Australian Silica Quartz Group (ASX:ASQ) has entered into a binding project development heads of agreement with Private Energy Partners (PEP) on ASQ’s 100% owned Quartz Hill MGSi Quartz Project in North Queensland.
Under the deal, $1 million is to be paid to ASQ as a fee for the exclusive right to purchase 10 million tonnes of MGSi Quartz (metallurgical grade silicon quartz lump feedstock) from the mine gate.
The agreement stipulates that PEP, wholly owned affiliate of Quinbrook Infrastructure Partners, will receive a 10% discount to the prevailing MGSi Quartz market price or such price that would constitute a fair market return to ASQ (whichever is the greater).
ASQ will use the funds received to undertake an exploration drilling program at Quartz Hill with the aim of establishing JORC 2012 MGSi Quartz mineral resource of at least 10Mt; a Scoping Study and apply for a mining lease within a period of 1 year; at the conclusion of the Scoping Study, PEP at its election, may fund a Definitive Feasiblity Study on the MGSi Project.
Also, PEP may then enter into a binding offtake agreement to purchase 10Mt MGSi Quartz over a period not exceeding 31 years. PEP’s critical minerals team have made an exploratory visit to Quartz Hill.
As part of the due diligence Process and met ASQ’s management team prior to the agreement being signed.
ASQ has also completed heritage surveys at Quartz Hill ahead of its planned mid-2023 drilling program planned.
The company reports it has 3 granted exploration permits in North Queensland with known quartz occurrences with the potential to contain ‘high-grade’ and high purity silica.
Testwork of rock chip samples from North Queensland on granted tenements has returned results up to 99.99% SiO2 after acid washing.
The Queensland quartz projects have been a focus for ASQ in 2023. Within the 3 granted, 100% owned, exploration permits are a number of significant quartz occurrences. The most advanced of these prospects are known as White Springs and Quartz Hill.
Quartz Hill is one of several large masses of epithermal quartz within EPM 26702, 10km north west of Mt Surprise in Far North Queensland. ASQ and PEP consider Quartz Hill to have potential as a source of lump quartz feedstock for silicon metal production.
ASQ has a $13.23 million market capitalisation.
Write to Adam Orlando at Mining.com.au
Images: Australian Silica Quartz Group Ltd
