arrowsmith North silica sand project, VRX has developed a Rehabilitation Strategy that outlines key
objectives, activities, and methodologies across various stages. This approach supports effective restoration
and environmental stewardship throughout the project's lifecycle.
This rehabilitation strategy will form a key component for planning mine closure in accordance with the Mine
Closure Plan Guidance by the Department of Mines Industry Regulation and Safety.
VRX has introduced a method Vegetation Direct Transfer (“VDT”) to rehabilitate disturbed areas and minimise
the impact on native vegetation at its mining sites. This technique employs a modified front-end loader to
carefully lift and remove a 400-mm deep, 3 x 3m square sod from areas designated for silica sand mining
and transplant it to mined locations. By preserving the shallow root structures and retaining near-surface
humus and its microbial content, VDT helps maintain the native flora and invertebrate fauna remain largely
intact. This approach supports rapid and extensive recovery of affected areas as mining progresses.
Furthermore, VRX’s commitment to low-impact mining is demonstrated by the use of minimal non-toxic
chemicals and the production of minimal dust during operations. In FY24, the Company commissioned
fabrication of a modified front-end loader bucket that can be hitched to a Cat 980 loader. This will allow VRX
Planning
Mine
preparation
Mining and
processing
Rehabilitation
preparation
Revegetation
Monitoring
and corrective
actions
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to test alternative approaches to height of mulching prior to VDT and different depths of excavation,
supporting best possible rehabilitation outcome.
VRX will undertake mining in block sections (typically 150 x 150 m) with an estimated five blocks mined per
year. VRX will be deploying innovative measures to ensure that any vegetation removed during its mining
activities can be used for continuous rehabilitation. A video of the VDT method is available at:
vrxsilica.com.au/miningandrehabilitationmethodology.
Advantages of VDT
Rootstock is mostly preserved allowing re-
sprouting species survival
Most plant species have roots in the upper soil
layer of 0 to 30cm
Seed bank retained
Soil structure maintained
Soil microbiology preserved
Surface stability achieved
Soil compaction reduced
Modified front-end loader bucket for VDT mining method
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Priority, threatened and endangered species (flora and fauna)
Preserving biodiversity and safeguarding native fauna are key focuses for VRX. To support these goals, VRX
has performed an extensive review of technical reports, relevant databases and spatial data to identify the
flora and vegetation that may be present at each project site.
VRX will manage the application of the mitigation hierarchy in the proposal design, construction, operations
and closure. Specific, measurable, achievable, realistic and time-bound actions will be undertaken to
minimise and mitigate environmental impacts. Where significant residual impacts remain, propose an
appropriate offsets package that is consistent with the WA Environmental Offsets Policy and Guidelines and
the EPBC Act Environmental Offsets Policy.
Arrowsmith North
Environmental Review Document:
•
Flora and vegetation assessment
•
Dieback assessment
•
Fauna assessment
•
Short range endemic invertebrate surveys
•
Offset strategy
•
Greenhouse gas emissions assessment
•
Air emissions desktop assessment
•
Water assessment
•
Respirable silica analysis
•
Radiation activity analysis
Arrowsmith Central
Environmental Scoping Document:
•
Flora and fauna studies
•
Dieback assessment
•
Short range endemic invertebrate surveys
•
Carbon life cycle analysis for estimated
greenhouse gas emissions
•
Respirable silica analysis
•
Radiation activity analysis
Muchea
•
Springtime flora and vegetation study
•
Respirable silica analysis
Boyatup
•
Flora and fauna desktop studies
Key ecological studies completed
Arrowsmith Brand
•
Flora and fauna desktop studies
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To protect endangered or threatened species, the Company will perform surveys of proposed project areas.
These assessments will evaluate both direct and indirect impacts on these species during the construction
and operational phases. Additionally, VRX plans to develop a ranger program to manage feral animal
populations across its project sites. Through these efforts, the Company aims to protect terrestrial fauna and
preserve both biological diversity and ecological integrity.
Vegetation at Muchea
Environmental permitting
Environmental studies and assessments for the silica sand projects were undertaken in accordance with the
requirements of the State and Federal environmental regulations. VRX assessed key environmental factors
relevant to the proposed Arrowsmith North silica sand project, including flora and vegetation, terrestrial fauna,
inland waters, social surroundings, greenhouse gas emissions and air quality. Potential impacts, mitigation,
residual impacts, outcomes and offsets for each of the relevant key environmental factors were presented in
the Environmental Review Document (ERD. It also includes a comprehensive summary of project
environmental setting, physical elements of the mine and infrastructure, operational elements, extent of
environmental impacts, environmental management plan and the proposed rehabilitation and closure plan.
Full ERD for the Arrowsmith North silica sand project is available at the EPA website and VRX website6.
Regarding the latest approval status of the proposed Arrowsmith North silica sand project, the Environmental
Review Document (“ERD”) was accepted by the Department of Water and environmental Regulation
(“DWER”) for a four-week Public Environmental Review period in June 2023.
6 Full ERD and relevant studies are available at: https://vrxsilica.com.au/arrowsmith-north-erd-documents/
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In September 2023, DWER provided VRX with a summary of the public submissions received during that
period. VRX subsequently lodged the Response to Submissions (RtS) in October 2023. In April 2024, the
Company received formal comments on the RtS from the Environmental Protection Authority of Western
Australia (“EPA”) and the Commonwealth Department of Climate Change, Energy, the Environment and
Water (“DCCEEW”). Subject to review and acceptable of the updated RtS by the EPA.
Arrowsmith Central is the second of the Company’s silica sand projects under development. This year, the
Arrowsmith Central silica sand project has moved to the next stage of the environmental approval process
with the EPA. In June 2022, the Company lodged an Environmental Scoping Document7 (“ESD”) which
details the environmental studies required to inform the assessment of the project. The ESD is currently
under assessment and pending feedback from the EPA.
Development of Muchea will follow development at Arrowsmith North. Springtime flora and vegetation studies
report was finalised in early 2023 which will form the basis of the EPA Proposal Referral for the Muchea silica
sand project.
Greenhouse gas emissions
VRX aims to reduce its GHG emissions at future mine sites. A
Greenhouse Gas Emissions Assessment8 was prepared for the
Arrowsmith North silica sand project. The assessment showed that
during Arrowsmith’s 30-year lifespan – assuming it will produce 1 million
tonnes of silica per annum (“Mtpa”) for the first three years rising to 2
Mtpa thereafter – the project will generate a total 583,330 tonnes of
carbon dioxide equivalent (“tCO2-e”) of Scope 1 GHG emissions,
equating to an average of 19,444 tonnes annually. Estimated Scope 3
GHG emissions total 1,723,929 tCO2-e, predominately from shipping its
product to Asia, equates to an average of 46,900 tonnes annually. No
Scope 2 GHG emissions are anticipated from the consumption of grid-
sourced electricity.
The project's main sources of Scope 1 GHG emissions will be electricity and diesel used to power the plant
and machinery. Initially, electricity will be generated on-site via a gas-fired power station in collaboration with
local LNG suppliers. To further reduce emissions, VRX is exploring the option of a hybrid power solution
combining gas, solar, wind and short-term battery storage. In FY24, VRX has been granted for Geothermal
Exploration Permits at Arrowsmith North and Arrowsmith Central to develop geothermal resources. VRX has
signed an MOU with Resource WA to investigate the use of gas to power generators at the Beharra Spring
gas wellhead with an estimated 20% reduction of GHG emissions. The Company is also investigating the
potential for solar hybrid power supply. These efforts underscore the Company’s dedication to utilising
renewable energy and lowering carbon emissions across VRX’s projects.
7 Documentation provided to the WA EPA on our Arrowsmith Central silica sand project is available at:
https://www.epa.wa.gov.au/proposals/arrowsmith-central-silica-sand-project
8 Full assessment document is available at: https://vrxsilica.com.au/arrowsmith-north-erd-documents/
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Social pillar
VRX is committed to fostering positive social impact by building strong stakeholder relationships and
supporting local communities through employment and contracting opportunities.
Health and safety, wellbeing
At VRX, the health, safety and wellbeing of all personnel are paramount, with the Company's Health, Safety
& Wellbeing Policy guiding its commitment to maintaining a secure and supportive work environment. The
Company will ensure adequate training for all personnel to operate in a safe and efficient manner. In FY24,
a Health ad Safety Plan is developed for addressing potential health and safety risks and complying with
regulatory standards to maintain a safe working environment. A Materiality Safety Data Sheet is drafted for
the production and handling of silica sand products.
A Hazard and Operability Study was conducted to identify operational issues that may be a risk to personnel
or equipment at the Arrowsmith North processing plant. Identification of potential hazards related to design,
constructability, installation, maintenance, etc. were also undertaken. The results of the study and hazard
identification will be incorporated into a Health and Safety Management Plan.
The Company has had no reportable incidents or accidents to date including in the last year.
Employees
Number / Rate9
Number of fatalities from work related injury
0
Total Lost time injuries frequency rate
0
Total recordable injuries
0
Total recordable injuries frequency rate
0
Indigenous relations
VRX respects the connection indigenous communities have with their lands and waters. The Company is
committed to engagement with these communities and their representatives, ensuring they are updated on
VRX’s developments and actively involved in the planning stages. VRX’s Indigenous Community Policy
formalises its commitment to uphold and respect human rights of indigenous communities. As part of VRX’s
commitment to local and indigenous employment, VRX anticipates offering employment and contract
opportunities to local indigenous communities in the vicinity of its projects and to support the ranger programs
associated with its project areas.
Aboriginal heritage
VRX is dedicated to understanding and respecting the Aboriginal heritage values of the lands on which it
operates. To date, VRX has undertaken several comprehensive archaeological and ethnographic heritage
surveys at its operations in accordance with requirements set out in Western Australia’s Environmental
Protection Act 1986 and Aboriginal Heritage Act 1972. This approach minimises impact and disruption to the
heritage values of the land during operations.
9 Rate calculation is per 1,000,000 hours of work.
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Aboriginal heritage and ethnographic surveys10 have been completed at Arrowsmith North and Arrowsmith
Central Silica Sand Projects with representatives of the Yamatji Southern Regional Corporation (“YSRC”)
and a national heritage management firm. The survey findings confirmed that all proposed long-term mining
and associated infrastructure areas are clear for the upcoming mining works. These areas include 30 years
of mining at the 360ha Arrowsmith North mine disturbance envelope and 20 years of mining at the 485ha
Arrowsmith Central mine disturbance envelope.
VRX had previously undertaken an Aboriginal Ethnographic and Archaeological Heritage survey in 2019 for
the Muchea silica sand project. This year, VRX conducted an Aboriginal Ethnographic and Archaeological
Heritage Survey and Aboriginal Heritage Work Survey over a priority area to identify and understand any
areas of cultural heritage value. The survey results have shown that no archaeological heritage sites were
identified.
Economic performance
Economic performance underpins VRX’s sustainability efforts, ensuring that financial stability enables
ongoing investment in environmental initiatives social responsibility and long-term value creation. Our
contributions through goods and services supplier purchases, wages, taxes, royalties and state and shire
rent not only drive our business success but also support the broader economic health of the communities in
which we operate.
10 Documents available at: https://vrxsilica.com.au/arrowsmith-north-erd-documents/
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FY24 contribution
Goods and service supplier purchases
$4,046,969
Wages
$1,330,970
Taxes
$51,783
Royalties
Nil
State and Shire Rent
$536,731
Corporate governance
VRX’s Corporate Code of Conduct serves as a guiding framework for ethical decision-making and actions
within the Company. It reinforces our commitment to integrity, fairness and responsibility in all business
dealings, emphasising our duty of care towards employees, clients and stakeholders. The Code outlines the
principles of appropriate behaviour across various situations, establishing clear expectations for the conduct
of all employees.
The Corporate Governance Statement sets out the Company’s main corporate governance policies and
practices. All VRX policies and practices are reported against the 4th Edition of the ASX Corporate
Governance Council’s Corporate Governance Principles and Recommendations.
Summary of policies and responsibilities:
Pillar
Policies
Board/Committee
Executive/Manager
responsible
Environmental
Environmental Policy
Board
Managing Director
Social
Diversity Policy
Board
Managing Director
Indigenous Community Policy
Board
Managing Director
Health and Wellbeing Policy
Board
Company Secretary
Governance
Corporate Code of Conduct
Board
Chairman
Shareholder Communication
S
Board
Managing Director
Trading Policy
Board
Company Secretary
Disclosure Policy
Board
Managing Director
Whistleblower Policy
Board
Company Secretary
Anti-bribery and Anti-corruption
Policy
Board
Chairman
There has been no breach of regulations or compliance by VRX during FY24.
Risk management
At VRX, risk management is overseen directly by the Board of Directors, as the Company’s size and
resources do not allow for a separately constituted Audit and Risk Committee. VRX’s risk management
practices align with the 4th Edition of the ASX Corporate Governance Council’s Corporate Governance
Principles and Recommendations. The Board monitors the company's risk management systems, practices,
and procedures to maintain effective risk identification and management, along with compliance with internal
guidelines and external requirements. More information is available in the Corporate Governance Plan on
the VRX website. Other statutory and fiduciary responsibilities include:
•
Compliance with all applicable laws, regulations and company policy.
•
The effectiveness and adequacy of internal control processes.
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•
Identification and management of business, economic, environmental and social sustainability risks
•
Review of the Company’s risk management framework at least annually to satisfy itself that it
continues to be sound and to determine whether there have been any changes in the material
business risks the Company faces and to ensure that they remain within the risk appetite set by the
Board.
•
Review reports by management on the efficiency and effectiveness of the Company’s risk
management framework and associated internal compliance and control procedures.
The Company’s process of risk management and internal compliance and control includes:
Anti-bribery and corruption
Corrupt conduct involves the misuse of power or position for personal gain, disadvantaging others in the
process. This can manifest in various forms such as official misconduct, bribery, blackmail, unauthorised use
of confidential information, fraud, and theft. VRX’s Anti-Bribery and Anti-Corruption Policy strictly prohibits
any form of corrupt conduct. Employees involved in such activities will face disciplinary actions, including
potential dismissal. The Company is committed to maintaining the highest standards of business ethics and
provides comprehensive training for all staff and contractors to uphold these standards.
•
Identify and measure risks that might
impact upon the achievement of the
Company’s goals and objectives.
•
Monitor the environment for emerging
factors and trends that affect these
risks.
Monitor the performance of, and improve
the effectiveness of, risk management
systems and internal compliance and
controls, including regular assessment
of the effectiveness of risk management
and internal compliance and control.
•
Formulate
risk
management
strategies to manage identified risks
•
Design and implement appropriate
risk
management
policies
and
internal controls.
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Whistleblower policy
VRX’s Whistleblower Policy applies to all entities within the Company. It allows all employees, directors,
contractors, suppliers, associates, consultants the ability to raise concerns regarding any misconduct or
unlawful, unethical or irresponsible behaviour without being subject to victimisation, harassment or
discriminatory treatment. This policy is reviewed every two years to ensure it remains consistent with all
relevant legislative requirements, as well as the changing nature of the organisation.
Customer risk & production quality
The Company is cognisant that the quality of the products
will determine the selling price and future contracts. The
Company’s approach is to provide a better quality product
than
the
specification
requires
for
sales
without
compromising yield and operating costs. This will avoid
quality disputes, compromised contracts and general
branding in the industry.
The Company will also undertake adequate metallurgical test
work to ensure that the process circuit design will provide the
quality of product that the customer requires.
VRX supply chain
VRX engages a variety or suppliers and contractors (as both businesses and individuals) to provide various
services at its operations, exploration projects and offices. A breakdown of this is outlined below.
Exploration
• Drilling contractors
• Environmental
consultants
Development
• Metallurgical
• Process design
• Design engineering
Corporate & Admin
• Auditors
• Legal
• IT and
Communications
• Logisitics
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Reporting Frameworks
The VRX Sustainability Report annually captures and reports publicly on the Company’s economic,
environmental and social impacts, and hence its contributions, both positive and negative, towards the goal
of sustainable development. It covers all projects owned and operated by VRX and all monetary values in
this Report are in Australian dollars ($AUD).
VRX has also adopted a ‘think global, act local’ approach to selecting frameworks against which to inform its
sustainability planning and performance measurement. VRX commits to regularly updating stakeholders on
its ESG performance to ensure the Company remains a responsible investment opportunity.
Whilst VRX are in project development phase, VRX have chosen to benchmark its performance against the
recommendations of the following two organisations.
United Nations: Sustainable Development Goals (“SDGs”)
The SDGs promote action in areas that are critical to ending poverty, protecting the environment and
improving the prosperity of all people through economic, social and technological progress. The goals are
relevant for all countries and sectors of society, including business, and will enable VRX to tailor its approach
to best serve the Company’s stakeholders.
Below are the actions that VRX’s Board and Leadership Team are taking to make a positive contribution to
the 17 SDGs and the way in which we plan to measure the meaningful progress being made towards them.
VRX is aligning its activities with seven SDGs
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45
World Economic Forum (“WEF”): Stakeholder Capitalism Framework
In partnership with global accounting firms, the WEF has identified a set of global, cross-industry baseline
disclosures and metrics for companies to use to analyse their ESG performance and regularly communicate
this to their stakeholders.
Disclosures are drawn from existing voluntary standards including the Global Reporting Initiative, the
Sustainability Accounting Standards Board and the Financial Stability Board’s Task Force on Climate-Related
Financial Disclosures. They are grouped under four pillars that are considered the most critical for business,
society and the planet. The WEF framework is a logical and appropriate starting point for VRX as we begin
its ESG journey.
The adoption of the WEF framework has already highlighted a number of ESG opportunities across the
Company’s operations, including the integration of solar panels and battery storage capacity into power
generation and our purpose-built VDT method to rapidly and continuously regenerate vegetation that is
disturbed during our operations (see below). These two initiatives reflect VRX’s commitment to reducing its
environmental footprint and building sustainable outcomes for its stakeholders.
VRX’s performance against the framework in FY24 can be found in the Appendix at the end of this report.
