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Rare earths developer VHM races towards production

As a tier-1 globally significant rare earths and mineral sands project, VHM has begun life as a listed company in a strong market for rare earths. 
As a tier-1 globally significant rare earths and mineral sands project, VHM has begun life as a listed company in a strong market for rare earths.  The company believes it has been quite efficient with its operations since its 2014 inception. They defined a JORC resource in 2016, which was upgraded in 2019 and 2020 to give them 413,107 tonnes of total rare earth oxide (TREO). Importantly, 87% of VHM’s rare earth minerals basket will be derived from high value dysprosium, neodymium, praseodymium and terbium oxides. A thorough understanding of what the project in Goschen, Victoria will require, was gained from the definitive feasibility study (DFS) completed earlier last year. A particularly attractive aspect of this as far as rare earths deposits go is the capex, which came in at $445 million (including ancillary costs) and targets production in the first half of 2025. This plan will allow the company to complete Phase 1 of the development, which will give them capacity to produce 9,000-11,000 tonnes p.a. of rare earth mineral concentrate (REMC) and 184,000 tonnes p.a. of zircon/titania. They recently signed an offtake Memorandum of Understanding (MoU) with Shenghe Resources, who has committed to purchasing 60% of VHM’s total mine output for the first 3 years of production. Despite global concerns of China’s dominant position in the rare earths market, which currently covers 85% of the global rare earths processing market – VHM has the backing of the Australian government when it comes to this sales channel. The company is also in discussions with a number of European and North American offtake partners. VHM has continually received support from the Federal government, which includes being designated ‘Major Project Status’. Not only does this mean Canberra views the Goschen project as financially viable and of significant economic interest to Australia, but it will be crucial to the final stage of approvals process, as the Federal government provides strong support with the state and territory approvals process to bring the project into production.  VHM’s view is that the local Gannawarra Shire council has been equally supportive of the project, providing their own regular updates on its development and the benefits that it will have on their community. On top of this, VHM has advised that they have entered into land acquisition agreements with a number of regional landowners, to purchase the freehold title to all, or the majority of, freehold land within the operational footprint of the Goschen Project. No further land is required or intended for the Goschen Project as the mine footprint will be 100% secured under land purchase agreements. The Company confirmed that they have completed all major environmental and social impact assessments needed to obtain the environmental effects statement to advance major development approvals for the Goschen Project. It’s based on open-cut mining of rare earths in sand deposits, with the processed sand being backfilled into mining areas before the topsoil is carefully rehabilitated to a state where it can be farmed again. Importantly, this will all occur above the water table. An updated version of the recently completed DFS will be released in 1h CY23, with a final investment decision due in the second half of this year, and all final approvals due around this time as well – VHM expects to soon be able to start gearing up for producing some of the most critical minerals required for the Earth’s future. Reach Markets have been engaged by VHM Limited and may receive fees for its services. Past performance is not a reliable indicator of future performance.
Sources:   

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