Demand for high-purity silica sands is expected to increase further
In recent decades and years, our society has become increasingly technology-driven – and thus more and more dependent on various critical raw materials. One of these materials, on whose availability the Western world, in particular, is highly dependent, for example in the production of solar cells, is high-purity quartz sand (HPQ silica). Canadian small-cap Homerun Resources (WKN A3CYRW / TSXV HMR) has bet on this trend and has already secured a favorable source of this sought-after material in Brazil. Now it wants to expand the supply available to the company once again.
HPQ (high purity quartz) end-user applications also include, for example, semiconductors, telecommunications as well as optics, microelectronics and energy storage. What these industries have in common is that they are predicted to experience sustained high growth, also due to technological advances. This, in turn, would mean that demand for high purity silica sand should increase significantly.
Demand for high-purity silica sands is expected to increase further
Also, in light of this, Homerun has decided to secure a second source of supply for silica sand. It has now been announced that a binding agreement has been concluded with Brazil’s Aristóteles Chaves da Silva (ACS) for the purchase of the Belmonte quartz sand concession in Belmonte in the Brazilian state of Bahia near the port of Ilheus.
The concession covers an area of 69.4 hectares in the Belmonte Quartz Sand District. It is adjacent to concessions known to have high quality quartz sand. Homerun thus takes a further step in its strategy to strengthen its presence in this district.
A deal with a safety net
However, Homerun has put a sort of safety net into the deal with ACS. First of all, they have agreed to pay USD 10,000 in cash to the Brazilians within ten days of concluding the agreement. This gives them the right to conduct an evaluation of the concession by March 31, 2024. This, Homerun said, will consist of carrying out a 200-meter percussion drill program within the concession’s boundaries.
If this evaluation drill campaign determines that quartz sand with a purity of 99.5% or higher is found in more than 25% of the concession, a second payment is due. In this case, Homerun will transfer another US$40,000 to ACS in exchange for 100% control of the concession.
However, if the drilling does not prove the values mentioned, no further payment to ACS will be necessary. In this case, however, ownership for 100% of the concession will still go to Homerun.
Conclusion: Homerun Resources is steadily implementing its three-phase strategy to become a leading energy and industrial materials company. While the road to achieving this goal is neither short nor easy, it is good to see that the company continues to make progress.
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