Australian Silica Quartz Group (ASX:ASQ) has received a $1 million fee from Private Energy Partners under a development heads of agreement (HoA) for the Quartz Hill Metallurgical Grade Silicon (MGSi) Project in North Queensland.
The company reports the fee is for the exclusive right to purchase 10 million tonnes of metallurgical-grade silicon quartz lump feedstock (MGSi Quartz) from the mine gate at Quartz Hill at a 10% discount to the prevailing MGSi Quartz market price or a price that constitutes a ‘fair’ market return for Australian Silica.
The funds will be used to conduct an exploration drilling program at Quartz Hill with the aim of establishing an MGSi Quartz mineral resource of at least 10 million tonnes, as well as a Scoping Study and application for a mining lease within a year of signing the agreement.
Australian Silica reports planning for this drilling program is underway, and work is set to begin in the September quarter
Australian Silica reports planning for this drilling program is underway, and work is set to begin in the September quarter.
Once the Scoping Study is complete, Private Energy Partners can fund a Definitive Feasibility Study (DFS) for the project, which may be followed by a binding offtake agreement to purchase 10 million tonnes of MSGi over 31 years.
On 7 July 2023, the company entered the binding development HoA with Private Energy Partners, which is a wholly owned affiliate of investment manager Quinbrook Infrastructure Partners.
As part of the due diligence process, Private Energy Partners’ critical minerals team made an exploratory visit to Quartz Hill and met with Australian Silica’s management team before signing the HoA.
Australian Silica Quartz Group is an ASX-listed explorer focused on its hard rock quartz and ‘high-grade’ silica sands projects across Australia. These assets include the Seabrook hard rock quartz and Gingin, Esperance, and Albany silica sands projects in Western Australia, along with the Quartz Hill and White Springs hard rock quartz projects in Queensland.
The company had $3.42 million cash at hand and no debt on 31 March 2023, according to its latest quarterly report published on 28 April 2023.
Write to Harry Mulholland at Mining.com.au
Images: Australian Silica Quartz Group Ltd
