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First quarter as a listed company brings rare earths developer closer to production

The globally significant, tier 1 rare earths deposit developer VHM Limited (ASX: VHM) is continuing to advance their flagship Goschen project towards production, and has capped off their first quarter as a listed company with a bank of announcements that get it closer to pulling critical minerals out of the ground.
The globally significant, tier 1 rare earths deposit developer VHM Limited (ASX: VHM) is continuing to advance their flagship Goschen project towards production, and has capped off their first quarter as a listed company with a bank of announcements that get it closer to pulling critical minerals out of the ground. The release of a refreshed Definitive Feasibility Study (DFS) for flagship Goschen Rare Earths and Mineral Sands project revealed a pre-tax A$1.525 billion Net Present Value (NPV) and a 44% Internal Rate of Return (IRR). The operation is expected to produce average annual EBITDA of A$291 million during the first 10 years of mine life. The payback period is just 2.8 years. The company also announced that they have appointed renowned design engineer Mineral Technologies to complete a detailed design of Phase 1 prospective mine. Prior to the Final Investment Decision (FID), which is expected in H2 2023, Mineral Technologies will advance the engineering design works that will initiate the delivery of a target cost estimate for the Phase 1 Engineering Procurement and Construction (EPC) supply. As a global industry leader with over 80 years of experience in mineral process solutions, Mineral Technologies is the perfect partner for VHM and has already been instrumental in Goschen’s robust Definitive Feasibility Study metrics. The company has been extensively involved in the metallurgical testwork, process flowsheet development, DFS and Front-End Engineering Design (FEED). The Hydromet Circuit Phase 1A Pilot Testwork Program commenced with the Australian Nuclear Science and Technology Organisation (ANSTO), which will continuously run 24 hours a day for 19 weeks. Using 100 kg of rare earth mineral concentrate (REMC) processed by Mineral Technologies, using ore feed from Goschen, the study will confirm the viability of the Hydromet flowsheet at a larger scale, provide valuable process data for feeding into the Hydromet Definitive Engineering Study, FEED and provide market samples of the mixed rare earths carbonate (MREC). During the quarter, the company also received exceptional testwork results from its pre-pilot program with ANSTO, which confirmed leach extractions of >99% for the critical light rare earth metals Neodymium and Praseodymium (Nd Pr), as well as >98% for critical heavy rare earth metals Dysprosium and Terbium (Dy Tb). The testwork program bodes well for VHM’s 413,107 tonnes of Total Rare Earth Oxides (TREO), as it confirmed that the REMC is highly amenable to conventional sulphate bake processing into an MREC product.

Progressing agreement with Shenghe

VHM is in ongoing negotiations for an offtake Memorandum of Understanding (MoU) with Shenghe Resources, who has committed to purchasing 60% of VHM’s phase one REMC and zircon-titania HMC mine output for the first 3 years of production. While the company is also in discussions with a number of European and North American offtake partners, VHM and Shenghe expect to finalise the agreement by 30 June 2023.

MOUs secured in Loddon Mallee

VHM has formalised its relationship with the Gannawarra and Swan Hill Shire Councils by signing a Memorandum of Understanding (MOU) with the government bodies. The MOUs aim to outline a sustainable social and economic future for the local communities in the Loddon Mallee Region, where the company’s flagship Goschen rare earths and mineral sands project is located. The councils have long been supportive of the project, providing their own regular updates on its development and the benefits that it will have on their community. The Loddon Mallee Region has an economic growth strategy, and VHM’s Goschen project is central to that. The council is intent on capitalising on the region’s rich mineral sands and rare earth deposits, and have even suggested that the completion of the upgrade to the Murray Basin Rail Project should be a top priority given how much the Goschen project will benefit from it. Managing Director of VHM Graham Howard, said: “[The agreements] are a key indication of our mutual respect and intent to create positive opportunities for the people of the Gannawarra and Swan Hill council communities.” “We look forward to continuing the close working relationship with the Councils to ensure the local community benefits from employment opportunities and contributions to the local and regional economy.”  The agreement demonstrates a sustainable, social, and economic future for both communities and the Goschen Project. VHM Limited CEO and MD, Graham Howard, will be holding an investor briefing on Tuesday 16th May at 1pm (AEST). Register for the session or request a recording here.
Reach Markets has been engaged by VHM Limited to assist with their investor communications and may receive fees for its services. Any communication from Reach has been prepared with all reasonable care and may be based on unverified information obtained from sources believed to be reliable. However, except to the extent required by law, Reach including its representatives, employees, agents or contractors are not liable to you for any loss or damage resulting directly or indirectly from access to information and do not accept any responsibility for errors and omissions, nor make any warranty or representation as to the reliability, suitability, confidentiality, accuracy, completeness or timeliness of information as it may change without notice and so Reach has no obligation to keep the information current. Forward Looking Statements relate to intentions, future acts and events that are only predictions and are subject to risks, uncertainties and assumptions, which are outside the control of Reach. These may include commodity prices, currency fluctuations, economic and financial market conditions in various countries and regions, environmental risks and legislative, fiscal or regulatory developments, political risks, project delay or advancement, approvals and cost estimates. Actual values, results or events may be materially different to those expressed or implied and given these uncertainties, readers are cautioned not to place reliance on Forward Looking Statements. Information and views from third parties may be produced solely for convenience and are not endorsed nor reflective of Reach’s position.

 

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