VHM partners with Yellow Iron Fleet to accelerate Goschen project in Victoria
VHM Limited (ASX: VHM) has signed a strategic memorandum of understanding (MoU) that will help it fast-track the development of the giant Goschen rare earth and heavy minerals project in Victoria.
The agreement with leading local mining services firm Yellow Iron Fleet will enable VHM to gain an early start in identifying and developing the fleet requirements and mining approach for Goschen.
It will also allow the company to accelerate key pre-mining activities.
Shared vision
“This is another major step on VHM’s path towards commencing construction at Goschen,” VHM chief executive officer Ron Douglas said.
“This agreement underscores our shared vision of enhancing Australia’s critical minerals mining and processing capabilities, with a strong emphasis on delivering long-term benefits to the people and economy of the Loddon-Mallee region.”
“The Goschen project is set to be a significant contributor to the region for over 20 years and we are delighted to have Yellow Iron Fleet as our partner.”
Formal partnership
The MoU is for a period of six months, during which time negotiations for a formal mining partnership agreement (MPA) will take place.
Under the initial MoU, the parties will establish contract pricing principles as part of final contract negotiations.
At the same time, Yellow Iron Fleet will undertake the establishment of all mine site operating facilities, the procurement and maintenance of the mining fleet, plant and equipment, as well as the recruitment and management of the operational workforce.
The current plan is for the MPA to cover a period equal to the estimated life of mine for the company’s initial Area 1 development of at least seven years.
The mining scope of work will cover mining and rehabilitation, tailings management activities and the loading of the mining unit plant to feed the 5 million tonnes per annum plant.
Relatively simple mine
Goschen is expected to be a relatively simple mining operation on a substantial rare earth deposit of 413,107t of total rare earth oxide, with an accompanying world-class mineral sands resource.
The project has a current proved and probable ore reserve of 199Mt, producing highly sought-after “critical minerals” (rare earth, zircon and titanium minerals) important to the green energy transition and other modern technology applications.
Offtake agreement
The value of those critical minerals was highlighted early this year when VHM signed a binding offtake agreement with a subsidiary of leading Asian rare earths trading house Shenghe.
The initial three-year term of that agreement covers 60% of the rare earth mineral concentrate and zircon-titania heavy mineral concentrate to be produced from Phase 1 of the Goschen project.
Subject to favourable government approval outcomes in 2024, Goschen’s first production is planned for 2025.