Canadian company Sio Silica Corp., which is planning on listing on the NYSE this year, is developing its 100%-owned Vivian Sand high purity silica project near Winnipeg.
Silicates form more than 25% of the Earth's crust, but silica rarely occurs as a free element. Such high purity is critical to technology being used in the clean energy transition.
Sio said its silica deposit has a 99.86% purity after water wash and reaches 99.91% purity after a magnetic separation process that doesn't use harmful chemicals. Further beneficiation tests have shown results as high as 99.9986% purity.
Above 99.8% is "very high-grade material," noted a report by Rockstone Research.
"That's the type of rare sand the world needs to make the energy transition a success," the report noted. "It's called high-purity (quartz) silica sand and is used for the production of solar panels, wind turbine blades, and many other high-tech products like smartphones, TV screens, and (fiber) optics. Alarmingly, we are running out of high-purity silica sand."
Sio said its process will help fill that demand with no tailings pond, open pit, silica dust, and a minimal draw on water resources.
The project has measured and indicated resources of 146 million tonnes (Mt) of silica and 345 Mt inferred resources with a mine life of 25 years.
"The good thing is, even when they drill in the wrong places, (resource totals) continue to soar," said Paul Klemke, managing director of Integral Wealth Securities Ltd. "It's shocking. Every hole, they find more resource."
The Catalyst: Growing Electronics, Tire Industries
The global high purity silica market is expected to reach US$20.44 billion by the end of the decade from US$7.5 billion in 2023, according to a report by Coherent Market Insights.
"Global high purity silica market growth is driven by the growing electronics industry," the report noted. "As semiconductors become more advanced with each passing generation, the demand for ultra-high purity silica to manufacture such chips also rises. New applications in areas like 5G, electric vehicles, and renewable energy adoption will further drive the market growth in the near future."
Due to its robust electronics manufacturing base, the Asia Pacific (APAC) region (led by China, South Korea, Taiwan, and India) dominates the market, the researchers said. But "uncertainties around trade issues and policies bring some challenges."
Sio said it has an offtake agreement and memorandum of understanding (MOU) "in place with APAC customers expected to support robust immediate cash flow as North American market grows," with 100% of Phase 1 production allocated.
According to the company, there are only two known silica assets with comparable purity in North America, in Michigan and Georgia. "Neither have the ability to scale production beyond an estimated ~1 (million tonnes per annum) Mtpa combined," it noted in its corporate presentation.
North America's Largest Solar Panel Plant
New U.S. laws are providing tailwinds for the industry's supply chain. The CHIPS Act provided over US$50 billion over five years to expand semiconductor manufacturing (vital to national security), and US$39 billion for domestic production. The Inflation Reduction Act, provided US$370 billion in investments to enhance U.S. energy security, including solar panels and the electric vehicle (EV) sector, both consumers of the element.
Sio said it is going after those industries with the offtake agreement and MOU with APAC companies and an MOU signed last year with RCT Solutions for RCT to build the continent's largest solar plant in Manitoba for US$3 billion. Sio is also testing its silica for use in battery technology.
The element is also used in the automobile sector's rubber and tire industry, which is also expected to drive demand in coming years.
"The demand for green tires is growing due to lower rolling resistance, and higher grip is anticipated to have a positive impact on the demand for high-purity silica in the manufacturing of green tires," Fact.MR noted.
But the high-purity silica used in semiconductor electronics may be the most critical, noted Addison Engineering Inc.
"Elemental silicon also has a large impact on the modern world economy," the silicon wafer manufacturer noted. "Because silicon is used at the core of most computers, a great deal of modern technology depends on it."
Simple, Environmentally Friendly Methods
According to Sio, its patent-pending refining process skips steps that competitors use to get to the highly pure silica. After extraction and water washing, it uses simple magnetic separation. Processes used by other companies can also involve blasting and excavation, crushing and grinding, flotation, chemical processing, and heat treating.
Because of that, "Sio's high purity resource has a cost advantage compared to competing sources of high purity silica," the company said.
Sio also announced last fall that it had signed an MOU with Peguis Consultation & Special Projects Inc. and AECOM Canada Ltd. to build an environmental monitoring company controlled by Peguis. The new company would provide environmental monitor services for Vivian Sand, as well a wide range of other industries.
Vivian Sand's processing facility is Phase 1 construction ready with a Facility Use Permit received in 2021. Phase 1 construction is expected to take about one year and to be fully funded internally through funds from investors, institutions, a large Canadian pension fund, and flow-through equity from a variety of individual accredited investors.
Sio plans to go public through a partnership with Pyrophyte Acquisitions Corp., a special purpose acquisition company, for a combined pro forma equity value of US$758 million, with existing shareholders rolling over 100% of their equity.
That valuation represents about an 80% discount to an about US$3.9 billion net present value estimated by Stantec Inc. (TSX, NYSE: STN) based on a portion of the site's measured resources.
Upon closing, the name of the combined company will be Sio Silica Inc., and the company said its common shares and warrants are expected to be listed on the NYSE under the tickers "SIOS" and "SIOS WS," respectively.
| Want to be the first to know about interesting Critical Metals, Alternative Energy and Renewable - Solar investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter. | Subscribe |
Important Disclosures:
- Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
- This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.
For additional disclosures, please click here.