SUSTAINABILITY REPORT
VRX Silica Limited
46
Appendix: World Economic Forum – Stakeholder Capitalism Index
WEF key data/question
Current status
Status
The company’s stated purpose, as the expression of
the means by which a business proposes solutions
to economic, environmental and social issues.
Corporate purpose should create value for all
stakeholders, including shareholders.
VRX’s ESG commitment is to create a
sustainable, low-impact environmental
legacy and positive benefits for its
communities.
Disclosed
Composition of the highest governance body and its
committees by: competencies relating to economic,
environmental and social topics; executive or non-
executive; independence; tenure on the governance
body; number of each individual’s other significant
positions and commitments, and the nature of the
commitments; gender; membership of under-
represented social groups; stakeholder
representation.
Partial. See diversity section of the VRX
Corporate Governance Statement. The
Company has established a Diversity
Policy but because of its size and limited
resources, positions are selected on the
best available candidate.
Outstanding disclosures: competencies
relating to economic, environmental and
social topics; membership of under-
represented social groups; stakeholder
representation.
When
construction
begins
A list of the topics that are material to key
stakeholders and the company, how the topics were
identified and how the stakeholders were engaged.
Disclosed in the Sustainability at VRX
section of this Sustainability Report.
Disclosed
Total percentage of governance body members,
employees and business partners who have
received training on the organization’s anti-
corruption policies and procedures, broken down by
region. a) Total number and nature of incidents of
corruption confirmed during the current year, but
related to previous years; and b) Total number and
nature of incidents of corruption.
Employees are required to sign the Code
of Conduct. VRX has not had any
incidents of corruption in the past year or
in any previous years.
Disclosed
Discussion of initiatives and stakeholder
engagement to improve the broader operating
environment and culture, in order to combat
corruption.
Employees are required to sign the Code
of Conduct. Operating in Australian
jurisdiction there is a low risk of
corruption.
Disclosed
A description of internal and external mechanisms
for seeking advice about ethical and lawful
behaviour and organizational integrity.
VRX’s Anti-Bribery and Anti-Corruption
policy has guidance on behaviour in
Section 10 of the Corporate Governance
Plan. VRX’s whistleblower policy allows
all employees, directors, contractors,
suppliers, associates, consultants the
ability to raise concerns regarding any
misconduct or unlawful, unethical or
irresponsible behaviour without being
subject to victimisation, harassment or
discriminatory treatment. As a reasonably
small business, all VRX managers and
board members are available to
employees and contractors to discuss
any ethical concerns.
Disclosed
A description of internal and external mechanisms
for reporting concerns about unethical or unlawful
behaviour and lack of organizational integrity.
VRX’s Whistleblower Policy allows all
employees, directors, contractors,
suppliers, associates, consultants the
ability to raise concerns regarding any
misconduct or unlawful, unethical or
irresponsible behaviour without being
subject to victimisation, harassment or
discriminatory treatment. As a reasonably
small business, all VRX managers and
board members are available to
employees and contractors to discuss
any ethical concerns.
Disclosed
SUSTAINABILITY REPORT
VRX Silica Limited
47
A description of principal material risks and
opportunities facing the company specifically (as
opposed to generic sector risks)
Material risks and opportunities are
outlined in the FY24 VRX Annual Report.
Disclosed
A description of the company appetite in respect of
these risks, how these risks and opportunities have
moved over time and the response to those
changes.
Risks are outlined in the FY24 VRX
Annual Report.
Disclosed
For all relevant greenhouse gases (e.g. carbon
dioxide, methane, nitrous oxide, F-gases etc.), report
in tCO2e GHG Protocol Scope 1 and Scope 2
emissions.
Emissions are immaterial to VRX until
development and construction begins.
VRX has forecasted its emissions in the
Greenhouse Gas Emissions section of
this Sustainability Report.
Forecast
disclosed
Fully implement the recommendations of the TCFD.
If necessary, disclose a timeline of at most three
years for full implementation.
Emissions are immaterial to VRX until
development and construction begins.
Outstanding disclosures: Implementation
or roadmap towards the
recommendations of the TCFD.
FY27
Report the number and area (in hectares) of sites
owned, leased or managed in or adjacent to
protected areas and/or key biodiversity areas
(“KBA”).
Muchea project is in an Environmentally
Sensitive Area, the Mining Lease at
Muchea M70/1390, 1,008Ha. No other
projects are considered at a KBA.
Disclosed
Megalitres of water withdrawn, megalitres of water
consumed and the percentage of each in regions
with high or extremely high baseline water stress,
according to WRI Aqueduct water risk atlas tool.
Water usage is immaterial to VRX until
development and construction begins.
When
construction
begins
Percentage of employees per employee category, by
age group, gender and other indicators of diversity
(e.g. ethnicity).
Given the minimal nature of current
employment at VRX, diversity is
immaterial to VRX until development and
construction begins.
When
construction
begins
Ratio of the basic salary and remuneration for each
employee category by significant locations of
operation for priority areas of equality: women to
men, minor to major ethnic groups, and other
relevant equality areas.
Given the minimal nature of current
employment at VRX, salary and
remuneration will not become material
until the hiring phase of development and
construction.
When
construction
begins
Ratios of standard entry level wage by gender
compared to local minimum wage.
Given the minimal nature of current
employment at VRX, salary and
remuneration will not become material
until the hiring phase of development and
construction.
When
construction
begins
Ratio of the annual total compensation of the CEO to
the median of the annual total compensation of all its
employees, except the CEO.
Given the minimal nature of current
employment at VRX, salary and
remuneration will not become material
until the hiring phase of development and
construction.
When
construction
begins
An explanation of the operations and suppliers
considered to have significant risk for incidents of
child labour, forced or compulsory labour.
As VRX is domiciled in and only operates
in Australia, there is a very low risk of
incidents of child labour, forced or
compulsory labour.
Disclosed
The number and rate of fatalities as a result of work-
related injury; high-consequence work-related
injuries (excluding fatalities); recordable work-related
injuries; main types of work-related injury; and the
number of hours worked.
There were zero fatalities, injuries,
incidents or accidents in FY24.
Disclosed
An explanation of how the organisation facilitates
workers’ access to non-occupational medical and
healthcare services, and the scope of access
provided for employees and workers.
VRX does not currently facilitate workers’
access to non-occupational medical and
healthcare services.
Disclosed
Average hours of training per person that the
organisation’s employees have undertaken during
the reporting period, by gender and employee
category (total number of hours of training provided
to employees divided by the number of employees).
Given the minimal nature of current
employment at VRX, training hours will
not become material until the hiring
phase of development and construction.
Disclosed
SUSTAINABILITY REPORT
VRX Silica Limited
48
Average training and development expenditure per
full time employee (total cost of training provided to
employees divided by the number of employees).
Given the minimal nature of current
employment at VRX, training and
development expenditure will not become
material until the hiring phase of
development and construction.
Disclosed
Total number and rate of new employee hires during
the reporting period, by age group, gender, other
indicators of diversity and region.
There was one new employee hired in
FY24.
Disclosed
Total number and rate of employee turnover during
the reporting period, by age group, gender, other
indicators of diversity and region.
There was zero employee turnover in
FY24.
Disclosed
Direct economic value generated and distributed
(“EVG&D”), on an accruals basis, covering the basic
components for the organization’s global operations
Disclosed in Economic Performance
section of this Sustainability Report.
Disclosed
Financial assistance received from the government:
total monetary value of financial assistance received
by the organisation from any government during the
reporting period.
$200,000 of Investment Attraction Fund
received from the government
Disclosed
Total capital expenditures (“CapEx”) minus
depreciation, supported by narrative to describe the
company’s investment strategy.
$91,000 on a VDT modified front end
loader bucket and Trommel
refurbishment. $196,000 on Processing
Plant detailed engineering designs.
Disclosed
Share buybacks plus dividend payments, supported
by narrative to describe the company’s strategy for
returns of capital to shareholders.
Given there was no revenue generate or
dividends paid and there are not likely to
until production begins, a supporting
strategy will not become material until
then.
Disclosed
Total costs related to research and development.
$37,000 on metallurgical test work in
FY24.
Disclosed
The total global tax borne by the company.
Total tax paid was $51,783 (Payroll tax
and FBT).
Disclosed
DIRECTORS REPORT
VRX Silica Limited
49
Your directors present their report on the Company and its controlled entities for the year ended 30 June
2024.
DIRECTORS
The names of the directors of the Company in office during the financial year and up to the date of this report
are as follows:
Paul Boyatzis
Bruce Maluish
Peter Pawlowitsch
David Welch
Directors were in office from the beginning of the financial year until the date of this report unless otherwise
stated.
The particulars of the qualifications, experience and special responsibilities of each director are as follows:
Paul Boyatzis, B Bus, AICD, MSDIA, ASA, CPA – Non-Executive Chairman
Mr Boyatzis has over 30 years’ experience in the investment, corporate and capital markets and an extensive
working knowledge of public companies. He has advised numerous emerging companies on a broad range
of corporate and strategic issues and assisted in raising significant investment capital both locally and
overseas.
Mr Boyatzis is a current member of the Australian Institute of Company Directors, the Securities and
Derivative Industry Association of Australia and a member of CPA Australia.
Director since 24 September 2010.
During the past three years Mr Boyatzis has held the following other listed company directorships:
•
Nexus Minerals Limited – 6 October 2006 to present
•
Aruma Resources Limited – 5 January 2010 to 9 November 2022
Bruce Maluish, BSc (Surv), Dip Met Min – Managing Director
Mr Maluish has more than 30 years’ experience in the mining industry with numerous roles as Managing
Director and General Manager with companies such as the Monarch Group of Companies, Matilda Minerals,
Abelle, Hill 50 and Forsyth Mining, while mining a variety of commodities from gold, nickel and mineral sands
from both open pits and underground.
His management and administrative experience include the set up and marketing of IPOs, from
commencement of exploration to full production, to the identification, development and expansion of projects
including mergers and acquisitions.
His international experience includes identification of projects and negotiations with clients in Asian markets.
His qualifications include credentials in Surveying, Mining, Project Planning and Finance
Director since 24 September 2010.
During the past three years Mr Maluish has held the following other listed company directorships:
•
Nexus Minerals Limited – 1 July 2015 to present
DIRECTORS REPORT
VRX Silica Limited
50
Peter Pawlowitsch, B.Com, MBA, CPA, FGIA – Non-Executive Director
Mr Pawlowitsch holds a Bachelor of Commerce from the University of Western Australia, is a member of the
Certified Practising Accountants of Australia, a fellow of the Governance Institute and holds a Master of
Business Administration from Curtin University.
These qualifications have underpinned more than 15 years’ experience in the accounting profession and
more recently in business management and the evaluation of businesses and mining projects.
Director since 12 February 2010.
During the past three years Mr Pawlowitsch has held the following other listed company directorships:
•
Dubber Corporation Limited – 26 September 2011 to present
•
Knosys Limited – 16 March 2015 to 8 December 2021
•
Novatti Group Limited – 19 June 2015 to present
•
Qoria Limited (formerly Family Zone Cyber Safety Limited) – 24 September 2019 to present
David Welch, B.Com – Non-Executive Director
Mr Welch is an experienced and well credentialed senior executive with a successful track record in the
planning, development and operation of logistics and infrastructure supply chains for commodities markets,
including mining, agriculture and industrial products sectors.
From 2007 to 2017, Mr Welch held senior executive positions within Aurizon Holdings Limited, Australia’s
largest rail freight operator. These positions included VP Iron Ore, VP Market Development and EVP Strategy
and Business Development where he had direct responsibility for strategy, business transformation and
performance, commercial negotiations, stakeholder engagement, major projects, joint venture management,
M&A and business development. He was previously the Managing Director of The Millennium Group from
1998 to 2006 and was a Marketing Manager at CSBP Limited (part of the Wesfarmers conglomerate)
responsible for the management of mining reagent logistics from 1989 to 1994.
Mr Welch holds a Bachelor of Commerce (1st Class Hons) from the University of Western Australia.
Director since 1 September 2021.
During the past three years Mr Welch has held the following other listed company directorship:
•
Brockman Mining Limited – 15 October 2019 to present
Interests in the shares and options of the Company and related bodies corporate
As at the date of this report, the interests of the directors (direct and indirect) in the shares and options of
VRX Silica Limited were:
Paul Boyatzis
-
5,500,000 fully paid ordinary shares
-
160,000 options expiring 31 August 2025, exercisable at 18 cents each
Bruce Maluish
-
14,329,766 fully paid ordinary shares
-
259,616 options expiring 31 August 2025, exercisable at 18 cents each
Peter Pawlowitsch
-
23,841,769 fully paid ordinary shares
David Welch
-
250,000 fully paid ordinary shares
-
125,000 options expiring 31 August 2025, exercisable at 18 cents each
DIRECTORS REPORT
VRX Silica Limited
51
COMPANY SECRETARY
Ian Hobson
Mr Hobson holds a Bachelor of Business degree and is a Chartered Accountant and Chartered Company
Secretary with 35 years’ experience in the profession. Mr Hobson provides company secretary services and
corporate, management and accounting advice to a number of listed public companies.
CORPORATE INFORMATION
Corporate Structure
VRX Silica Limited is a limited liability company that is incorporated and domiciled in Australia. VRX Silica
Limited has prepared a consolidated financial report incorporating the entities that it controlled during the
financial year as follows:
VRX Silica Ltd
-
parent entity
Ventnor Mining Pty Ltd
-
100% owned controlled entity
VRX Boyatup Pty Ltd
-
100% owned controlled entity
VRX Geothermal Pty Ltd
-
100% owned controlled entity
VRX Midwest Pty Ltd
-
100% owned controlled entity
Wisecat Pty Ltd
-
100% owned controlled entity
Nature of Operations and Principal Activities
The principal continuing activities during the year of entities within the consolidated entity was mineral
exploration.
OPERATING AND FINANCIAL REVIEW
Review of Operations
A review of operations for the financial year and the results of those operations is contained within the
company review.
Operating Results
Consolidated loss after income tax for the financial year was $4,264,285 (2023: $5,060,435).
Financial Position
At 30 June 2024, the Group had net assets of $18,071,601 (2023: $17,536,722) with cash reserves of
$2,313,067 (2023: $1,581,811).
Financing and Investing Activities
The Company issued the following securities for cash proceeds during the year:
• 12,500,000 fully paid ordinary shares by placement to investors at an issue price of 12 cents each,
raising $1,500,000 (before costs);
• 10,416,696 fully paid ordinary shares under a share purchase plan at an issue price of 12 cents per
share, to raise $1,250,000 (before costs); and
• 44,877,120 fully paid ordinary shares from a fully underwritten renounceable entitlement offer at an
issue price of 5.5 cents each, raising $2,468,243 (before costs).
Dividends
No dividends were paid during the year and no recommendation is made as to dividends.
DIRECTORS REPORT
VRX Silica Limited
52
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Significant changes in the state of affairs of the Company during the financial year are detailed in the company
review.
In the opinion of the directors, there were no other significant changes in the state of affairs of the Company
that occurred during the financial year under review not otherwise disclosed in this report or in the financial
report.
EVENTS SUBSEQUENT TO BALANCE DATE
Employee and Consultant Options
On 6 August 2024, the Company issued 17,000,000 options exercisable at 5.5 cents each on or before 31
December 2027, to employees and consultants for no consideration.
Expiry of Options
28,800,000 options exercisable at 30 cents each expired on 31 August 2024.
Other than the above, no matters or circumstances have arisen, since the end of the financial year, which
significantly affected, or may significantly affect, the operations of the Company, the results of those
operations, or the state of affairs of the Company in subsequent financial years, other than outlined in the
company review which is contained in this Annual Report.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The Company will continue to pursue its principal activity of exploration and evaluation, particularly in respect
to the projects as more particularly outlined in the company review. The Company will also continue to pursue
other potential investment opportunities to enhance shareholder value.
MEETINGS OF DIRECTORS
The numbers of meetings of directors (including meetings of committees of directors) held during the year
and the number of meetings attended by each director were as follows:
Board of Directors Meetings
Number
Eligible to Attend
Number
Attended
P Boyatzis
4
4
B Maluish
4
4
P Pawlowitsch
4
4
D Welch
4
4
DIRECTORS REPORT
VRX Silica Limited
53
REMUNERATION REPORT (AUDITED)
This report details the nature and amount of remuneration for each director and executive of VRX Silica
Limited. The information provided in the remuneration report includes remuneration disclosures that are
audited as required by section 308(3C) of the Corporations Act 2001.
For the purposes of this report Key Management Personnel of the Group are defined as those persons having
authority and responsibility for planning, directing and controlling the major activities of the group, directly or
indirectly, including any director (whether executive or otherwise) of the parent company.
For the purposes of this report the term “executive” includes those key management personnel who are not
directors of the parent company.
Remuneration Committee
The full Board carries out the role and responsibilities of the Remuneration Committee and is responsible for
determining and reviewing the compensation arrangements for the Directors themselves, the Managing
Director and any Executives.
Executive remuneration is reviewed annually having regard to individual and business performance, relevant
comparative remuneration and internal and independent external advice.
Use of Remuneration Consultants
During the financial year ended 30 June 2024 and 30 June 2023, the consolidated entity did not engage any
remuneration consultants.
The remuneration report is set out under the following main headings:
● Remuneration policy
● Remuneration structure
● Employment contracts of directors and senior executives
● Details of remuneration for year
● Compensation options to key management personnel
● Shares issued to key management personnel on exercise of compensation options
● Additional disclosures relating to key management personnel
A.
Remuneration policy
The board policy is to remunerate directors at market rates for time, commitment and responsibilities. The
board determines payments to the directors and reviews their remuneration annually, based on market
practice, duties and accountability. Independent external advice is sought when required. The maximum
aggregate amount of directors’ fees that can be paid is subject to approval by shareholders in general
meeting, from time to time. Fees for non-executive directors are not linked to the performance of the
consolidated entity. However, to align directors’ interests with shareholders’ interests, the directors are
encouraged to hold shares in the Company.
