Silica Sand prices for low Fe impurity, page-5

It looks like my original post about sand prices has been moderated (off topic), which is very surprising !!!!
So I have removed any reference to anything "off topic", to leave the details about the sand pricing
that is directly relevant to the intrinsic value of our low iron impurity deposit at Murchea:
I'll just say that the info comes from a publicly available source, (an ASX ann yesterday)

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2.1.6 Pricing assumptions
The price of silica sand varies according to the product grade and geographic region of end use. The main
(but not only) determinant of silica sand product grade is the concentration of Fe2O3 in the final end-product,
measured in parts per million (ppm).
The lower the ppm grade level, the higher the purity level of the silica sand.
In 2019, silica sand with 150–200 ppm recorded a price of between US$102.30 in China and US$184.50
per metric ton in Japan (refer Figure 2.11).
A very high purity silica sand of lowest ppm grade has become one of today’s key strategic minerals with
applications in high-tech industries including semiconductors, high temperature lamp tubing, telecommunications
and optics, microelectronics and solar silicon applications. Due to its varied applicability, the demand for
respective grade level has been increasing over the years, resulting in a consistent increase in its prices since
2017. CompanyX metallurgical testing has not demonstrated an ability to service this market, although
additional testing is underway to test BehXXX silica sand for its suitability for this higher priced market.
BehXXX metallurgical testwork to date has confirmed the BehXXX end-product to be suitable for sale into the
200–300 ppm Fe2O3 markets in the APAC region. This market is a higher volume market which attracts lower
pricing than the 150–200 ppm Fe2O3 markets, although still represents a compelling sales price and generates
strong margins for the BehXXX Project.
In 2019, silica sand with 200–300 ppm Fe2O3 recorded a price of between US$41.10 in China and US$71.60
per metric ton in Japan (refer Figure 2.12).
CompanyX has a strategy to optimise the potential revenue per ton from the BehXXXX Project and will continue
to explore options for upgrading of product to achieve the premium prices enjoyed in the 150–200 ppm
Fe2O3 silica sand markets.
As the BehXXXX products fall in the 200–300 ppm range in relation to Fe2O3, based on the above and advice
provided by industry experts, CompanyX is confident that a sell price of US$50 per metric ton FOB Geraldton
and above is achievable (Source: IMARC Report SR090221K2).


CompanyX essentially says they can't produce 150-200 ppm silica sand, only sand with 200-300 ppm.
But VRX can produce this lower impurity grade from Murchea. Actually the Murchea BFS says the
Fe impurities are even lower at 80ppm, and 150ppm. So that suggest the higher pricing would apply.
From fig 2.11, the 2021 pricing for 150ppm-200ppm is ~US$115/t (China), ~US$135/t (Korea), ~US$195/t (Japan).
This might explain why VRX's recent announcements about potential offtake partners are
mentioning Japan and Korea rather than China. These numbers are a huge increase over the
numbers in our DFS for Murchea (A$42/t-$55/t), something of order three or four times larger.
I think in an earlier post, someone mentioned that Bruce talked about a possible profit margin
of A$60/t for Muchea at the last AGM, so this would begin to make sense). But the margins
would be a great deal higher still, depending on the offtake partner, if these IMARC numbers
can be taken as general indicators of pricing.

Source: IMARC Group, Report Title: “Asia Pacific Silica Sand
Market: Industry Trends, Share, Size, Growth, Opportunity
and Forecast 2021-2026”, Report Date: February 2021

All IMHO, DYOR