VRX Silica : Quarterly Activities Report

30 October 2020

Quarterly Activities Report

The following is a summary of the activities conducted by VRX Silica Ltd (VRX Silica or Company) (ASX: VRX) during the quarter ending 30 September 2020.

Arrowsmith Silica Sand Projects

Figure 1:Arrowsmith Projects Location

VRX Silica holds the Arrowsmith North and Arrowsmith Central Silica Sand Projects (Arrowsmith Projects), which are located 270km north of Perth, in its wholly owned subsidiary Ventnor Mining Pty Ltd (VMPL).

On 15 July 2020 VRX Silica announced it had received confirmation that the

terms of its proposed Mining Project Agreement covering the areas of the Arrowsmith Projects have been approved by the Working Group for the Southern Yamatji People, Native Title claimants over the project areas.1 This confirmation preceded the formal requirement for execution by all 12 individual Native Title Applicants along with a separate State Deed between those individuals, VMPL and the State.

During the quarter the Company continued as part of the environmental approvals process for the grant of a Mining Permit at the Arrowsmith Projects to compile necessary data to support referrals to the Federal Department of Agriculture, Water and Environment (DAWE) and the State Environmental Protection Authority (EPA). The Company and its environmental consultants held pre-referral meetings with representatives from DAWE and received valuable feedback as to requirements for the referral.

The Company has continued discussions with potential customers in Asia for long-term contracts for offtake of products from both its Arrowsmith Projects. These customers are in Malaysia, Thailand, Taiwan and South Korea. The outbreak of COVID-19 ceased all possible face to face meetings with potential clients however the Company has progressed discussions via video conferencing and interest remains strong despite the current economic climate in those countries.

Muchea Silica Sand Project

VRX Silica holds the Muchea Silica Sand Project (Muchea Project), which is located 50km north of Perth, in its wholly owned subsidiary Wisecat Pty Ltd (Wisecat).

During the quarter, pending grant of a Mining Lease for the Muchea Project following Native Title clearance having been received in the June quarter, as for its Arrowsmith Projects the Company progressed compilation of necessary data to support referrals to DAWE and the EPA with pre-referral meetings held with representatives from DAWE.

The Company has also continued discussions with potential customers in Asia for long-term contracts for offtake of products from Muchea Project. Interest remains strong.

1 ASX Announcement 15 July 2020

Figure 2:Muchea Project Location

Biranup Project

On 1 July 2020 VRX Silica announced it had entered into a conditional agreement with New Energy Metals Limited (NEM) for the sale of its wholly-owned subsidiary and holder of the Biranup base metals and gold project (Biranup Project), Ventnor Gold Pty Ltd.2

NEM is an unlisted public company planning an Initial Public Offering (IPO) and ASX listing later this year. NEM has indicated that it will prioritise applications in the IPO from VRX Silica shareholders. The terms for the sale of the Biranup Project will enable VRX Silica to share in any future exploration success which is an ideal outcome for VRX Silica and its shareholders.

Figure 3:Biranup Tenements

2 ASX Announcement 1 July 2020