The Company’s aim is to remunerate at a level that will attract and retain high-calibre directors and
employees. Company officers and directors are remunerated to a level consistent with the size of the
Company.
The executive directors and full-time executives receive a superannuation guarantee contribution required
by the government, which was 11% for the financial year ended 30 June 2024 and increased to 11.5%
effective 1 July 2024, and do not receive any other retirement benefits. Some individuals, however, may
choose to sacrifice part of their salary to increase payments towards superannuation.
All remuneration paid to directors and executives is valued at the cost to the Company and expensed.
DIRECTORS REPORT
VRX Silica Limited
54
The Board believes that it has implemented suitable practices and procedures that are appropriate for an
organisation of this size and maturity.
The Company did not pay any performance-based component of remuneration during the year.
B.
Remuneration structure
In accordance with best practice corporate governance, the structure of non-executive director and executive
compensation is separate and distinct.
Non-executive Director Compensation
Objective
The Board seeks to set aggregate compensation at a level that provides the Company with the ability to
attract and retain directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.
Structure
The Constitution and the ASX Listing Rules specify that the aggregate compensation of non-executive
directors shall be determined from time to time by a general meeting. An amount not exceeding the amount
determined is then divided between the directors as agreed. The latest determination approved by
shareholders was an aggregate compensation of $250,000 per year.
The amount of aggregate compensation sought to be approved by shareholders and the manner in which it
is apportioned amongst directors is reviewed annually. The Board considers advice from external consultants
as well as the fees paid to non-executive directors of comparable companies when undertaking the annual
review process. Non-Executive Directors’ remuneration may include an incentive portion consisting of
options, as considered appropriate by the Board, which may be subject to Shareholder approval in
accordance with ASX listing rules.
Separate from their duties as Directors, the Non-Executive Directors undertake work for the Company directly
related to the evaluation and implementation of various business opportunities, including mineral
exploration/evaluation and new business ventures, for which they receive a daily rate. These payments are
made pursuant to individual agreement with the non-executive Directors and are not taken into account when
determining their aggregate remuneration levels.
Executive Compensation
Objective
The entity aims to reward executives with a level and mix of compensation commensurate with their position
and responsibilities within the entity so as to:
• reward executives for Company and individual performance against targets set by appropriate
benchmarks;
• align the interests of executives with those of shareholders;
• link rewards with the strategic goals and performance of the Company; and
• ensure total compensation is competitive by market standards.
Structure
In determining the level and make-up of executive remuneration, the Board negotiates a remuneration to
reflect the market salary for a position and individual of comparable responsibility and experience. Due to
the limited size of the Company and of its operations and financial affairs, the use of a separate remuneration
committee is not considered appropriate. Remuneration is regularly compared with the external market by
participation in industry salary surveys and during recruitment activities generally. If required, the Board may
engage an external consultant to provide independent advice in the form of a written report detailing market
levels of remuneration for comparable executive roles.
DIRECTORS REPORT
VRX Silica Limited
55
Remuneration consists of a fixed remuneration and a long term incentive portion as considered appropriate.
Compensation may consist of the following key elements:
•
Fixed Compensation;
•
Variable Compensation;
•
Short Term Incentive (STI); and
•
Long Term Incentive (LTI).
Fixed Remuneration
The level of fixed remuneration is set so as to provide a base level of remuneration which is both appropriate
to the position and is competitive in the market. Fixed remuneration is reviewed annually by the Board having
regard to the Company and individual performance, relevant comparable remuneration in the mining
exploration sector and external advice.
The fixed remuneration is a base salary or monthly consulting fee.
Variable Pay — Long Term Incentives
The objective of long-term incentives is to reward directors/executives in a manner which aligns this element
of remuneration with the creation of shareholder wealth. The incentive portion is payable based upon
attainment of objectives related to the director’s/executive’s job responsibilities. The objectives vary, but all
are targeted to relate directly to the Company’s business and financial performance and thus to shareholder
value.
Long term incentives (LTI’s) granted to directors/ executives are delivered in the form of options.
LTI grants to Executives are delivered in the form of employee share options. These options are issued at
an exercise price determined by the Board at the time of issue. The employee share options generally vest
over a selected period.
The objective of the granting of options is to reward Executives in a manner which aligns the element of
remuneration with the creation of shareholder wealth. As such LTI’s are made to Executives who are able
to influence the generation of shareholder wealth and thus have an impact on the Company’s performance.
The level of LTI granted is, in turn, dependent on the Company’s recent share price performance, the seniority
of the Executive, and the responsibilities the Executive assumes in the Company.
Typically, the grant of LTIs occurs at the commencement of employment or in the event that the individual
receives a promotion and, as such, is not subsequently affected by the individual’s performance over time.
C.
Employment contracts of directors and senior executives
Remuneration and other terms of employment for some key management personnel are formalised in service
agreements. Details of these agreements are as follows:
Bruce Maluish
Managing Director
Agreement type:
Employment agreement
Agreement commenced:
22 February 2011
Term of Agreement:
Two years or such later date as agreed with the Board.
Remuneration:
Base annual salary for the financial year of $367,500 (inclusive of statutory
superannuation), reviewed annually. As of 1 June 2024, annual salary has been
reduced by 50%.
Termination notice:
Three months termination notice by either party.
DIRECTORS REPORT
VRX Silica Limited
56
D.
Details of remuneration for year
Directors
The following persons were directors of VRX Silica Limited during the current and previous financial years:
Paul Boyatzis
Chairman (non-executive)
Bruce Maluish
Director (executive)
Peter Pawlowitsch
Director (non-executive)
David Welch
Director (non-executive)
There were no other persons that fulfilled the role of a key management person, other than those disclosed
as Executive Directors.
Remuneration
Details of the remuneration of each Director and named executive officer of the Company, including their
personally-related entities, during the year was as follows:
Director
Year
Short Term
Benefits
Post
Employment
Share Based
Payments
Total
Salary and Fees
Superannuation
Options
$
$
$
$
P Boyatzis
2024
2023
73,600
76,800
-
-
-
47,778
73,600
124,578
B Maluish
2024
2023
325,833
340,000
27,500
27,500
-
66,154
353,333
433,654
P Pawlowitsch
2024
2023
49,212
51,584
5,413
5,416
-
36,753
54,625
93,753
D Welch
2024
2023
54,625
57,000
-
-
-
36,753
54,625
93,753
Total
2024
2023
503,270
525,384
32,913
32,916
-
187,438
536,183
745,738
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Director
Year
Fixed
Remuneration
At risk - STI
At risk - LTI
P Boyatzis
2024
2023
100%
62%
-
-
-
38%
B Maluish
2024
2023
100%
85%
-
-
-
15%
P Pawlowitsch
2024
2023
100%
61%
-
-
-
39%
D Welch
2024
2023
100%
61%
-
-
-
39%
There were no performance related payments made during the year. Performance hurdles are not attached
to remuneration options, however the Board determines appropriate vesting periods to provide rewards over
a period of time to key management personnel.
DIRECTORS REPORT
VRX Silica Limited
57
E.
Compensation options to key management personnel
No options were granted as equity compensation benefits to Directors and Executives during the year.
F.
Shares issued to key management personnel on exercise of compensation options
No shares were issued to Directors and Executives on exercise of compensation options during the year.
G.
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each director and other members of
key management personnel of the consolidated entity, including their personally related parties, is set out
below:
Director
Balance
01/07/23
Received as
Remuneration
Shares Issued
on Exercise of
Options
Acquired
Disposals/
Other
Balance
30/06/24
P Boyatzis
5,180,000
-
-
a) 320,000
-
5,500,000
B Maluish
13,810,535
-
-
a) 519,231
-
14,329,766
P Pawlowitsch
23,841,769
-
-
-
-
23,841,769
D Welch
-
-
-
a) 250,000
-
250,000
Total
42,832,304
-
-
1,089,231
-
43,921,535
a)
Shares subscribed for under the fully underwritten renounceable entitlement offer announced on 2 May 2024.
Option Holding
The number of options over ordinary shares in the Company held during the financial year by each director
and other members of key management personnel of the consolidated entity, including their personally
related parties, is set out below:
Director
Balance
01/07/23
Received as
Remuneration
Options
Exercised
Options
Expired
Other
Balance
30/06/24
P Boyatzis
3,900,000
-
-
-
a) 160,000
4,060,000
B Maluish
5,400,000
-
-
-
a) 259,616
5,659,616
P Pawlowitsch
3,000,000
-
-
-
-
3,000,000
D Welch
3,000,000
-
-
-
a) 125,000
3,125,000
Total
15,300,000
-
-
-
544,616
15,844,616
a)
One free attaching option received for every two shares subscribed for under the fully underwritten renounceable
entitlement offer announced on 2 May 2024.
DIRECTORS REPORT
VRX Silica Limited
58
H.
Other transactions with key management personnel
Transactions between related parties are on normal commercial terms and conditions no more favourable
than those available to other parties unless otherwise stated.
In the prior year, the Company had subleased office space for $15,699 to Aruma Resources Limited, a
company Mr Paul Boyatzis was a director of during the relevant period. There were no transactions with
Aruma Resources Limited during the current year.
During the year, the fully underwritten one for thirteen pro-rata renounceable entitlement offer announced on
2 May 2024 resulted in the issue of 44,877,120 fully paid ordinary shares at $0.055 each to raise $2,468,243
(before costs), together with 22,438,625 free attaching options exercisable at $0.18 each on or before 31
August 2025. The new shares and options were issued on 29 May 2024. The directors subscribed for the
following shares and options within their entitlement:
Mr Paul Boyatzis – 320,000 shares and 160,000 options
Mr Bruce Maluish – 519,231 shares and 259,616 options
Mr David Welch – 250,000 shares and 125,000 options (after acquiring 250,000 entitlement rights on-market).
I.
Voting and comments made at the Company's last Annual General Meeting ('AGM')
At the 2023 AGM, 84.85% of the votes received supported the adoption of the remuneration report for the
year ended 30 June 2023. The Company did not receive any specific feedback at the AGM regarding its
remuneration practices.
J.
Additional information
The earnings of the consolidated entity for the five years to 30 June 2024 are summarised below:
2024
2023
2022
2021
2020
$
$
$
$
$
Revenue
31,512
113,479
56,901
1,356,599
73,665
EBITDA
(4,122,473)
(4,929,047)
(4,938,719)
(1,017,793)
(2,309,541)
EBIT
(4,238,915)
(5,038,001)
(5,023,246)
(1,081,357)
(2,360,768)
Loss after income tax
(4,264,285)
(5,060,435)
(5,033,274)
(1,089,611)
(2,366,217)
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
2024
2023
2022
2021
2020
Share price at financial
year end ($)
0.04
0.13
0.13
0.22
0.09
Total dividends declared
(cents per share)
-
-
-
-
-
Basic loss per share
(cents per share)
(0.73)
(0.90)
(0.91)
(0.23)
(0.55)
[THIS CONCLUDES THE REMUNERATION REPORT, WHICH HAS BEEN AUDITED]
DIRECTORS REPORT
VRX Silica Limited
59
INSURANCE OF OFFICERS
The Company has in place an insurance policy insuring Directors and Officers of the Company against any
liability arising from a claim brought by a third party against the Company or its Directors and officers, and
against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of
their conduct while acting in their capacity as a Director or officer of the Company, other than conduct involving
a wilful breach of duty in relation to the Company.
In accordance with a confidentiality clause under the insurance policy, the amount of the premium paid to the
insurers has not been disclosed. This is permitted under Section 300(9) of the Corporations Act 2001.
INDEMNITY AND INSURANCE OF AUDITOR
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the
auditor of the Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor
of the Company or any related entity.
SHARE OPTIONS
At the date of this report there were the following unissued ordinary shares for which options were
outstanding:
•
10,000,000 options expiring 31 December 2025, exercisable at 20 cents each
•
7,200,000 options expiring 31 December 2026, exercisable at 15 cents each
•
57,584,648 options expiring 31 August 2025, exercisable at 18 cents each
•
17,000,000 options expiring 31 December 2027, exercisable at 5.5 cents each
During the year, options were issued as follows:
•
57,584,648 options exercisable at 18 cents each on or before 31 August 2025
During the year, the following options were exercised:
•
500,000 options expiring 23 October 2023, exercised at 15 cents each using the cashless exercise
facility
During the year, the following options expired:
•
2,000,000 options exercisable at 15 cents each expired on 23 October 2023
Subsequent to year end and up to the date of this report:
•
17,000,000 options exercisable at 5.5 cents each on or before 31 December 2027 were issued to
employees and consultants for no consideration
•
28,800,000 options exercisable at 30 cents each expired on 31 August 2024
•
No other options have been exercised.
No person entitled to exercise these options had or has any right, by virtue of the option, to participate in any
share issue of any other body corporate.
LEGAL PROCEEDINGS
The Company was not a party to any legal proceedings during the year.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company
for all or any part of those proceedings. The Company was not a party to any such proceedings during the
year.
DIRECTORS REPORT
VRX Silica Limited
60
ENVIRONMENTAL REGULATIONS
The Company is not currently subject to any specific environmental regulation. There have not been any
known significant breaches of any environmental regulations during the year under review and up until the
date of this report.
CORPORATE GOVERNANCE
Under ASX Listing Rule 4.10.3 the Company’s Corporate Governance Statement can be located at the URL
on the Company’s website being: https://vrxsilica.com.au/investor-centre/corporate-governance/
MATERIAL BUSINESS RISKS
The Company and its subsidiaries are subject to risks of both a general nature and ones that are specific to
their business activities including, but not limited to the following.
Specific Risks
(a)
Title risk
The ability of the Company to carry out successful exploration and mining activities on its tenements
will depend on it obtaining and maintaining the appropriate approvals and permits to operate,
including exploration licences, programs of work, environmental approvals, mining leases, mining
permits and other approvals and permits necessary to carry out these activities.
The grant, maintenance and renewal of such licences, permits and approvals is regulated by the
applicable State legislation, such as the Mining Act 1978 (WA) as amended. No guarantee can be
given that any such licence, permit or approval will be granted and/or maintained or, if granted, any
attaching conditions are acceptable to the Company or their grant is not overturned or restricted.
There is also no guarantee that a renewal will be automatically granted other than in accordance
with the applicable mining legislation or granted without new conditions, including relinquishment
of ground.
Each tenement carries with it annual expenditure and reporting commitments as well as other
conditions requiring compliance. There is a risk that the Company could lose title to one or more of
its tenements if tenement conditions or annual expenditure commitments are not met.
(b)
Granting of licenses, permits etc.
The Company requires numerous governmental, environmental, mining permits, water rights and
approvals authorising operations for mining and processing facilities. A decision by a governmental
agency or other third party to deny or delay issuing a new or renewed permit or approval, or to
revoke or substantially modify an existing permit or approval, could have a material adverse effect
on the ability to continue operations. Furthermore, state and local governments could impose a
moratorium on mining operations in certain areas. Expansion of operations is also predicated on
securing the necessary environmental or other permits, water rights or approvals, which may not
be received in a timely manner or at all.
(c)
Exploration and Development Risks
Mineral exploration, development and mining are high-risk enterprises, only occasionally providing
high rewards. In addition to the normal competition for prospective ground, and the high average
costs of discovery of an economic deposit, factors such as demand for commodities, stock market
fluctuations affecting access to new capital, sovereign risk, environmental issues, labour disruption,
project financing difficulties, foreign currency fluctuations and technical problems all affect the ability
of a company to profit from any discovery.
DIRECTORS REPORT
VRX Silica Limited
61
There is no assurance that exploration of the mineral interests currently held by the Company, or
any other projects that may be acquired in the future will result in the discovery of an economically
viable mineral deposit. Even if an apparently viable mineral deposit has been identified, there is no
guarantee that it can be profitably exploited.
(d)
Resource and Reserve Estimates
Resource estimates are expressions of judgement based on knowledge, experience and industry
practice. Estimates that are valid when made may change significantly when new information
becomes available through drilling, sampling, economic conditions and similar examinations.
In addition, resource estimates are necessarily imprecise and depend to some extent on
interpretations, which may prove to be inaccurate. Should the Company encounter mineralisation
or formations different from those predicted, resource estimates may have to be adjusted and
mining plans may have to be altered in a way which could adversely affect the Company’s
operations.
Reserve and resource estimates are expressions of judgment based on drilling results and other
exploration observations, along with a competent person’s experience working with relevant mining
properties, and other factors. Estimates based on available data and interpretations and thus
estimations may prove to be inaccurate or may change substantially when new information
becomes available. The actual quality and characteristics of mineral deposits cannot be known until
mining takes place and will almost always differ from the assumptions used to develop resources.
Reserves are value based financial and operational forecasts and, consequently, the actual
reserves, resources and economic conditions may differ from those estimated either positively or
negatively.
(e)
Capital costs estimates
The Company has undertaken feasibility studies on, among other things, the capital costs to
develop its silica sand projects through to production. These studies are undertaken at a point in
time.
If the Company proceeds with a decision to mine at one or more of its projects, during the
construction phase prices of goods and services in connection with that mine’s development may
increase substantially, resulting in an increase in the cost to develop the mine. As a consequence,
the Company may need to raise additional capital to complete the construction and there is no
guarantee that the Company will be able to achieve this.
(f)
Operational Risks
The operations of the Company may be affected by various factors including failure to locate or
identify mineral deposits, failure to achieve predicted grades in exploration or mining, operational
and technical difficulties encountered in mining, difficulties in commissioning and operating plant
and equipment, mechanical failure or plant breakdown, unanticipated metallurgical problems which
may affect extraction costs, adverse weather conditions, industrial and environmental accidents,
industrial disputes and unexpected shortages or increases in the costs of consumables, spare
parts, plant and equipment, fire, explosions and other incidents beyond the control of the Company.
These risks and hazards could also result in damage to, or destruction of, production facilities,
personal injury, environmental damage, business interruption, monetary losses and possible legal
liability. While the Company currently intends to maintain insurance within ranges of coverage
consistent with industry practice, no assurance can be given that the Company will be able to obtain
such insurance coverage at reasonable rates (or at all), or that any coverage it obtains will be
adequate and available to cover any such claims.
