Supply Risks in Guinea Boost VBX’s Low-Silica Bauxite Prospects

VBX’s Market Debut and Capital Raise

VBX Limited marked a significant milestone by commencing trading on the ASX on 17 June 2025, following an oversubscribed Initial Public Offering that raised $10 million. The strong institutional and sophisticated investor support underscores confidence in VBX’s strategic focus on the Wuudagu Bauxite Project, located on Wunambal Gaambera country in northern Western Australia.

Robust Preliminary Feasibility Study Highlights

The recently completed Preliminary Feasibility Study (PFS) for Wuudagu delivers compelling economics, with a pre-tax Net Present Value (NPV) at an 8% discount rate of $821 million and an Internal Rate of Return (IRR) of 136%. The project’s 10-year mine life is underpinned by a 59 million tonne Probable Reserve, with an anticipated payback period of just 16 months from production start. Annual EBITDA is forecast at $143 million, reflecting the project’s strong cash flow potential.

Competitive Edge in Bauxite Quality and Logistics

Wuudagu’s bauxite stands out for its high alumina content (45.4%) paired with low silica (3.6%), a combination that commands a premium price in the Chinese market. This low silica content reduces refining costs, a critical factor given silica’s impact on caustic soda consumption and alumina recovery. Coupled with efficient logistics; road haulage and transhipment close to the coast; Wuudagu is positioned in the first quartile of the cost curve, offering a significant competitive advantage over other Australian and Guinean suppliers.

Advancing Development and Exploration

VBX has initiated an extensive drilling program in 2025, targeting exploration, infill, and hydrogeological studies to enhance resource confidence and support the Environmental Review Document and Definitive Feasibility Study (DFS). The company aims to complete the DFS by Q4 2025, secure project financing by mid-2026, and commence production by the end of 2026. Additional metallurgical testing and process optimisation are also planned to refine project parameters.

Favourable Market Dynamics Amid Supply Risks

The bauxite market backdrop is notably positive, driven by record Chinese import volumes and increased reliance on Guinean supply, which faces significant disruptions due to recent government licence withdrawals and seasonal challenges. This supply uncertainty, combined with historically low Chinese inventory levels, is expected to sustain elevated bauxite prices in the second half of 2025. VBX’s product quality aligns closely with premium Guinean bauxite, positioning it well to capture market share amid tightening supply.

Financial Position and Outlook

As of 30 June 2025, VBX holds a healthy cash balance of $9.5 million with no debt, providing a solid financial foundation to advance development activities. The company remains on track with its planned expenditure and regulatory milestones, maintaining a disciplined approach to capital deployment while engaging closely with traditional owners and stakeholders to ensure responsible project development.