Join our daily newsletter At The Bell to receive exclusive market insights
- Suvo Strategic Minerals (SUV) makes a play for a silica sands project in Western Australia in an all-scrip deal worth over $1.5 million
- The company is looking to purchase a mining tenement home to the White Hill Silica Sand Project near Muchea as demand for silica sand rises around the globe
- Under the proposed deal, Suvo will issue the sellers $1.55 million worth of shares, over 330,000 SUV options, and a 4 per cent royalty on any products sold from White Hill
- The project adjoins fellow ASX-listed VRX Silica’s (VRX) Muchea project, where VRX has reported high-quality grades of silica sand over large volumes
- Shares in Suvo Strategic Minerals are down 3.57 per cent to 13.5 cents at 2:15pm AEDT
Suvo Strategic Minerals (SUV) is making a play for a fresh silica sands project in Western Australia in an all-scrip deal worth over $1.5 million.
The junior mining company is looking to purchase a mining tenement which is home to the White Hill Silica Sand Project near Muchea, subject to certain conditions and shareholder approval.
Under the proposed deal, Suvo will issue the vendors $1.55 million worth of shares in two tranches based on some key development milestones. Suvo will also give the sellers a 4 per cent royalty of the sales of products derived from the White Hill project, as well as 333,334 SUV options, exercisable at 0.15 within three years.
The project adjoins fellow ASX-listed VRX Silica’s (VRX) Muchea project.
Suvo Executive Chairman Robert Martin said to lock in the purchase of the tenement would be a “significant outcome” for the company and its shareholders.
“Our neighbours to the east have reported significant high-quality grades over large volumes and we believe that the dune system that is producing this continues through this tenement,” Mr Martin said.
“We are excited to progress this project and to test its potential to provide material suitable to meet the stringent requirements for high-end materials including inputs for specialty glass for solar panels and mobile phones, as well as high-capacity lithium-ion rechargeable batteries.”
Why the buy?
Suvo said the White Hill project, which spans an area of 47 square kilometres, is highly prospective for high-quality silica sand.
Demand for the product is on the rise, according to the company, given its use in areas like glass manufacturing, solar panels, foundry materials, ceramics and paints.
“The growth of these industries has recently been hampered as a result of the difficulties caused by COVID-19 which has limited transportation and production across the globe,” Suvo said in an announcement to the ASX.
“As a result, governments have been active in trying to increase the production of commodities and get their revenue generation back on track. This is forecast to continue to provide growth to the silica sand market.”
Suvo said according to India-based research firm Up Market Research, the Asia Pacific silica sand market was worth US$5.3 billion (A$7.3 billion) in 2019 and is projected to top US$8.3 billion (A$11 billion) by 2027.
“Demand for silica sand is growing rapidly in accordance with the growth of the glass materials industry,” Suvo said.
Suvo already owns the Nova Silica Sands project near Eneabba in WA, meaning the White Hill project will expand its local silica sand operations.
The company also owns the White Cloud Kaolin Project 210km north of Perth.
Shares in Suvo Strategic Minerals were down 3.57 per cent to 13.5 cents each at 2:15pm AEDT.