DIRECTORS REPORT
VRX Silica Limited
62
(g)
Environmental Risks
The operations and proposed activities of the Company are subject to regulations concerning the
environment. The government and other authorities that administer and enforce environmental laws
determine these requirements. As with all exploration projects and mining operations, the
Company’s activities are expected to have an impact on the environment, particularly if mine
development proceeds, and the Company will require approval from the relevant authorities before
it can undertake such activities. The Company intends to conduct its activities in an environmentally
responsible manner and in accordance with best industry practice and applicable laws.
The cost and complexity of complying with the applicable environmental laws and regulations may
prevent the Company from being able to develop potentially economically viable mineral deposits.
Environmental matters applicable to the Company’s silica sand projects are within the remit of
Commonwealth and State authorities, including under legislation in the form of the Environment
Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act) and the Environmental
Protection Act 1986 (WA). The Company will need to seek pre-approval on environmental matters
for any mining operations and the Environmental Protection Authority (EPA) will, among other
things, assess the impact of proposed activities on flora and fauna and matters of national
environmental significance under the EPBC Act as part of an accredited assessment.
The assessment process requires interaction between Commonwealth and State authorities and
there is no fixed time for the process to complete. Significant delays in the process can potentially
have a material adverse effect on the Company’s business, financial condition and operations and
affect the Company’s ability to pursue the projects. In addition, there is no guarantee that the
assessments undertaken by these authorities will be favourable or the approvals sought will be
granted. Failure to obtain such approvals will prevent the Company from undertaking its desired
activities and this will have a material adverse effect on the Company’s business, financial condition
and operations.
The Environmental Review Document (ERD) for Arrowsmith North has been accepted by the
Department of Water and Environmental Regulation (DWER) for publication and a four-week Public
Environmental Review (PER) completed in mid-July 2023. Following completion of the PER period
DWER compiled public submissions for the Company to review and these were provided to the
Company in September 2023. The Company lodged its response to those public submissions for
consideration by the EPA in October 2023. The EPA has collated formal comments from all relevant
State Government departments and the Commonwealth Department of Climate Change, Energy,
the Environment and Water and provided these to the Company. In consultation with DWER, the
Company has updated and is finalising its ‘Response to Submissions’ document in response to
these comments. This PER and response process are the final steps before the EPA prepares an
assessment report including recommendations to the Western Australian Environment Minister on
whether the proposal should be approved. There is no guarantee that such approval will be
forthcoming.
Environmental approval will be required for the Company’s other silica sand projects, including
Muchea. There is no guarantee that such approval will be forthcoming.
Future State and Federal legislation and regulations governing mineral exploration and production
may impose significant environmental obligations on the Company. The Company is unable to
predict the effect of additional environmental laws and regulations, which may be adopted in the
future, including whether any such laws or regulations would materially increase the Company’s
cost of doing business or affect its operations in any area. There can be no assurances that new
environmental laws, regulations or stricter enforcement policies, once implemented, will not oblige
the Company to incur significant expenses and undertake significant investments in such respect
which could have a material adverse effect on the Company’s business, financial condition and
results of operations.
DIRECTORS REPORT
VRX Silica Limited
63
Any failure by the Company to comply with applicable environmental laws and regulations may
cause governmental authorities to take actions that could adversely impact operations and financial
condition, including issuance of administrative, civil, and criminal penalties denial, modification, or
revocation of permits or other authorisations, imposition of injunctive obligations or other limitations
on operations, including cessation of operations; and requirements to perform site investigatory,
remedial, or other corrective actions.
(h)
Metallurgy
Mineral recoveries are dependent upon the metallurgical process, and by its nature contain
elements of significant risk such as:
(i)
identifying a metallurgical process through test work to produce a saleable product;
(ii)
developing an economic process route to produce a product; and
(iii)
changes in mineralogy in the deposit can result in inconsistent recovery, affecting the
economic viability of a project.
(i)
Changes to glassmaking and foundry industries in Asia
Prices for silica sand will be subject to glass and foundry demand in Asia, among other industries.
A reduction in glass production or foundry activity would generally depress the demand,
development, production, and mining activity for silica sand the Company may produce. Such a
decline could have a material adverse effect on the Company’s business, results of operations and
financial conditions generally.
(j)
Changes to demand for silica sand generally
Demand for silica sand products can be affected generally by advances in industry and the
development and use of new technology or new processes that reduce or eliminate the need for
silica sand products, including as a material for glassmaking, metal casting, metallurgical
processes, chemical production, paint and coatings, ceramics, filtration and water production and
proppant.
Such events could cause a decline in demand for the products produced and could have a material
adverse effect on the Company’s business, results of operations and financial conditions generally.
(k)
Fluctuations in market pricing
Supply agreements involving the sale of silica sand products may be fixed or have market-based
pricing mechanisms, or a combination of both. Accordingly, in periods with decreasing prices,
results of operations may be lower if prices under these agreements are not fixed. In periods with
increasing prices, some agreements may permit an increase in prices; however, some customers
may elect to cease purchasing products if they do not agree with price increases or are able to find
alternative, cheaper sources of supply. Furthermore, certain volume-based supply agreements may
influence the ability to fully capture current market pricings.
Depending on the pricing provisions, there may be significant variability in results of operations and
cash flows from period to period.
(l)
A significant reduction in purchases by major buyers
Major customers may not continue to purchase the same levels of products in the future due to a
variety of reasons. The Company is likely to sell products to customers on a purchase order basis
and pursuant to supply agreements that will contain customary termination provisions for
bankruptcy related events and uncured breaches of the applicable agreement. If any of these major
customers substantially reduces or altogether ceases purchasing products and the Company is not
able to generate replacement sales into the market, the business, financial condition, and results
of operations could be adversely affected for a short-term period until such time as the Company
can generate replacement sales in the market.
DIRECTORS REPORT
VRX Silica Limited
64
(m)
Credit risk of major international export customers
The Company is subject to the risk of loss resulting from non-payment or non-performance by
customers, many of whose operations are concentrated solely in the Asian market which is subject
to volatility and therefore credit risk. Credit procedures and policies may not be adequate to fully
reduce customer credit risk. If the Company fails to adequately assess the creditworthiness of
customers or unanticipated deterioration in their creditworthiness, any resulting increase in non-
payment or non-performance by them and the inability to re-market or otherwise use the production
could have a material adverse effect on the Company’s business, financial condition, and results of
operations.
(n)
Increasing logistics costs for rail, port and shipping
Transportation and handling costs are a significant component of the total delivered cost of
products. In many instances, transportation costs can represent 50% to 60% of the delivered cost
of silica sand. The high relative cost of transportation could favour suppliers located in close
proximity to the customer. The Company will contract with rail, wharf and ship services to move
products from the production facilities to customers. Labour disputes, derailments, adverse weather
conditions or other environmental events and other changes to rail freight systems could interrupt
or limit available transportation services or result in a significant increase in transportation service
rates. Increased costs resulting from these types of events that the Company is not able to pass on
to customers could impair the ability to deliver the products economically to customers or to expand
the markets.
(o)
Maintaining effective quality control at the mining and processing operation
The performance and quality of the products are critical to the success of the business. These
factors depend significantly on the effectiveness of the quality control systems, the quality-training
program, and the ability to ensure that employees adhere to the quality control policies and
guidelines. Any significant failure or deterioration of the quality control systems could have a
material adverse effect on the Company’s business, financial condition, results of operations, and
reputation.
(p)
Interruptions or failures in information technology systems
The Company’s operations may rely on sophisticated information technology systems and
infrastructure to support the business, including process control technology. Any of these systems
may be susceptible to outages due to fire, floods, power loss, telecommunications failures, usage
errors by employees, computer viruses, cyber-attacks or other security breaches, or similar events.
The failure of any of the information technology systems may cause disruptions in operations, which
could adversely affect product supply, sales and profitability.
(q)
Extreme seasonal weather conditions
Unexpected weather conditions may result in damage to plant, equipment and transport
infrastructure or the Company having insufficient stockpiles to supply feedstock for rail and ship
operations, and result in being unable to satisfy customer requirements during these periods.
As a consequence of potential seasonal supply impacts, cash flows from operations can fluctuate
if plant operations must remain shut down due to extreme weather conditions.
(r)
Insurance Risks
The Company intends to adequately insure its operations in accordance with industry practice.
However, in certain circumstances, the Company’s insurance may not be of a nature or level to
provide adequate insurance cover. The occurrence of an event that is not covered or fully covered
by insurance could have a material adverse effect on the business, financial condition and results
of the Company.
Insurance of all risks associated with mineral exploration and production is not always available
and, where available, the costs can be prohibitive.
DIRECTORS REPORT
VRX Silica Limited
65
(s)
Key personnel
The ability of the Company to achieve its objectives depends on the retention of key employees
and contractors who provide technical expertise. If the Company cannot secure technical expertise
(for example to carry out drilling) or if the services of the present technical panel cease to become
available to the Company, this may affect the Company’s ability to achieve its objectives either fully
or within the timeframes and the budget the Company has decided upon.
Whilst the ability of the Company to achieve its objectives may be affected by the matters mentioned
above, the Company believes that appropriately skilled and experienced professionals would be
available to provide services to the Company at market levels of remuneration in the event key
external contractors cease to be available.
(t)
Shortage of labour or labour disputes
Efficient mining using modern techniques and equipment requires skilled operators, preferably with
several years of experience and proficiency in multiple mining tasks, including processing of mined
minerals. If a shortage of experienced labour is encountered or subject to labour disputes or if the
Company is unable to train the necessary number of skilled operators, there could be an adverse
impact on productivity and costs and the ability to maintain production. An inability to maintain good
relations with the workforce could cause a material adverse effect on the operations and financial
position.
(u)
No Profit To-Date
The Company has incurred losses since its inception and it is therefore not possible to evaluate its
prospects based on past performance. As the Company intends to continue investing in exploration
and development programs, the Company anticipates making further losses in the foreseeable
future.
While the Company has confidence in the future revenue-earning potential of the Company, there
can be no certainty that the Company will achieve or sustain profitability or achieve or sustain
positive cash flow from its operating activities.
(v)
Changes in laws and regulations related to mining and processing
Mining operations are subject to a variety of Federal, State and Local regulatory legislative
requirements affecting the mining and mineral processing industry, including among others, those
relating to employee health and safety, environmental permitting and licensing, air and water
emissions, greenhouse gas emissions, water pollution, waste management, remediation of soil and
groundwater contamination, land use, reclamation and restoration of properties, hazardous
materials, and natural resources.
Some environmental laws impose substantial penalties for non-compliance, and liability for the
remediation of releases of hazardous substances. Liability under Federal and State laws may be
imposed as a result of conduct that was lawful at the time it occurred or for the conduct of, or
conditions caused by, prior operators or other third parties. Failure to properly handle, transport,
store or dispose of hazardous materials or otherwise conduct operations in compliance with
environmental laws could expose the Company to liability for governmental penalties, cleanup costs
and civil or criminal liability associated with releases of such materials into the environment,
damages to property or natural resources and other damages, as well as potentially impair the
ability to conduct operations.
In addition, future environmental laws and regulations could restrict the ability to expand the
facilities or extract mineral reserves or could require the Company to acquire costly equipment or
to incur other significant expenses in connection with business. Future events, including changes
in any environmental requirements (or their interpretation or enforcement) and the costs associated
with complying with such requirements, could have a material adverse effect on the Company.
DIRECTORS REPORT
VRX Silica Limited
66
(w)
Foreign Exchange Risk
International prices of silica sand products are denominated in United States Dollars, whereas the
income and expenditure of the Company are and will be taken into account in Australian currency,
exposing the Company to the fluctuations and volatility of the rate of exchange between the United
States Dollar and the Australian Dollar as determined in international markets.
(x)
Native title and Aboriginal Heritage
The Native Title Act recognises and protects the rights and interests in Australia of Aboriginal and
Torres Strait Islander people in land and waters, according to their traditional laws and customs.
There is significant uncertainty associated with Native Title in Australia and this may impact on the
Company’s operations and future plans.
Native Title can be extinguished by valid grants of land (such as freehold title) or waters to people
other than the Native Title holders or by valid use of land or waters. It can also be extinguished if
the indigenous group has lost its connection with the relevant land or waters. Native Title is not
necessarily extinguished by the grant of mining leases, although a valid mining lease prevails over
Native Title to the extent of any inconsistency for the duration of the title.
Tenements granted before 1 January 1994 are valid or validated by the Native Title Act. For
tenements to be validly granted (or renewed) after 1 January 1994, the future act regime established
by the Native Title Act must be complied with. The existence of a Native Title claim is not an
indication that Native Title in fact exists on the land covered by the claim, as this is a matter
ultimately determined by the Federal Court.
The Company must also comply with State and Commonwealth Aboriginal Cultural Heritage
legislation requirements. These require certain due diligence investigations to be undertaken ahead
of the commencement of exploration and mining and expose the Company to an application by or
on behalf of an Aboriginal or a group of Aboriginals seeking the preservation or protection of a
specified area from injury or desecration, potentially even when the due diligence conducted by the
Company has not identified any material issues. Whilst no sites of Aboriginal heritage have been
uncovered in surveys conducted to-date on the Company’s projects, in the event the Company
subsequently discovers evidence of Aboriginal heritage on land accessed by the Company or an
individual or group of individuals seek a preservation or protection declaration from the
Commonwealth, the Company must comply with regulations and/or declarations prohibiting the
disturbance of physical evidence of prehistoric or historical significance without statutory permission
and legislation prohibiting or restricting access to Aboriginal cultural heritage or native title land.
Accordingly, delays or additional costs in the exploration or production of the Company’s business
may be experienced and could adversely impact the viability of the Company’s projects. Further,
the disturbance of any such land or objects may expose the Company to additional fines or other
penalties.
(y)
Future Capital Needs and Additional Funding
There can be no guarantees that the Company’s cash reserves will be sufficient to successfully
achieve all the objectives of the Company’s overall business strategy.
Any additional equity financing may be dilutive to the Company’s existing shareholders and any
debt financing, if available, may involve restrictive covenants, which limit the Company’s operations
and business strategy, and may restrict the ability to finance future operations or capital needs or
to engage in, expand, or pursue the business activities. The ability to obtain financing or to access
the capital markets for future equity or debt offerings may be limited by the financial conditions at
the time of any such financing or offering, the covenants contained in credit facilities, term loans or
future debt agreements, adverse market conditions or other contingencies and uncertainties that
are beyond our control. Failure to obtain the funds necessary to maintain, develop, and increase
the asset base, could adversely impact the Company’s growth and profitability. Even if the
Company is able to obtain financing or access the capital markets, incurring debt will incur interest
expense and increase financial leverage, and the level of indebtedness could restrict the ability to
fund future development and acquisition activities.
DIRECTORS REPORT
VRX Silica Limited
67
General risks
(a)
Economic Risk
Changes in the general economic climate in which the Company will operate may adversely affect
the financial performance of the Company. Factors that may contribute to that general economic
climate include the level of direct and indirect competition against the Company, industrial disruption
and the rate of growth of gross domestic product in Australia and other jurisdictions in which the
Company may acquire mineral assets.
(b)
Changes in Government Policies and Legislation
Any material adverse changes in government policies or legislation of Australia or any other country
that the Company may acquire economic interests may affect the viability and profitability of the
Company.
(c)
Changing political environment
Changes in the political relationship between Australia and its trading parties can affect the demand
for the Company’s products. Examples of this might be trade embargos or increased tariffs on the
Company’s goods or economic sanctions against the countries that are buying the Company’s
products or war between countries to which the Company exports its products.
(d)
Risk of litigation, claims and disputes
The Company is exposed to the risk of actual or threatened litigation or legal disputes in the form
of claims by contract counterparties, personal injury and property damage claims, environmental
and indemnity claims, employee claims and other litigation and disputes. There is a risk that such
litigation, claims and disputes could materially and adversely affect the Company’s operating and
financial performance due to the cost of defending and/or settling such claims, and could affect the
Company’s reputation.
The Company is not aware of any legal proceedings pending or threatened against it or any of its
subsidiary companies.
(e)
Global credit and investment markets
Global credit, commodity and investment markets can experience a high degree of uncertainty and
volatility. The factors which lead to this situation are outside the control of the Company and may
result in volatility and uncertainty in world stock markets (including ASX). This may impact the price
at which the Company’s shares trade regardless of operating performance and affect the
Company’s ability to raise additional equity and/or debt to achieve its objectives, if required. The
market price of securities can fall as well as rise and may be subject to varied and unpredictable
influences on the market for equities in general, and resources securities in particular. Neither the
Company, nor the Directors warrant the future performance of the Company or any return on an
investment in the Company.
DIRECTORS REPORT
VRX Silica Limited
68
AUDITOR
RSM Australia Partners continues in office in accordance with Section 327 of the Corporations Act 2001.
NON-AUDIT SERVICES
Details of amounts paid or payable to the auditor for non-audit services provided during the year by the
auditor are outlined in Note 4 to the financial statements. The directors are satisfied that the provision of non-
audit services is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001.
The directors are of the opinion that the services do not compromise the auditor’s independence as all non-
audit services have been reviewed to ensure that they do not impact the impartiality and objectivity of the
auditor and none of the services undermine the general principles relating to auditor independence as set
out in Code of Conduct APES 110 Code of Ethics for Professional Accountants issued by the Accounting
Professional & Ethical Standards Board.
OFFICERS OF THE COMPANY WHO ARE FORMER PARTNERS OF RSM AUSTRALIA PARTNERS
There are no officers of the Company who are former partners of RSM Australia Partners.
AUDITOR’S DECLARATION OF INDEPENDENCE
The auditor’s independence declaration as required under section 307C of the Corporations Act 2001, has been
received and is included within the financial report.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the
Corporations Act 2001.
