- 01NPV pre-tax A$807m; IRR 33%; payback 3y.
- 02LOM rev A$326m/yr; EBITDA A$146m.
- 0318-year plan; 5 Mtpa; <50% Ore Reserve; <12% Mineral Resource.
VHM Limited (ASX: VHM) has completed a comprehensive refresh of the definitive feasibility study (DFS) for its wholly owned Goschen Rare Earths and Mineral Sands Project in Victoria, confirming a pre-tax, pre-corporate net present value at an 8% discount rate of A$807 million and an internal rate of return of 33%.
VHM refreshed the project’s technical, commercial, and financial inputs over the past six months, including retendering major mining, processing, and infrastructure packages, updating costs to 2026 market conditions, and validating the process design through additional test work.
The new economics include a three-year payback from the start of commercial production, average life-of-mine revenue of A$326m a year and EBITDA of A$146m before corporate costs.
Execution capital is estimated at A$283m and total funding required at A$482m, with the latter including pre-production mining and processing, corporate costs, start-up working capital and the environmental bond.
The 18-year mine plan is based on annual processing throughput of five million tonnes per annum, using less than 50% of Goschen’s global Ore Reserve and less than 12% of its Mineral Resource.
Updated Economics and Costs
The DFS assumes annual average production of 8,300tpa of rare earth concentrate, containing 990tpa of neodymium-praseodymium and 115tpa of dysprosium and terbium, alongside 131,000tpa of zircon-titania heavy mineral concentrate (HMC).
HMC provides a second revenue stream that reduces the effective rare earth operating cost to about US$7 per kilogram of rare earth oxide, compared with a unit operating cost before the credit of US$21/kg REO.
“The refreshed DFS demonstrates the financial strength and development readiness of the Goschen project,” chief executive officer Andrew King said.
“Goschen is positioned to contribute directly to Australia’s objective of developing a sovereign fully integrated rare earth supply chain from mine to separated oxides, while the current mine plan uses only a small part of the Mineral Resource.”
“This combination of near-term readiness and long-term optionality is a defining strength of the project.”
Critical-Path Activities
All key federal and Victorian approvals required for development have been secured, while major work packages have been market-tested, shortlisted contractors identified, and an integrated execution schedule established to define critical-path activities and long-lead requirements.
Forecast REC revenue incorporates the pricing and payability methodology under VHM’s binding offtake agreement with Iluka Resources (ASX: ILU), using independent Western rare earth price forecasts where available and providing exposure to dysprosium, terbium, neodymium, and praseodymium pricing.
The project is supported by Iluka’s binding offtake and A$40m cornerstone funding package, while VHM has received conditional, non-binding support of up to A$75m from Export Finance Australia and a letter of interest for up to US$200m from the US Export-Import Bank.
VHM is now focused on completing its financing plan and lender due diligence, finalising preferred contractor arrangements for award after FID, advancing critical-path engineering and vendor data, completing HMC offtake arrangements, and progressing operational readiness.
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