Ann: Annual Report, page-2

Silica Sand Offtake
The Company has continued discussions with potential customers in Asia for long-term contracts for offtake
of products from its Arrowsmith Projects and Muchea Project. These customers are in Malaysia, Thailand,
Taiwan, Japan and South Korea.
The outbreak of COVID-19 in early 2020 caused the cessation of 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 challenging health and economic climate in those countries. More recently
second and third-wave lockdowns in Japan and Korea have further postponed offtake discussions, with no
possibility for VRX to conduct face-to-face meetings.
Despite the COVID-19 impediment, global market conditions continued to improve over the period. Sources
of supply of high-quality silica sand throughout the Asian region are shrinking at a rapid rate and increasing
the already strong demand for silica sand products capable of production from VRX’s projects, providing the
Company with comfort its considered and disciplined approach to offtake deals will deliver significant value to
shareholders.
Product samples have been shipped to potential offtake partners and grade-control drilling conducted during
March 2021 generated additional commercial samples for interested parties. The majority of recipients have
confirmed that the sand quality meets their specification requirements and underpins their desire to secure
long-term supply.
Interest in the Company’s products from Arrowsmith North remains incredibly strong and continues to grow.
Demand for significant bulk samples for final furnace testing, which is regarded as the last quality assurance
test before supply contracts are agreed with potential offtake partners in South Korea, Japan and Taiwan,
has led the Company to undertake a substantial pilot plant-scale testwork program on 1 tonne of Arrowsmith
North ore. Some samples have been dispatched and further samples are waiting on final PSD and assays. It
will also enable the Company to further test the project’s process circuit design.
The Company is well-positioned to benefit from the rapidly changing, and improving, market conditions and
will continue negotiations to secure formal offtake agreements.