Bruce Maluish
Director
Perth, 26 September 2024
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
69
Consolidated
Note
2024
2023
$
$
Continuing operations
Revenue
2(a)
31,512
113,479
Exploration and evaluation expenditure
(1,180,492)
(900,428)
Depreciation
(116,442)
(108,954)
Directors fees and benefits expense
(536,183)
(558,300)
Finance costs
(25,370)
(22,434)
Impairment of deferred exploration
11
(96,118)
-
Loss on revaluation of equity instruments
(287,500)
(353,125)
Share based payments
23
(15,569)
(1,207,573)
Other expenses
2(b)
(2,038,123)
(2,023,100)
Loss before income tax expense
(4,264,285)
(5,060,435)
Income tax expense
3
-
-
Net loss for the year
(4,264,285)
(5,060,435)
Other comprehensive income
-
-
Other comprehensive income for the year, net of tax
-
-
Total comprehensive loss attributable to the members of
VRX Silica Limited
(4,264,285)
(5,060,435)
Earnings per share attributable to the members of
VRX Silica Limited
Cents
Cents
Basic/diluted loss per share
5
(0.73)
(0.90)
The accompanying notes form part of these financial statements.
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2024
VRX Silica Limited
70
Consolidated
Note
2024
2023
$
$
ASSETS
Current Assets
Cash and cash equivalents
6
2,313,067
1,581,811
Trade and other receivables
7
134,142
162,590
Total Current Assets
2,447,209
1,744,401
Non-Current Assets
Trade and other receivables
7
96,172
93,156
Financial assets at fair value through profit or loss
8
156,250
443,750
Plant and equipment
9
2,539,277
2,271,229
Right-of-use assets
10
311,912
405,486
Deferred exploration expenditure
11
13,620,303
13,599,089
Total Non-Current Assets
16,723,914
16,812,710
Total Assets
19,171,123
18,557,111
LIABILITIES
Current Liabilities
Trade and other payables
12
513,070
381,685
Provisions
13
249,230
220,548
Lease liabilities
14
89,766
80,934
Total Current Liabilities
852,066
683,167
Non-Current Liabilities
Lease liabilities
14
247,456
337,222
Total Non-Current Liabilities
247,456
337,222
Total Liabilities
1,099,522
1,020,389
Net Assets
18,071,601
17,536,722
EQUITY
Issued capital
16
54,630,239
49,906,519
Reserves
17
7,805,425
7,729,981
Accumulated losses
15
(44,364,063)
(40,099,778)
Total Equity
18,071,601
17,536,722
The accompanying notes form part of these financial statements.
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
71
Consolidated
Issued
Capital
Reserves
Accumulated
Losses
Total
$
$
$
$
2024
Balance at 1 July 2023
49,906,519
7,729,981
(40,099,778)
17,536,722
Loss for the year
-
-
(4,264,285)
(4,264,285)
Total comprehensive loss for the year
-
-
(4,264,285)
(4,264,285)
Securities issued during the year
5,218,243
-
-
5,218,243
Capital raising costs
(494,523)
-
-
(494,523)
Cost of share-based payments
-
75,444
-
75,444
Balance at 30 June 2024
54,630,239
7,805,425
(44,364,063)
18,071,601
2023
Balance at 1 July 2022
49,906,519
6,522,408
(35,039,343)
21,389,584
Loss for the year
-
-
(5,060,435)
(5,060,435)
Total comprehensive loss for the year
-
-
(5,060,435)
(5,060,435)
Cost of share-based payments
-
1,207,573
-
1,207,573
Balance at 30 June 2023
49,906,519
7,729,981
(40,099,778)
17,536,722
The accompanying notes form part of these financial statements.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
72
Consolidated
Note
2024
2023
$
$
Cash flows from operating activities
Payments to suppliers and employees
(3,566,632)
(3,035,307)
Interest received
27,199
103,867
Other income
-
23,980
Interest and other finance costs paid
(25,370)
(22,434)
Net cash outflows from operating activities
6(i)
(3,564,803)
(2,929,894)
Cash flows from investing activities
Payments for investments
-
(15,625)
Payments for plant and equipment
(270,916)
(1,904,538)
Payments on deferred exploration
(1,016,765)
(2,931,731)
Government grants received on exploration interests
881,079
197,674
Payments of security deposits
-
(89,004)
Proceeds from release of security deposits
-
22,046
Net cash outflows from investing activities
(406,602)
(4,721,178)
Cash flows from financing activities
Proceeds from issue of shares
5,218,243
-
Payment of capital raising costs
(434,648)
-
Repayment of lease liabilities
(80,934)
(72,994)
Net cash inflow/(outflow) from financing activities
4,702,661
(72,994)
Net increase/(decrease) in cash held
731,256
(7,724,066)
Cash at beginning of the financial year
1,581,811
9,305,877
Cash at end of financial year
6
2,313,067
1,581,811
The accompanying notes form part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
73
1.
Material Accounting Policy Information
These consolidated financial statements and notes represent those of VRX Silica Limited and
controlled entities. (“Group” or “Consolidated Entity”).
VRX Silica Limited is a company limited by shares incorporated in Australia whose shares are publicly
traded on the Australian Securities Exchange. The nature of the operations and principal activities of
the Group are described in the Directors’ Report.
The accounting policies that are material to the consolidated entity are set out below. The accounting
policies adopted are consistent with those of the previous financial year, unless otherwise stated.
The separate financial statements of the parent entity, VRX Silica Limited, have not been presented
within this financial report as permitted by the Corporations Act 2001.
The financial report was authorised for issue on 26 September 2024 by the directors of the Company.
(a)
Basis of Preparation
The financial report is a general purpose financial report which has been prepared in accordance with
Australian Accounting Standards, Australian Accounting Interpretations, other authoritative
pronouncements of the Australian Accounting Standards Board (‘AASB’) and the Corporations Act
2001. The group is a for-profit entity for financial reporting purposes under Australian Accounting
Standards.
Except for cash flow information, the financial report has been prepared on an accruals basis and is
based on historical costs modified by the revaluation of selected non-current assets, financial assets
and financial liabilities for which the fair value basis of accounting has been applied.
(b)
New or Amended Accounting Standards and Interpretations Adopted
The consolidated entity has adopted all of the new and revised Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board that are mandatory for the current
reporting period.
(c)
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but
are not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting
period ended 30 June 2024. The consolidated entity has not yet assessed the impact of these new or
amended Accounting Standards and Interpretations.
(d)
Statement of Compliance
The financial report complies with Australian Accounting Standards, which include Australian
equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures
that the financial report, comprising the financial statements and notes thereto, complies with
International Financial Reporting Standards (IFRS).
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
74
1. Material Accounting Policy Information (Continued)
(e)
Going Concern
As disclosed in the financial statements, the Group incurred a loss of $4,264,285 and had net cash
outflows from operating activities of $3,564,803; net cash outflow from investing activities of $406,602
and net cash inflow from financing activities of $4,702,661 for the year ended 30 June 2024. As at that
date, the Group had net current assets of $1,595,143 including cash and cash equivalents of
$2,313,067.
The Directors believe that it is reasonably foreseeable that the Group will continue as a going concern
and that it is appropriate to adopt the going concern basis in the preparation of the financial report after
consideration of the following factors:
•
Receipt of the year ended 30 June 2023 and future R&D tax incentive offset refunds;
•
Careful cost management and great scrutiny over any other future commitments including cost-
cutting measures, such as reduced personnel salaries and director fees; and
•
The Company has a strong track record of successfully raising capital and expects to be able to
raise additional capital through equity placements.
(f)
Basis of Consolidation
The consolidated financial statements comprise the financial statements of VRX Silica Limited
(“Company” or “Parent Entity”) and its subsidiaries as at 30 June each year (“Consolidated Entity” or
“Group”). Control is achieved where the Company has the power to govern the financial and operating
policies of an entity so as to obtain benefits from its activities.
The financial statements of the subsidiaries are prepared for the same reporting period as the parent
company, using consistent accounting policies.
In preparing the consolidated financial statements, all intercompany balances and transactions, income
and expenses and profit and losses resulting from intra-group transactions have been eliminated in full.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease
to be consolidated from the date on which control is transferred out of the Group. Control exists where
the Company has the power to govern the financial and operating policies of an entity so as to obtain
benefits from its activities. The existence and effect of potential voting rights that are currently
exercisable or convertible are considered when assessing when the Group controls another entity.
Unrealised gains or transactions between the Group and its associates are eliminated to the extent of
the Group’s interests in the associates. Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the asset transferred. Accounting policies of associates have
been changed where necessary to ensure consistency with the policies adopted by the Group.
Non-controlling interests represent the portion of profit or loss and net assets in subsidiaries not held
by the Group and are presented separately in the statement of comprehensive income and within equity
in the consolidated statement of financial position. Losses are attributed to the non-controlling interests
even if that results in a deficit balance.
The Group treats transactions with non-controlling interests that do not result in a loss of control as
transactions with equity owners of the Group. A change in ownership interest results in an adjustment
between the carrying amounts of the controlling and non-controlling interests to reflect their relative
interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling
interests and any consideration paid or received is recognised within equity attributable to owners of
the Company.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
75
1. Material Accounting Policy Information (Continued)
(f)
Basis of Consolidation (continued)
When the group ceases to have control, joint control or significant influence, any retained interest in
the entity is remeasured to its fair value with the change in carrying amount recognised in profit or loss.
The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained
interest as an associate, joint controlled entity or financial asset. In addition, any amounts previously
recognised in other comprehensive income in respect of that entity are accounted for as if the Group
had directly disposed of the related assets or liabilities. This may mean that amounts previously
recognised in other comprehensive income are reclassified to profit or loss.
(g)
Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the
chief operating decision maker. The chief operating decision maker, who is responsible for allocating
resources and assessing performance of the operating segments, has been identified as the Board of
Directors of the Company.
(h)
Revenue Recognition
The consolidated entity recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the consolidated entity is
expected to be entitled in exchange for transferring goods or services to a customer. For each contract
with a customer, the consolidated entity: identifies the contract with a customer; identifies the
performance obligations in the contract; determines the transaction price which takes into account
estimates of variable consideration and the time value of money; allocates the transaction price to the
separate performance obligations on the basis of the relative stand-alone selling price of each distinct
good or service to be delivered; and recognises revenue when or as each performance obligation is
satisfied in a manner that depicts the transfer to the customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the
customer such as discounts, rebates and refunds, any potential bonuses receivable from the customer
and any other contingent events. Such estimates are determined using either the 'expected value' or
'most likely amount' method. The measurement of variable consideration is subject to a constraining
principle whereby revenue will only be recognised to the extent that it is highly probable that a
significant reversal in the amount of cumulative revenue recognised will not occur. The measurement
constraint continues until the uncertainty associated with the variable consideration is subsequently
resolved.
Amounts received that are subject to the constraining principle are initially recognised as deferred
revenue in the form of a separate refund liability.
Sale of goods
Revenue from the sale of goods is recognised at the point in time when the customer obtains control
of the goods, which is generally at the time of delivery.
Rendering of services
Revenue from a contract to provide services is recognised over time as the services are rendered
based on either a fixed price or an hourly rate.
Interest
Interest revenue is recognised as interest accrues using the effective interest method.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
76
1. Material Accounting Policy Information (Continued)
(i)
Government Grants
Government grants relating to costs are deferred and recognised in profit or loss over the period
necessary to match them with the costs that they are intended to compensate.
(j)
Rounding of Amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian
Securities and Investments Commission, relating to ‘rounding-off’. Amounts in this report have been
rounded off in accordance with that Corporations Instrument to the nearest dollar.
(k)
Income Tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected
to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute
the amount are those that are enacted or substantively enacted by the reporting date.
Deferred income tax is provided on all temporary differences at the reporting date between the tax
bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
▪
when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or
liability in a transaction that is not a business combination and that, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss; or
▪
when the taxable temporary difference is associated with investments in subsidiaries, associates
or interests in joint ventures, and the timing of the reversal of the temporary difference can be
controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of
unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences and the carry-forward of unused tax
credits and unused tax losses can be utilised, except:
▪
when the deferred income tax asset relating to the deductible temporary difference arises from the
initial recognition of an asset or liability in a transaction that is not a business combination and, at
the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
▪
when the deductible temporary difference is associated with investments in subsidiaries, associates
or interests in joint ventures, in which case a deferred tax asset is only recognised to the extent
that it is probable that the temporary difference will reverse in the foreseeable future and taxable
profit will be available against which the temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to
the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part
of the deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each reporting date and are recognised
to the extent that it has become probable that future taxable profit will allow the deferred tax asset to
be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to
the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have
been enacted or substantively enacted at the reporting date.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
77
1. Material Accounting Policy Information (Continued)
(k)
Income Tax (continued)
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or
loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set
off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to
the same taxable entity and the same taxation authority.
The amount of benefits brought to account or which may be realised in the future is based on the
assumption that no adverse change will occur in income legislation and the anticipation that the Group
will derive sufficient future assessable income to enable the benefit to be realised and comply with the
conditions of deductibility imposed by the law.
VRX Silica Limited (the 'head entity') and its wholly-owned Australian subsidiaries have formed an
income tax consolidated group under the tax consolidation regime. The head entity and each subsidiary
in the tax consolidated group continue to account for their own current and deferred tax amounts. The
tax consolidated group has applied the 'separate taxpayer within group' approach in determining the
appropriate amount of taxes to allocate to members of the tax consolidated group.
In addition to its own current and deferred tax amounts, the head entity also recognises the current tax
liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits
assumed from each subsidiary in the tax consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are
recognised as amounts receivable from or payable to other entities in the tax consolidated group. The
tax funding arrangement ensures that the intercompany charge equals the current tax liability or benefit
of each tax consolidated group member, resulting in neither a contribution by the head entity to the
subsidiaries nor a distribution by the subsidiaries to the head entity.
(l)
Other Taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
▪
when the GST incurred on a purchase of goods and services is not recoverable from the taxation
authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as
part of the expense item as applicable; and
▪
receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the statement of financial position.
Cash flows are included in the cash flow statement on a gross basis and the GST component of cash
flows arising from investing and financing activities, which is recoverable from, or payable to, the
taxation authority are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable
to, the taxation authority.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
78
1. Material Accounting Policy Information (Continued)
(m)
Current and Non-Current Classification
Assets and liabilities are presented in the statement of financial position based on current and non-
current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or
consumed in the consolidated entity's normal operating cycle; it is held primarily for the purpose of
trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or
cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12
months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the consolidated entity's
normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12
months after the reporting period; or there is no unconditional right to defer the settlement of the liability
for at least 12 months after the reporting period. All other liabilities are classified as non-current.
(n)
Cash and Cash Equivalents
Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments
that are readily convertible to known amounts of cash and which are subject to an insignificant risk of
changes in value.
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash
equivalents as described above, net of outstanding bank overdrafts.
(o)
Trade and Other Receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost
using the effective interest method, less any allowance for expected credit losses. Trade receivables
are generally due for settlement within 30 days.
The consolidated entity has applied the simplified approach to measuring expected credit losses, which
uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables
have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
(p)
Investments and Other Financial Assets
Investments and other financial assets are initially measured at fair value. Transaction costs are
included as part of the initial measurement, except for financial assets at fair value through profit or
loss. Such assets are subsequently measured at either amortised cost or fair value depending on their
classification. Classification is determined based on both the business model within which such assets
are held and the contractual cash flow characteristics of the financial asset unless, an accounting
mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been
transferred and the consolidated entity has transferred substantially all the risks and rewards of
ownership. When there is no reasonable expectation of recovering part or all of a financial asset, its
carrying value is written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income
are classified as financial assets at fair value through profit or loss. Typically, such financial assets will
be either: (i) held for trading, where they are acquired for the purpose of selling in the short-term with
an intention of making a profit, or a derivative; or (ii) designated as such upon initial recognition where
permitted. Fair value movements are recognised in profit or loss.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
79
1. Material Accounting Policy Information (Continued)
(p)
Investments and Other Financial Assets (continued)
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which
the consolidated entity intends to hold for the foreseeable future and has irrevocably elected to classify
them as such upon initial recognition.
Impairment of financial assets
The consolidated entity recognises a loss allowance for expected credit losses on financial assets
which are either measured at amortised cost or fair value through other comprehensive income. The
measurement of the loss allowance depends upon the consolidated entity's assessment at the end of
each reporting period as to whether the financial instrument's credit risk has increased significantly
since initial recognition, based on reasonable and supportable information that is available, without
undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a
12-month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime
expected credit losses that is attributable to a default event that is possible within the next 12 months.
Where a financial asset has become credit impaired or where it is determined that credit risk has
increased significantly, the loss allowance is based on the asset's lifetime expected credit losses. The
amount of expected credit loss recognised is measured on the basis of the probability weighted present
value of anticipated cash shortfalls over the life of the instrument discounted at the original effective
interest rate.
For financial assets measured at fair value through other comprehensive income, the loss allowance
is recognised within other comprehensive income. In all other cases, the loss allowance is recognised
in profit or loss.
(q)
Plant and Equipment
Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment
losses.
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as
follows:
Plant and equipment – over 3 to 5 years
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if
appropriate, at each financial year end.
(i) Impairment
The carrying values of property, plant and equipment are reviewed for impairment at each reporting
date, with recoverable amount being estimated when events or changes in circumstances indicate that
the carrying value may be impaired.
The recoverable amount of plant and equipment is the higher of fair value less costs to sell and value
in use. In assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money and
the risks specific to the asset.
For an asset that does not generate largely independent cash inflows, recoverable amount is
determined for the cash-generating unit to which the assets belongs, unless the asset's value in use
can be estimated to be close to its fair value.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
80
1. Material Accounting Policy Information (Continued)
(q)
Plant and Equipment (continued)
An impairment exists when the carrying value of an asset or cash-generating units exceeds its
estimated recoverable amount. The asset or cash-generating unit is then written down to its
recoverable amount.
For plant and equipment, impairment losses are recognised in the statement of comprehensive
income.
(ii) Derecognition and disposal
An item of plant and equipment is derecognised upon disposal or when no further future economic
benefits are expected from its use or disposal.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the
asset is derecognised.
