VHM accelerates transition from explorer to developer with progress at Goschen

VHM Limited (ASX: VHM) continues to achieve its fundamental goals as it transitions from a rare earth element (REE) and mineral sands explorer to a developer.

Having only listed on the ASX in January 2023 as an explorer with a definitive feasibility study (DFS) for its flagship Goschen rare earths and mineral sands project in Victoria, VHM is closing in quickly on its development plans for the high-class deposit.

In reporting its results for the half year ended December 31 2023, VHM has highlighted just how far the company has come.

Victorian exploration licence holding retained into 2028

VHM was granted a five-year exploration licence renewal, the fourth and final exploration permit renewal it required to secure its tenement holdings in north west Victoria to 2028.

The company also unveiled an inferred maiden mineral resource estimate (MRE) for the Nowie project at Goschen of 16.4 million tonnes at 3.8% total heavy minerals (THM).

This increased the company’s total MRE to 836.8Mt.

The Nowie MRE news followed on from the positive September 2023 release of an Area 4 maiden ore reserve adding 11.5Mt at a 5.6% THM probable ore reserve to the company’s global resource.

VHM highlighted the high-grade mineable horizon of 2.6Mt at 9.6% THM that exists at the top of the Area 4 ore body.

Goschen development

Activities in the reporting period included the assembly of a board of directors with major mine development and construction experience to facilitate the next phase in the company’s growth and the placement of the Goschen Environment Effects Statement (EES) on public exhibit.

Another recent milestone was the early-January placement on public notice of the Goschen project’s mining licence application.

The review and issue of a mining licence by Victoria’s Earth Resources Regulator is dependent on the outcome of the EES approvals process, with the statutory advertising for the mining licence application running concurrently with the EES public exhibition stage.

With a good deal of momentum already behind it, VHM is expecting further positive results in its next half-year report.

First binding offtake agreement

VHM has also successfully concluded negotiations for its first binding offtake agreement for Goschen Phase 1 products (rare earth mineral concentrate and zircon-titania heavy mineral concentrate) with Shenghe Resources, which will take effect this side of the reporting period.

The binding offtake is for 6,400 tonnes per annum of rare earth mineral concentrate (REMC) and 100,000t zircon-titania heavy mineral concentrate (HMC) products (each approximately 60% of forecast production per annum) from the Goschen project for an initial three-year term.

“A binding offtake arrangement for first production provides a favourable influence on the bankability for the project and further distinguishes the staged development approach […] as a viable, de-risked, low capital intensity project,” VHM chief executive officer Ron Douglas said.

The company declared that the agreement highlighted the quality of the Goschen project and the value in the initial products—REMC containing greater than 58% total rare earth oxide and a zircon-titania HMC comprising high-grade zircon, rutile, leucoxene and ilmenite.

The company’s future growth strategy is focused on the development of a hydromet circuit to produce a mixed rare earth carbonate as part of a staged development approach to be located next to the Goschen mine base plant.

Final investment decision planned after approvals

VHM is now focusing on Goschen operational readiness activities in anticipation of a positive ministerial approval for the Goschen environmental permit.

In parallel, the company is looking to maximise the value of the Goschen project Phase 1 production for the remaining production stock through spot sales and other commercial arrangements.