(r)
Right-of-use Assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is
measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable,
any lease payments made at or before the commencement date net of any lease incentives received,
any initial direct costs incurred, and, except where included in the cost of inventories, an estimate of
costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site
or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or
the estimated useful life of the asset, whichever is the shorter. Where the consolidated entity expects
to obtain ownership of the leased asset at the end of the lease term, the depreciation is over its
estimated useful life. Right-of use assets are subject to impairment or adjusted for any remeasurement
of lease liabilities.
The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease
liability for short-term leases with terms of 12 months or less and leases of low-value assets. Lease
payments on these assets are expensed to profit or loss as incurred.
(s)
Mineral Exploration and Evaluation Expenditure
Exploration and evaluation expenditures in relation to each separate area of interest are recognised as
an exploration and evaluation asset in the year in which they are incurred where the following conditions
are satisfied:
(i)
the rights to tenure of the area of interest are current; and
(ii)
at least one of the following conditions is also met:
(a)
the exploration and evaluation expenditures are expected to be recouped through
successful development and exploitation of the area of interest, or alternatively, by its sale;
or
(b)
exploration and evaluation activities in the area have not, at the reporting date, reached a
stage which permits a reasonable assessment of the existence, or otherwise, of
economically recoverable reserves and active and significant operations in, or relation to,
the area of interest are continuing.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
81
1. Material Accounting Policy Information (Continued)
(s)
Mineral Exploration and Evaluation (continued)
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to
explore, studies, exploratory drilling, trenching and sampling and associated activities and an allocation
of depreciation and amortisation of assets used in exploration and evaluation activities. General and
administrative costs are only included in the measurement of exploration and evaluation costs where
they are related directly to operational activities in a particular area of interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest
that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount.
The recoverable amount of the exploration and evaluation asset (for the cash generating unit(s) to
which it has been allocated being no larger than the relevant area of interest) is estimated to determine
the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying
amount of the asset is increased to the revised estimate of its recoverable amount, but only to the
extent that the increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognised for the asset in previous years.
Where a decision has been made to proceed with development in respect of a particular area of
interest, the relevant exploration and evaluation asset is tested for impairment and the balance is then
reclassified to development.
(t)
Impairment of Assets
The Group assesses at each reporting date whether there is an indication that an asset may be
impaired. If any such indication exists, or when annual impairment testing for an asset is required, the
Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the
higher of its fair value less costs to sell and its value in use and is determined for an individual asset,
unless the asset does not generate cash inflows that are largely independent of those from other assets
or groups of assets and the asset's value in use cannot be estimated to be close to its fair value. In
such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs.
When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the
asset or cash-generating unit is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market assessments of the time value of money and the
risks specific to the asset. Impairment losses relating to continuing operations are recognised in those
expense categories consistent with the function of the impaired asset unless the asset is carried at
revalued amount (in which case the impairment loss is treated as a revaluation decrease).
An assessment is also made at each reporting date as to whether there is any indication that previously
recognised impairment losses may no longer exist or may have decreased. If such indication exists,
the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there
has been a change in the estimates used to determine the asset’s recoverable amount since the last
impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its
recoverable amount. That increased amount cannot exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been recognised for the asset in prior years.
Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which
case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is
adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on
a systematic basis over its remaining useful life.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
82
1. Material Accounting Policy Information (Continued)
(u)
Trade and Other Payables
Trade payables and other payables are carried at amortised costs and represent liabilities for goods
and services provided to the Group prior to the end of the financial year that are unpaid and arise when
the Group becomes obliged to make future payments in respect of the purchase of these goods and
services. The amounts are unsecured and are usually paid within 30 days of recognition.
(v)
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result
of a past event, it is probable that an outflow of resources embodying economic benefits will be required
to settle the obligation and a reliable estimate can be made of the amount of the obligation.
When the Group expects some or all of a provision to be reimbursed, for example under an insurance
contract, the reimbursement is recognised as a separate asset but only when the reimbursement is
virtually certain. The expense relating to any provision is presented in the statement of comprehensive
income net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax
rate that reflects the risks specific to the liability.
When discounting is used, the increase in the provision due to the passage of time is recognised as a
borrowing cost.
(w)
Employee Benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave
expected to be settled within 12 months of the reporting date are recognised in current liabilities in
respect of employees' services up to the reporting date and are measured at the amounts expected to
be paid when the liabilities are settled
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they
are incurred.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the
reporting date are recognised in non-current liabilities, provided there is an unconditional right to defer
settlement of the liability. The liability is measured as the present value of expected future payments
to be made in respect of services provided by employees up to the reporting date using the projected
unit credit method. Consideration is given to expected future wage and salary levels, experience of
employee departures and periods of service. Expected future payments are discounted using market
yields at the reporting date on national government bonds with terms to maturity and currency that
match, as closely as possible, the estimated future cash outflows.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
83
1. Material Accounting Policy Information (Continued)
(x)
Lease Liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially
recognised at the present value of the lease payments to be made over the term of the lease,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the
consolidated entity's incremental borrowing rate. Lease payments comprise of fixed payments less any
lease incentives receivable, variable lease payments that depend on an index or a rate, amounts
expected to be paid under residual value guarantees, exercise price of a purchase option when the
exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The
variable lease payments that do not depend on an index or a rate are expensed in the period in which
they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying
amounts are remeasured if there is a change in the following: future lease payments arising from a
change in an index or a rate used; residual guarantee; lease term; certainty of a purchase option and
termination penalties. When a lease liability is remeasured, an adjustment is made to the
corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is
fully written down.
(y)
Finance Costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance
costs are expensed in the period in which they are incurred, including interest on short-term and long-
term borrowings.
(z)
Issued Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs
directly attributable to the issue of new shares or options for the acquisition of a new business are not
included in the cost of acquisition as part of the purchase consideration.
(aa) Earnings per Share
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to
exclude any costs of servicing equity (other than dividends) and preference share dividends, divided
by the weighted average number of ordinary shares, adjusted for any bonus element.
Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted
for:
▪
costs of servicing equity (other than dividends) and preference share dividends;
▪
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that
have been recognised as expenses; and
▪
other non-discretionary changes in revenues or expenses during the period that would result from
the dilution of potential ordinary shares; divided by the weighted average number of ordinary shares
and dilutive potential ordinary shares, adjusted for any bonus element.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
84
1. Material Accounting Policy Information (Continued)
(ab) Share-Based Payment Transactions
The Group provides benefits to employees (including senior executives) of the Group in the form of
share-based payments, whereby employees render services in exchange for shares or rights over
shares (equity-settled transactions).
When provided, the cost of these equity-settled transactions with employees is measured by reference
to the fair value of the equity instruments at the date at which they are granted. The fair value is
determined by using the Black-Scholes model or the binomial option valuation model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than
conditions linked to the price of the shares of VRX Silica Limited (market conditions) if applicable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity,
over the period in which the performance and/or service conditions are fulfilled, ending on the date on
which the relevant employees become fully entitled to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting
date reflects (i) the extent to which the vesting period has expired and (ii) the Group’s best estimate of
the number of equity instruments that will ultimately vest. No adjustment is made for the likelihood of
market performance conditions being met as the effect of these conditions is included in the
determination of fair value at grant date. The statement of comprehensive income charge or credit for
a period represents the movement in cumulative expense recognised as at the beginning and end of
that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is
only conditional upon a market condition.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the
terms had not been modified. In addition, an expense is recognised for any modification that increases
the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee,
as measured at the date of modification.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and
any expense not yet recognised for the award is recognised immediately. However, if a new award is
substituted for the cancelled award and designated as a replacement award on the date that it is
granted, the cancelled and new award are treated as if they were a modification of the original award,
as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the
computation of earnings per share.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
85
1. Material Accounting Policy Information (Continued)
(ac) Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or
disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants at the measurement date;
and assumes that the transaction will take place either: in the principal market; or in the absence of a
principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the
asset or liability, assuming they act in their economic best interests. For non-financial assets, the fair
value measurement is based on its highest and best use. Valuation techniques that are appropriate in
the circumstance and for which sufficient data are available to measure fair value, are used, maximising
the use of relevant observable inputs and minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy
that reflects the significance of the inputs used in making the measurements. Classifications are
reviewed at each reporting date and transfers between levels are determined based on a reassessment
of the lowest level of input that is significant to the fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal
expertise is either not available or when the valuation is deemed to be significant. External valuers are
selected based on market knowledge and reputation. Where there is significant change in fair value of
an asset or liability from one period to another, an analysis is undertaken which includes a verification
of the major inputs applied in the latest valuation and a comparison, where applicable, with external
sources of data.
(ad) Critical Accounting Judgements, Estimates and Assumptions
The preparation of the financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts in the financial statements. Management continually
evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue
and expenses. Management bases its judgements, estimates and assumptions on historical
experience and on other various factors, including expectations of future events, management believes
to be reasonable under the circumstances. The resulting accounting judgements and estimates will
seldom equal the related actual results. The judgements, estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer
to the respective notes) within the next financial year are discussed below.
Exploration and evaluation assets
The Group’s accounting policy for exploration and evaluation expenditure is set out at Note 1(q). The
application of this policy necessarily requires management to make certain estimates and assumptions
as to future events and circumstances. Any such estimates and assumptions may change as new
information becomes available. If, after having capitalised expenditure under the policy, it is concluded
that the expenditures are unlikely to be recovered by future exploitation or sale, then the relevant
capitalised amount will be written off to the statement of profit or loss and other comprehensive income.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value is determined by
using valuation model taking into account the terms and conditions upon which the instruments were
granted. The accounting estimates and assumptions relating to equity-settled share-based payments
would have no impact on the carrying amounts of assets and liabilities within the next annual reporting
period but may impact profit or loss and equity.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
86
Consolidated
2024
2023
$
$
2.
Revenue and Expenses
(a) Revenue
Interest received
31,512
99,776
Other
-
13,703
31,512
113,479
(b) Other Expenses
Audit fees
48,100
45,500
Consulting fees
215,134
251,659
Legal fees
253,276
207,005
Marketing
512,997
592,801
Rent
60,264
36,501
Securities exchange and registry fees
171,732
81,217
Superannuation
91,470
52,584
Travel
60,943
132,925
Other
624,207
622,908
2,038,123
2,023,100
3.
Income Tax
(a) Income tax expense
The income tax expense for the year differs from the prima facie
tax as follows:
Loss for year
(4,264,285)
(5,060,435)
Prima facie income tax (benefit) @ 30.0% (2023: 30%)
(1,279,286)
(1,518,130)
Tax effect of non-deductible/(non-assessable) items
(359,127)
(240,563)
Deferred tax assets not brought to account
1,638,413
1,758,693
Total income tax expense
-
-
(b) Deferred tax assets
Deferred tax assets not brought to account arising from tax losses,
the benefits of which will only be realised if the conditions for
deductibility set out in Note 1(k) occur:
14,549,987
13,009,888
There are no franking credits available to the Group.
4.
Auditors’ Remuneration
The auditor of VRX Silica Limited is RSM Australia Partners.
Amounts, received or due and receivable by RSM Australia
Partners for:
- audit or review services
48,100
45,500
- other non-audit services – taxation, R&D and grant compliance
27,706
115,932
75,806
161,432
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
87
Consolidated
2024
2023
$
$
5.
Earnings per Share (EPS)
Cents
Cents
Basic earnings per share
(0.73)
(0.90)
The earnings and weighted average number of ordinary shares
used in the calculation of basic earnings per share is as follows:
Earnings – Net loss for year
(4,264,285)
(5,060,435)
Weighted average number of ordinary shares used in the
calculation of basic EPS
No.
582,727,555
No.
559,570,152
6.
Cash and Cash Equivalents
Cash at bank
2,313,067
1,581,811
Cash at bank earns interest at floating rates based on daily bank deposit rates.
(i)
Reconciliation of loss for the year to net cash flows from
operating activities:
Loss for the year
(4,264,285)
(5,060,435)
Depreciation
116,442
108,954
Equity settled share-based payment
15,569
1,207,573
Exploration and evaluation expenditure
-
900,428
Impairment of deferred exploration
96,118
-
Loss on revaluation of equity instruments
287,500
353,125
Net gain on termination of property lease
-
(9,292)
Changes in assets and liabilities
Receivables
1,721
(13,433)
Payables
141,717
(462,515)
Provisions
28,682
31,620
GST payable/receivable
11,733
14,081
Net cash flows used in operating activities
(3,564,803)
(2,929,894)
(ii) Non-cash financing and investing activities:
There were no non-cash financing and investing activities during the year or the previous year.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
88
Consolidated
2024
2023
$
$
7.
Trade and Other Receivables
Current
GST recoverable
63,877
87,588
Other receivables
70,265
75,002
134,142
162,590
Terms and conditions relating to the above financial instruments:
•
Other receivables are non-interest bearing and generally repayable within 30 days.
•
Due to the short-term nature of these receivables, their carrying value is assumed to approximate their
fair value.
Non-Current
Security bonds
96,172
93,156
96,172
93,156
Allowance for expected credit losses
The Group has not recognised any expected credit losses for the year ended 30 June 2024.
8.
Financial Assets at Fair Value Through Profit or Loss
Non-Current
Listed ordinary shares – designated at fair value through profit or
loss
150,000
418,750
Listed share options – designated at fair value through profit or loss
6,250
25,000
156,250
443,750
Reconciliation
Opening fair value
443,750
781,250
Additions
-
15,625
Revaluation decrement
(287,500)
(353,125)
Closing fair value
156,250
443,750
Refer to Note 25 for further information on fair value measurement.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
89
Consolidated
2024
2023
$
$
9.
Plant and Equipment
Plant and equipment - at cost
345,570
341,066
Less: Accumulated depreciation
(288,894)
(266,026)
56,676
75,040
Construction in progress – at cost
2,482,601
2,196,189
Net carrying amount
2,539,277
2,271,229
Reconciliation
Plant and
Construction
Consolidated
Equipment
In Progress
Total
$
$
$
2024
Balance at 1 July 2023
75,040
2,196,189
2,271,229
Additions
4,504
286,412
290,916
Depreciation expense
(22,868)
-
(22,868)
Balance at 30 June 2024
56,676
2,482,601
2,539,277
2023
Balance at 1 July 2022
73,285
358,384
431,669
Additions
24,385
1,837,805
1,862,190
Depreciation expense
(22,630)
-
(22,630)
Balance at 30 June 2023
75,040
2,196,189
2,271,229
Consolidated
2024
2023
$
$
10.
Right-of-use Assets
Land and buildings – right-of-use
467,869
467,869
Less: Accumulated depreciation
(155,957)
(62,383)
311,912
405,486
There were no additions to the right-of-use assets during the year.
The consolidated entity leases land and buildings for its offices under a fixed five year agreement that
commenced on 1 November 2022.
The consolidated entity leases warehouse space and office equipment. These leases are either short-term
or low-value, so have been expensed as incurred and not capitalised as right-of-use assets.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
90
Consolidated
2024
2023
$
$
11.
Deferred Exploration Expenditure
Expenditure brought forward
13,599,089
11,951,536
Expenditure incurred during the year
998,411
2,745,655
R&D tax incentive received
(681,079)
(197,674)
State Government grants received
(200,000)
-
Expenditure written off during the year
-
(900,428)
Impairment of mining tenements relinquished during the year
(96,118)
-
Expenditure carried forward
13,620,303
13,599,089
The expenditure above relates principally to the exploration and evaluation phase. The ultimate recoupment
of this expenditure is dependent upon the successful development and commercial exploitation, or
alternatively, sale of the respective areas of interest, at amounts at least equal to book value.
12.
Trade and Other Payables
Current
Trade and other payables
513,070
381,685
Terms and conditions relating to the above financial instruments:
•
Trade payables are non-interest bearing and are normally settled on 30-day terms.
•
Due to the short-term nature of trade payable and accruals, their carrying value is assumed to
approximate their fair value.
13.
Provisions
Current
Employee benefits
249,230
220,548
Employee benefits represent annual leave and long service leave entitlements of employees within the Group
and are non-interest bearing.
Amounts not expected to be settled within the next 12 months
The current provision for employee benefits includes all unconditional entitlements where employees have
completed the required period of service and also those where employees are entitled to pro-rata payments
in certain circumstances. The entire amount is presented as current, since the consolidated entity does not
have an unconditional right to defer settlement. However, based on past experience, the consolidated entity
does not expect all employees to take the full amount of accrued leave or require payment within the next 12
months. The following amounts reflect leave that is not expected to be taken within the next 12 months:
Employee benefits expected to be settled after 12 months
85,006
78,490
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
91
Consolidated
2024
2023
$
$
14.
Lease Liabilities
Current
89,766
80,934
Non-current
247,456
337,222
15.
Equity - Accumulated Losses
Accumulated losses at the beginning of the year
(40,099,778)
(35,039,343)
Loss after income tax expenses for the year
(4,264,285)
(5,060,435)
Accumulated losses at the end of the year
(44,364,063)
(40,099,778)
16.
Issued Capital
(a) Issued and paid up capital
Ordinary shares - fully paid
54,630,239
49,906,519
Issue
(b) Movement in ordinary shares on issue
Price
No. of Shares
$
2024
Balance at the beginning of the year
560,403,029
49,906,519
Issued for cash pursuant to placement to investors
- 1 September 2023
$0.120
12,500,000
1,500,000
Issued for cash pursuant to share purchase plan
- 29 September 2023
$0.120
10,416,696
1,250,000
Share issue costs
-
(199,798)
Exercise of options expiring 23 October 2023
- using cashless exercise facility
-
58,823
-
Issued for cash pursuant to fully underwritten entitlement
offer - 29 May 2024
$0.055
44,877,120
2,468,243
Share issue costs
-
(294,725)
Balance at the end of the year
628,255,668
54,630,239
2023
Balance at the beginning of the year
558,403,029
49,906,519
Exercise of options expiring 30 November 2022
- using cashless exercise facility
-
2,000,000
-
Balance at the end of the year
560,403,029
49,906,519
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
92
16.
Issued Capital (Continued)
(c) Share options
At the end of the year, the following options over unissued ordinary shares were outstanding:
•
28,800,000 options expiring 31 August 2024, exercisable at 30 cents each;
•
10,000,000 options expiring 31 December 2025, exercisable at 20 cents each;
•
7,200,000 options expiring 31 December 2026, exercisable at 15 cents each; and
•
57,584,648 options expiring 31 August 2025, exercisable at 18 cents each.
(d) Terms and conditions of issued capital
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company,
to participate in proceeds from the sale of all surplus assets in proportion to the number of and amounts paid
up on shares held.
Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.
(e) Capital management
Management controls the capital of the Company in order to maintain a good debt to equity ratio, provide the
shareholders with adequate returns and ensure that the Company can fund its operations and continue as a
going concern.
The Company’s debt and capital includes ordinary share capital and financial liabilities, supported by financial
assets. There are no externally imposed capital requirements.
Management effectively manages the Company’s capital by assessing its financial risks and adjusting its
capital structure in response to changes in these risks and in the market. These responses include the
management of debt levels, distributions to shareholders and share issues. There have been no changes in
the strategy adopted by management to control the capital of the Company since the prior year. The gearing
ratios for the year ended 30 June 2024 and 30 June 2023 are as follows:
Consolidated
Note
2024
2023
$
$
Total liabilities (excluding provisions)
12, 14
850,292
799,841
Less: Cash and cash equivalents
6
(2,313,067)
(1,581,811)
Net debt
(1,462,775)
(781,970)
Total equity
18,071,601
17,536,722
Total capital
16,608,826
16,754,752
Gearing ratio
N/A
N/A
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
93
Consolidated
2024
2023
$
$
17. Reserves
Option issue reserve
7,805,425
7,729,981
Option issue reserve
(i) Nature and purpose of reserve
The option issue reserve is used to accumulate amounts received on the
issue of options and records items recognised as expenses on valuation of
incentive based share options.
(ii) Movements in reserve
Balance at the beginning of the year
7,729,981
6,522,408
Issue and vesting of incentive based share options
-
1,158,157
Options issued and vesting in lieu of fees payable
75,444
49,416
Balance at the end of the year
7,805,425
7,729,981
18. Commitments
Exploration commitments
The Company has certain obligations to perform minimum exploration work and to expend minimum amounts
of money on such work on mining tenements. These obligations may be varied from time to time subject to
approval and are expected to be fulfilled in the normal course of the operations of the Group. These
commitments have not been provided for in the accounts. Due to the nature of the Group’s operations in
exploring and evaluating areas of interest, it is difficult to accurately forecast the nature and amount of future
expenditure beyond the next year. Expenditure may be reduced by seeking exemption from individual
commitments, by relinquishment of tenure or any new joint venture arrangements. Expenditure may be
increased when new tenements are granted or joint venture agreements amended. The minimum expenditure
commitment on the tenements is:
Not later than one year
1,038,200
941,800
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
94
Consolidated
2024
2023
18. Commitments (Continued)
$
$
Operating lease commitments
Non-cancellable operating leases contracted for but not recognised
in the financial statements:
Payable – minimum lease payments
-
Not later than one year
57,087
54,199
-
After one year but not more than five years
129,956
176,024
187,043
230,223
The property lease is a non-cancellable lease with a fixed five-year term commencing 1 November 2022, with
rent payable monthly in advance. At 30 June 2024 this consists of the variable outgoings and parking licence
payments portions of the rent not recognised as a right-of-use asset.
The storage lease is currently on a month by month basis, and as a short term lease is not recognised as a
right-of-use asset.
19. Contingent Liabilities and Assets
Contingent liabilities
It is possible that native title, as defined in the Native Title Act 1993, might exist over land in which the
Company has an interest. It is not possible at this stage to quantify the impact (if any) that the existence of
native title may have on the operations of the Company. However, at the date of this report, the Directors
are aware that applications for native title claims have been accepted by the Native Title Tribunal over
tenements held by the Company.
On 19 September 2018, Wisecat Pty Ltd, a wholly owned subsidiary of the Company, completed the
acquisition of the Muchea Tenement (E70/4886) from Australian Silica Pty Ltd. Under the terms of the
acquisition, Wisecat Pty Ltd will pay Australian Silica Pty Ltd an ongoing net production royalty of 1% on
gross revenue on all product sold from minerals mined from the Muchea Tenement minus allowable
deductions.
Contingent assets
On 6 May 2021, the Company completed the sale of its wholly owned subsidiary, Ventnor Gold Pty Ltd to
NickelX Limited. Ventnor Gold Pty Ltd owns 100% of the Biranup Nickel and Gold Project tenements.
The consideration for the sale includes cash milestone payments of:
-
$200,000 upon delineation of a JORC compliant inferred resource of no less than 7.5mt at a grade of
2% nickel and 0.5% copper on the land comprising the tenements;
-
$200,000 at the completion of a feasibility study with respect to the Biranup Project demonstrating an
ability to operate it as a commercially viable enterprise, and
-
$500,000 at the first commercial extraction of any minerals, mineral products, ore or concentrates, in
whatever form, from the Biranup Project.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
95
20. Financial Reporting by Segments
The Group has identified its operating segments based on the internal reports that are used by the Board
(the chief operating decision makers) in assessing performance and in determining the allocation of
resources.
The operating segments are identified by the Board based on the phase of operation within the mining
industry. For management purposes, the Group has organised its operations into two reportable segments
on the basis of stage of development as follows:
•
Development assets
•
Exploration and evaluation assets, which includes assets that are associated with the determination
and assessment of the existence of commercial economic reserves.
The Board as a whole will regularly review the identified segments in order to allocate resources to the
segment and to assess its performance.
During the year ended 30 June 2024, the Group had no development assets. The Board considers that it has
only operated in one segment, being mineral exploration within Australia.
Where applicable, corporate costs, finance costs, interest revenue and foreign currency gains and losses are
not allocated to segments as they are not considered part of the core operations of the segments and are
managed on a Group basis.
The consolidated entity is domiciled in Australia. All revenue from external customers is generated from
Australia only. Segment revenues are allocated based on the country in which the customer is located
Revenues of approximately Nil (2023: Nil) are derived from a single external customer.
21. Related Party Transactions
(a)
Subsidiaries
The consolidated financial statements include the financial statements of VRX Silica Limited and the
subsidiaries listed in the following table.
County of
% Equity Interest
Incorporation
2024
2023
%
%
Ventnor Mining Pty Ltd
Australia
100
100
VRX Boyatup Pty Ltd
Australia
100
100
VRX Geothermal Pty Ltd
Australia
100
-
VRX Midwest Pty Ltd
Australia
100
100
Wisecat Pty Ltd
Australia
100
100
(b)
Parent entity
VRX Silica Limited is the ultimate Australian parent entity and ultimate parent of the Group.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
96
21. Related Party Transactions (Continued)
(c)
Key management personnel
Refer to the Remuneration Report contained in the Directors’ Report for details of the remuneration paid or
payable to each member of the consolidated entity’s key management personnel for the year ended 30 June
2024.
The totals of remuneration paid to key management personnel of the Company during the year are as follows:
Consolidated
2024
2023
$
$
Short-term benefits
503,270
525,384
Post-employment benefits
32,913
32,916
Share-based payments
-
187,438
536,183
745,738
Shares Issued to Key Management Personnel on Exercise of Compensation Options
Key management personnel did not exercise any options during the year or previous financial year.
Loans with Key Management Personnel
There were no loans to key management personnel or their related entities during the financial year (2023:
Nil).
Other Transactions with Key Management Personnel
Transactions between related parties are on normal commercial terms and conditions no more favourable
than those available to other parties unless otherwise stated.
In the prior year, the Group had subleased office space for $15,699 to Aruma Resources Limited, a company
Mr Paul Boyatzis was a director of during the relevant period. There were no transactions with Aruma
Resources Limited during the current year.
During the year, the fully underwritten one for thirteen pro-rata renounceable entitlement offer announced on
2 May 2024 resulted in the issue of 44,877,120 fully paid ordinary shares at $0.055 each to raise $2,468,243
(before costs), together with 22,438,625 free attaching options exercisable at $0.18 each on or before 31
August 2025. The new shares and options were issued on 29 May 2024. The directors subscribed for the
following shares and options within their entitlement:
Mr Paul Boyatzis – 320,000 shares and 160,000 options
Mr Bruce Maluish – 519,231 shares and 259,616 options
Mr David Welch – 250,000 shares and 125,000 options (after acquiring 250,000 entitlement rights on-market).
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
97
22. Parent Entity Disclosures
(a) Summary financial information
Financial Position
Parent
2024
2023
$
$
Assets
Current assets
2,424,311
1,710,604
Non-current assets
16,401,534
16,790,912
Total assets
18,825,845
18,501,516
Liabilities
Current liabilities
506,788
627,572
Non-current liabilities
247,456
337,222
Total liabilities
754,244
964,794
Equity
Issued capital
54,730,239
50,006,519
Reserves
7,805,425
7,729,981
Accumulated losses
(44,464,063)
(40,199,778)
Total equity
18,071,601
17,536,722
Financial Performance
Loss for the year
(4,264,285)
(5,060,435)
Other comprehensive income
-
-
Total comprehensive loss
(4,264,285)
(5,060,435)
(b)
Guarantees
VRX Silica Limited has not entered into any guarantees in relation to the debts of its subsidiary.
(c)
Other commitments and contingencies
VRX Silica Limited has no commitments to acquire property, plant and equipment, and has no contingent
liabilities apart from the amounts disclosed in Note 19.
(d)
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity as disclosed in
Note 1 except for the following:
● Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
● Investments in associates are accounted for at cost, less any impairment, in the parent entity.
● Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt
may be an indicator of an impairment of the investment.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
98
23. Share Based Payments
Consolidated
2024
2023
$
$
(a) Value of share-based payments in the financial statements
Expensed:
Incentive based payments to consultants:
Unlisted options
-
574,650
Incentive based payments to employees:
Unlisted options
-
366,510
Directors remuneration issued during the year ended 30 June 2022:
Unlisted options*
-
187,438
Incentive based payments to employees issued during the year ended
30 June 2022:
Unlisted options*
-
29,559
Share based payments in lieu of fees payable:
Unlisted options*
15,569
49,416
Recognised in the statement of profit or loss and other comprehensive
income
15,569
1,207,573
Capital raising costs:
Share based payments in lieu of fees payable:
Unlisted options
59,875
-
Recognised in the statement of financial position
59,875
-
Total share-based payments
75,444
1,207,573
* Amortisation of options issued in previous periods.
(b) Summary of share-based payments
Shares:
During the year, and previous financial year, no shares were issued as share based payments.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
99
23. Share Based Payments (Continued)
Options:
Set out below are the summaries of options granted as share based payments:
2024
Grant
Date
Expiry
Date
Exercise
Price
Balance
01/07/23
Granted
during the
year
Exercised
during the
year
Expired
Balance
30/06/24
Number
vested and
exercisable
23/10/19
23/10/23
$0.150
2,000,000
-
-
(2,000,000)
-
-
11/11/19
23/10/23
$0.150
500,000
-
(500,000)
-
-
-
19/08/21
31/08/24
$0.300
11,100,000
-
-
-
11,100,000
11,100,000
29/11/21
31/08/24
$0.300
15,300,000
-
-
-
15,300,000
15,300,000
07/12/21
31/08/24
$0.300
2,400,000
-
-
-
2,400,000
2,400,000
13/12/22
31/12/25
$0.200
10,000,000
-
-
-
10,000,000
10,000,000
29/05/23
31/12/26
$0.150
7,200,000
-
-
-
7,200,000
7,200,000
31/08/23
21/08/25
$0.180
-
1,250,000
-
-
1,250,000
1,250,000
48,500,000
1,250,000
(500,000)
(2,000,000)
47,250,000
47,250,000
Weighted average exercise price
$0.249
$0.180
$0.150
$0.150
$0.253
$0.253
2023
Grant
Date
Expiry
Date
Exercise
Price
Balance
01/07/22
Granted
during the
year
Exercised
during the
year
Expired
Balance
30/06/23
Number
vested and
exercisable
31/05/19
30/11/22
$0.090
4,000,000
-
(4,000,000)
-
-
-
23/10/19
23/10/23
$0.150
2,000,000
-
-
-
2,000,000
-
11/11/19
23/10/23
$0.150
500,000
-
-
-
500,000
500,000
19/08/21
31/08/24
$0.300
11,100,000
-
-
-
11,100,000
11,100,000
29/11/21
31/08/24
$0.300
15,300,000
-
-
-
15,300,000
15,300,000
07/12/21
31/08/24
$0.300
2,400,000
-
-
-
2,400,000
2,400,000
13/12/22
31/12/25
$0.200
-
10,000,000
-
-
10,000,000
10,000,000
29/05/23
31/12/26
$0.150
-
7,200,000
-
-
7,200,000
7,200,000
35,300,000
17,200,000
(4,000,000)
-
48,500,000
46,500,000
Weighted average exercise price
$0.266
$0.179
$0.090
-
$0.249
$0.254
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
100
23. Share Based Payments (Continued)
The value of options incurred as share-based payments are as follows:
2024
Value per
Option
Number of
Options
$
Options granted during the period:
Unlisted options exercisable at $0.18 each on or before 31 August
2025, issued for legal fees and vesting on issue.
$0.0479
1,250,000
59,875
Amortisation of options granted in prior periods:
Value of options previously issued as part of financial advisory fees
to Argonaut Capital Limited, expensed during the year.
15,569
75,444
2023
Value per
Option
Number of
Options
$
Options granted during the period:
Unlisted options exercisable at $0.20 each on or before 31
December 2025, issued to consultants and employees and vesting
on issue.
$0.0543
10,000,000
543,000
Unlisted options exercisable at $0.15 each on or before 31
December 2026, issued to consultants and employees and vesting
on issue.
$0.0553
7,200,000
398,160
Amortisation of options granted in prior periods:
Value of options previously issued to the Directors, expensed
during the year.
187,438
Value of options previously issued to employees, expensed during
the year.
29,559
Value of options previously issued as part of financial advisory fees
to Argonaut Capital Limited, expensed during the year.
49,416
1,207,573
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
101
23. Share Based Payments (Continued)
Where deferred vesting options are subject to milestones or vesting dates, probability of achieving those
milestones or vesting dates have been assessed at 100% unless otherwise stated.
On 31 August 2023, 1,250,000 unlisted options were granted in lieu of legal fees in relation to the share
placement and share purchase plan and were issued for nil consideration. The options were valued using the
Hoadley ESO2 binomial valuation model using an underlying share price of $0.12, volatility of 100%, interest
rate of 3.82%, an early exercise multiple of 2.5x and nil dividend yield.
The 10,000,000 unlisted options granted to consultants and employees on 13 December 2022 were for nil
consideration. The options were valued using the Hoadley ESO2 binomial valuation model using an
underlying share price of $0.12, volatility of 100%, interest rate of 3.12%, early exercise multiple of 2.5x and
nil dividend yield.
On 29 May 2023, 7,200,000 unlisted options were granted to consultants and employees for nil consideration.
The options were valued using the Hoadley ESO2 binomial valuation model using an underlying share price
of $0.11, volatility of 100%, interest rate of 3.43%, early exercise multiple of 2.5x and nil dividend yield.
Unlisted options granted on 23 October 2019, exercisable at $0.15 each on or before 23 October 2023, were
issued as part of financial advisory fees to Argonaut Capital Limited, with the following vesting criteria
applying:
Tranche 1 – 1,000,000 options - no vesting criteria, exercisable from date of issue.
Tranche 2 – 1,000,000 options - exercisable only after the receipt of credit approval in respect of any
transaction (or series of transactions) that in aggregate contemplate the issuance of debt financing of at least
$20 million to the Company.
Tranche 3 – 1,000,000 options - exercisable only after the raising of sufficient capital, including debt or equity
or other financing, to fully fund construction of the first of one of the Arrowsmith Silica Sand Projects or the
Muchea Silica Sand Project.
The options were issued for $300 consideration and vest upon the satisfaction of milestones considered to
be non-market factors. The options were valued using the Black-Scholes model using an underlying share
price of $0.145, volatility of 100%, nil dividend yield and an interest rate of 0.745%.
The weighted average remaining contractual life of share-based payment options that were outstanding as
at 30 June 2024 was 0.834 years (2023: 1.750 years).
The weighted average fair value of share-based payment options granted during the year was $0.04790 each
(2023: $0.05472).
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
102
24. Financial Risk Management
The consolidated entity’s principal financial instruments comprise receivables, payables, loans, cash and
short-term deposits. The consolidated entity manages its exposure to key financial risks in accordance with
the consolidated entity’s financial risk management policy. The objective of the policy is to support the delivery
of the consolidated entity’s financial targets while protecting future financial security.
The main risks arising from the consolidated entity’s financial instruments are interest rate risk, credit risk and
liquidity risk. The consolidated entity does not speculate in the trading of derivative instruments. The
consolidated entity uses different methods to measure and manage different types of risks to which it is
exposed. These include monitoring levels of exposure to interest rates and assessments of market forecasts
for interest rates. Ageing analysis of and monitoring of receivables are undertaken to manage credit risk,
liquidity risk is monitored through the development of future rolling cash flow forecasts.
The Board reviews and agrees policies for managing each of these risks as summarised below.
Primary responsibility for identification and control of financial risks rests with the Board. The Board reviews
and agrees policies for managing each of the risks identified below, including for interest rate risk, credit
allowances and cash flow forecast projections.
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the
basis of measurement and the basis on which income and expenses are recognised, in respect of each class
of financial asset and financial liability are disclosed in Note 1 to the financial statements.
Risk Exposures and Responses
Interest Rate Risk
The consolidated entity’s exposure to risks of changes in market interest rates relates primarily to the
consolidated entity’s cash balances. The consolidated entity constantly analyses its interest rate exposure.
Within this analysis consideration is given to potential renewals of existing positions, alternative financing
positions and the mix of fixed and variable interest rates. As the Company has no variable interest rate bearing
borrowings its exposure to interest rate movements is limited to the amount of interest income it can potentially
earn on surplus cash deposits. The following sensitivity analysis is based on the interest rate risk exposures
in existence at the reporting date.
At balance date, the consolidated entity had the following financial assets exposed to variable interest rates
that are not designated in cash flow hedges:
Consolidated
2024
2023
$
$
Financial Assets
Cash and cash equivalents (interest-bearing accounts)
2,115,880
1,450,370
Net exposure
2,115,880
1,450,370
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
103
24. Financial Risk Management (Continued)
The following sensitivity analysis is based on the interest rate risk exposures in existence at the reporting
date.
At 30 June, if interest rates had moved, as illustrated in the table below, with all other variables held constant,
post tax profit and equity relating to financial assets of the consolidated entity would have been affected as
follows:
Consolidated
2024
2023
$
$
Judgements of reasonably possible movements:
Post tax profit – higher / (lower)
+ 0.05%
1,058
725
- 0.05%
(1,058)
(725)
Equity – higher / (lower)
+ 0.05%
1,058
725
- 0.05%
(1,058)
(725)
Liquidity Risk
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use
of loans and other available credit lines.
The consolidated entity manages liquidity risk by monitoring immediate and forecast cash requirements and
ensuring adequate cash reserves are maintained.
Credit risk
Credit risk arises from the financial assets of the consolidated entity, which comprise deposits with banks and
trade and other receivables. The consolidated entity’s exposure to credit risk arises from potential default of
the counter party, with the maximum exposure equal to the carrying amount of these instruments. The
carrying amount of financial assets included in the statement of financial position represents the consolidated
entity’s maximum exposure to credit risk in relation to those assets.
The consolidated entity does not hold any credit derivatives to offset its credit exposure.
The consolidated entity trades only with recognised, credit worthy third parties and as such collateral is not
requested nor is it the consolidated entity’s policy to secure its trade and other receivables.
The consolidated entity has adopted a lifetime expected loss allowance in estimating expected credit losses
to trade receivables through the use of a provisions matrix using fixed rates of credit loss provisioning.
Receivable balances are monitored on an ongoing basis with the result that the consolidated entity does not
have a significant exposure to bad debts.
The consolidated entity’s cash deposits are held with a major Australian banking institution otherwise, there
are no significant concentrations of credit risk within the consolidated entity.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
104
24. Financial Risk Management (Continued)
The following table details the expected maturity of the Group’s financial assets and liabilities based on the
earliest date of maturity or payment respectively. The amounts are stated on an undiscounted basis and
include interest.
Consolidated
Weighted
average
effective
interest rate
%
Less than 1
month
$
1 – 3
Months
$
3 months
– 1 year
$
1 – 5 years
$
2024
Financial Assets:
Non-interest bearing
-
331,330
-
2,583
156,250
Variable interest rate
1.25
2,115,880
-
-
-
Fixed interest rate
4.93
-
-
-
93,588
2,447,210
-
2,583
249,838
Financial Liabilities:
Non-interest bearing
-
513,070
-
-
-
Fixed interest rate
6.85
7,078
21,471
61,217
247,456
520,148
21,471
61,217
247,456
2023
Financial Assets:
Non-interest bearing
-
294,032
-
2,583
443,750
Variable interest rate
1.35
1,450,370
-
-
-
Fixed interest rate
4.42
-
-
-
90,572
1,744,402
-
2,583
534,322
Financial Liabilities:
Non-interest bearing
-
381,685
-
-
-
Fixed interest rate
6.85
6,370
19,322
55,242
337,222
388,055
19,322
55,242
337,222
Capital Management Risk
Management controls the capital of the consolidated entity in order to maximise the return to shareholders
and ensure that the Group can fund its operations and continue as a going concern.
Management effectively manages the Group’s capital by assessing the consolidated entity’s financial risks
and adjusting its capital structure in response to changes in these risks and in the market. These responses
include the management of expenditure and debt levels and share and option issues.
There have been no changes in the strategy adopted by management to control capital of the consolidated
entity since the prior year.
Equity Price Risk
The consolidated entity’s investment in listed equity securities are susceptible to market price risk arising
from uncertainties about future values of the investment securities.
At the reporting date, the consolidated entity’s exposure to listed equity securities at fair value was $156,250
(2023: $443,750). A decrease of 10% (2023: 10%) on the share prices could have an impact of approximately
$15,625 (2023: $44,375) on the profit or loss attributable to the consolidated entity.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
105
24. Financial Risk Management (Continued)
Commodity Price and Foreign Currency Risk
The consolidated entity’s exposure to price and currency risk is minimal given the consolidated entity is still
in the exploration phase.
25. Fair Value Measurement
Fair value hierarchy
The following tables detail the consolidated entity's assets and liabilities, measured or disclosed at fair value,
using a three-level hierarchy, based on the lowest level of input that is significant to the entire fair value
measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can
access at the measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly
Level 3: Unobservable inputs for the asset or liability
Assets and liabilities held for sale are measured at fair value on a non-recurring basis.
There were no transfers between levels during the financial year.
The carrying amounts of trade and other receivables and trade and other payables are assumed to
approximate their fair values due to their short-term nature.
Level 1
Level 2
Level 3
Total
$
$
$
$
2024
Assets
Ordinary shares at fair value through profit or loss
150,000
-
-
150,000
Share options at fair value through profit or loss
6,250
-
-
6,250
Total assets
156,250
-
-
156,250
2023
Assets
Ordinary shares at fair value through profit or loss
418,750
-
-
418,750
Share options at fair value through profit or loss
25,000
-
-
25,000
Total assets
443,750
-
-
443,750
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
VRX Silica Limited
106
26. Events Subsequent to Year End
Employee and Consultant Options
On 6 August 2024, the Company issued 17,000,000 options exercisable at 5.5 cents each on or before 31
December 2027, to employees and consultants for no consideration.
Expiry of Options
28,800,000 options exercisable at 30 cents each expired on 31 August 2024.
Other than the above, there are no other matters or circumstances that have arisen since 30 June 2024 that
have or may significantly affect the operations, results, or state of affairs of the consolidated entity in future
financial years.
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
AS AT 30 JUNE 2024
VRX Silica Limited
107
Name of Entity
Type of Entity
Place Formed or
Incorporated
Percentage
of Share
Capital Held
Tax
Residency
VRX Silica Limited
Body corporate
Australia
n/a
Australia
Ventnor Mining Pty Ltd
Body corporate
Australia
100%
Australia
VRX Boyatup Pty Ltd
Body corporate
Australia
100%
Australia
VRX Geothermal Pty Ltd
Body corporate
Australia
100%
Australia
VRX Midwest Pty Ltd
Body corporate
Australia
100%
Australia
Wisecat Pty Ltd
Body corporate
Australia
100%
Australia
At the end of the financial year, no entity within the consolidated entity was a trustee of a trust within the
consolidated entity, a partner in a partnership within the consolidated entity, or a participant in a joint venture
within the consolidated entity.
DIRECTORS' DECLARATION
VRX Silica Limited
108
The directors of the Company declare that:
1.
The financial statements and notes, are in accordance with the Corporations Act 2001 and:
a.
Comply with Accounting Standards, which, as stated in accounting policy Note 1(c) to the financial
statements, constitutes explicit and unreserved compliance with International Financial Reporting
Standards (IFRS); and
b.
Give a true and fair view of the Consolidated Entity’s financial position as at 30 June 2024 and of
its performance for the year ended on that date;
2.
In the directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable.
3.
The information disclosed in the attached consolidated entity disclosure statement is true and correct.
4.
The directors have been given the declarations required by s295A of the Corporation Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations
Act 2001.
Bruce Maluish
Director
Perth, 26 September 2024
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the
members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm
which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
RSM Australia Partners
Level 32 Exchange Tower, 2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
www.rsm.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF THE VRX SILICA LIMITED
Opinion
We have audited the financial report of VRX Silica Limited (the Company) and its subsidiaries (the Group), which
comprises the consolidated statement of financial position as at 30 June 2024, the consolidated statement of profit
or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, and notes to the financial statements, including material
accounting policy information, the consolidated entity disclosure statement and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
Giving a true and fair view of the Group's financial position as at 30 June 2024 and of its financial
performance for the year then ended; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How our audit addressed this matter
Deferred Exploration Expenditure
Refer to Note 11 in the financial statements
The Group has capitalised deferred exploration
expenditure with a carrying value of $13,620,303 as
at 30 June 2024.
We considered this to be a key audit matter due to
the significant management judgments involved in
assessing the carrying value of the assets including:
•
Determination of whether the exploration and
evaluation expenditure can be associated with
finding specific mineral resources, and the basis
on which that expenditure is allocated to an area
of interest;
•
Assessing whether any indicators of impairment
are present and if so, judgement applied to
determined and quantify any impairment loss;
and
•
Assessing whether exploration activities have
reached a stage at which the existence of an
economically recoverable reserves may be
determined.
Our audit procedures included:
•
Assessing the Group’s accounting policy for
compliance with Australian Accounting
Standards;
•
Assessing whether the rights to tenure of those
areas of interest are current;
•
Testing a sample of additions to supporting
documentation and assessing whether the
amounts capitalised during the year are in
compliance with the Group’s accounting policy
and relate to the relevant area of interest;
•
Enquiring with management and reading budgets
and other documentation as evidence that active
and significant operations in, or relation to, the
relevant area of interests will be continued in the
future;
•
Assessing and evaluating management’s
determination that exploration activities have not
yet progressed to the stage where the existence
or otherwise of economically recoverable
reserves may be determined;
•
Assessing and evaluating management’s
assessment of whether indicators of impairment
existed at the reporting date; and
•
Assessing the appropriateness of the disclosures
in the financial statements.
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 30 June 2024 but does not include the financial report and the
auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of:
a.
the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view
in accordance with Australian Accounting Standards and the Corporations Act 2001; and
b.
the consolidated entity disclosure statement that is true and correct in accordance with the Corporations
Act 2001;
and for such internal control as the directors determine is necessary to enable the preparation of:
i.
the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view
and is free from material misstatement, whether due to fraud or error; and
ii.
the consolidated entity disclosure statement that is true and correct and is free of misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar2_2020.pdf. This
description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2024.
In our opinion, the Remuneration Report of VRX Silica Limited, for the year ended 30 June 2024, complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
RSM AUSTRALIA
Perth, WA
ALASDAIR WHYTE
Dated: 26 September 2024
Partner
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the
members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm
which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
RSM Australia Partners
Level 32 Exchange Tower, 2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of VRX Silica Limited for the year ended 30 June 2024, I declare
that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA
Perth, WA
ALASDAIR WHYTE
Dated: 26 September 2024
Partner
SECURITIES EXCHANGE INFORMATION
VRX Silica Limited
114
HOLDINGS AS AT 17 SEPTEMBER 2024
Listed Securities
Fully paid ordinary shares
Number of Securities Held
No. of
Holders
No. of
Shares
% Total
Shares
1
to
1,000
1,001
to
5,000
5,001
to
10,000
10,001
to
100,000
100,001 and over
107
698
514
1,636
735
26,192
2,250,414
4,114,441
63,874,917
557,989,704
0.00
0.36
0.65
10.17
88.82
Total
3,690
628,255,668
100.00
Number of holders of less
than a marketable parcel
1,662
11,002,312
Unlisted Securities - Options
Exercise Price
$0.20
$0.15
Expiry Date
31/12/2025
31/12/2026
Number of Securities Held
No. of
Holders
No. of
Options
% Total
Options
No. of
Holders
No. of
Options
% Total
Options
1
to
1,000
1,001
to
5,000
5,001
to
10,000
10,001
to
100,000
100,001 and over
7
10,000,000
100.00
8
7,200,000
100.00
Total
7
10,000,000
100.00
8
7,200,000
100.00
Exercise Price
$0.18
$0.018
Expiry Date
31/08/2025
31/12/2025
Number of Securities Held
No. of
Holders
No. of
Options
% Total
Options
No. of
Holders
No. of
Options
% Total
Options
1
to
1,000
1,001
to
5,000
5,001
to
10,000
10,001
to
100,000
100,001 and over
1
1,250,000
100.00
80
78
99
157
120
35,322
230,856
803,187
6,578,190
48,687,093
0.06
0.41
1.43
11.68
86.42
Total
1
1,250,000
100.00
534
56,334,648
100.00
Exercise Price
$0.055
Expiry Date
31/12/2027
Number of Securities Held
No. of
Holders
No. of
Options
% Total
Options
1
to
1,000
1,001
to
5,000
5,001
to
10,000
10,001
to
100,000
100,001 and over
6
17,000,000
100.00
Total
6
17,000,000
100.00
SECURITIES EXCHANGE INFORMATION
VRX Silica Limited
115
Substantial Shareholders
The company has been notified of the following substantial shareholdings:
Name Number of Shares
% of Total Shares on Issue
Sparta AG 51,100,000 8.92%
Voting Rights
The Constitution of the company makes the following provision for voting at general meetings:
On a show of hands, every ordinary shareholder present in person, or by proxy, attorney or representative has one vote.
On a poll, every shareholder present in person, or by proxy, attorney or representative has one vote for any share held
by the shareholder.
20 Largest Holders of Securities as at 17 September 2024:
Fully paid ordinary shares
Number
%
1.
SPARTA AG
56,046,210
8.92
2.
MR MICHELE GALEA
15,046,237
2.39
3.
MOSCH PTY LTD
13,333,332
2.12
4.
PARLIN INVESTMENTS PTY LTD
11,958,848
1.90
5.
GOLDFIRE ENTERPRISES PTY LTD
11,217,124
1.79
6.
MR MICHELE GALEA
8,000,000
1.27
7.
MORKIM PTY LTD
7,650,000
1.22
8.
MASH SUPER PTY LTD
7,269,231
1.16
9.
AUSTRALIAN INTERNATIONAL SERVICES PTY LTD
7,237,560
1.15
10.
MR BRUCE DENNIS MALUISH
7,060,535
1.12
11.
CITICORP NOMINEES PTY LIMITED
6,771,597
1.08
12.
AUSTRALIAN SILICA PTY LTD
6,542,754
1.04
13.
MR JOHN CHARLES GEARY
6,000,000
0.96
14.
LESUER PTY LTD
5,500,000
0.88
15.
ANDREW MALUISH SUPER PTY LTD
5,420,000
0.86
16.
HAVEN SUPER PTY LTD
5,383,437
0.86
17.
VAULT (WA) PTY LTD
5,125,000
0.82
18.
SURPION PTY LTD
5,115,385
0.81
19.
AURO PTY LTD
4,850,000
0.77
20.
MR CHRISTOPHER PAUL GRAY
4,714,233
0.75
200,241,483
31.87
SECURITIES EXCHANGE INFORMATION
VRX Silica Limited
116
Unlisted Options
Details of unlisted option holders are as follows:
Class of unlisted options
Number
of
Options
Number
of
Holders
Options exercisable at 20 cents each on or before 31 December 2025
10,000,000
7
Holdings of more than 20% of this class
-
Parlin Investments Pty Ltd
2,000,000
Options exercisable at 15 cents each on or before 31 December 2026
7,200,000
8
Holdings of more than 20% of this class
-
Parlin Investments Pty Ltd
1,500,000
Options exercisable at 18 cents each on or before 31 August 2025
1,250,000
1
Holdings of more than 20% of this class
-
Parlin Investments Pty Ltd
1,250,000
Options exercisable at 18 cents each on or before 31 August 2025
56,334,648
534
No holdings of more than 20% of this class
Options exercisable at 5.5 cents each on or before 31 December 2027
17,000,000
6
Holdings of more than 20% of this class
-
Parlin Investments Pty Ltd
6,000,000
-
Ryan Lee Baxter
4,000,000
Restricted Securities
The company does not have any restricted securities on issue as at the date of this report.
On-market Buy-back
Currently there is no on-market buy-back of the Company’s securities.
Consistency with business objectives
The company has used its cash and assets in a form readily convertible to cash that it had at the time of listing in a way
consistent with its stated business objectives.
INTERESTS IN MINING TENEMENTS
VRX Silica Limited
117
WESTERN AUSTRALIA
Arrowsmith Project – Silica
Tenement
Status
Holder / Applicant
Interest (%)
E70/4987
Granted
Ventnor Mining Pty Ltd
100
E70/5027
Granted
Ventnor Mining Pty Ltd
100
E70/5817
Granted
Ventnor Mining Pty Ltd
100
M70/1389
Granted
Ventnor Mining Pty Ltd
100
M70/1392
Granted
Ventnor Mining Pty Ltd
100
M70/1418
Granted
Ventnor Mining Pty Ltd
100
L70/198
Granted
Ventnor Mining Pty Ltd
100
L70/199
Granted
Ventnor Mining Pty Ltd
100
L70/202
Granted
Ventnor Mining Pty Ltd
100
L70/203
Granted
Ventnor Mining Pty Ltd
100
L70/208
Granted
Ventnor Mining Pty Ltd
100
L70/229
Application
Ventnor Mining Pty Ltd
100
L70/230
Granted
Ventnor Mining Pty Ltd
100
G70/264
Granted
Ventnor Mining Pty Ltd
100
G70/265
Granted
Ventnor Mining Pty Ltd
100
Muchea Project – Silica
Tenement
Status
Holder / Applicant
Interest (%)
E70/4886
Granted
Wisecat Pty Ltd
100
E70/5157
Granted
Wisecat Pty Ltd
100
E70/5651
Application
Wisecat Pty Ltd
100
M70/1390
Granted
Wisecat Pty Ltd
100
M70/1414
Application
Wisecat Pty Ltd
100
L70/200
Granted
Wisecat Pty Ltd
100
L70/204
Granted
Wisecat Pty Ltd
100
L70/205
Application
Wisecat Pty Ltd
100
L70/206
Granted
Wisecat Pty Ltd
100
Boyatup Project – Silica
Tenement
Status
Holder / Applicant
Interest (%)
E69/3560
Granted
VRX Boyatup Pty Ltd
100
Dandaragan Project
Tenement
Status
Holder / Applicant
Interest (%)
E70/6501
Granted
VRX Midwest Pty Ltd
100