EXIM Bank signals up to US$200m support for VHM’s Goschen Rare Earths and mineral sands project

• US Export-Import Bank provides LOI for up to US$200m financing support for VHM’s Rare Earths (RE) and mineral sands project
• Goschen identified as candidate under EXIM initiative to secure diversified supply chains for US buyers

Special Report: VHM Limited’s Goschen rare earths and mineral sands project in Victoria has received a vote of confidence from the US Export-Import Bank (EXIM), which provided a letter of interest for up to US$200m in project financing support.

The LOI outlines a potential financing package with a maximum repayment term of 12 years, subject to standard due diligence and compliance with EXIM’s program, legal and eligibility requirements.

VHM Limited (ASX:VHM) notes the offer also identifies Goschen as a candidate under EXIM’s Supply Chain Resiliency Initiative (SCRI), which supports projects that contribute to secure diversified supply chains for US buyers.

The LOI may also qualify for special consideration under EXIM’s China and Transformational Exports Program under Section 402 of EXIM’s 2019 reauthorisation that seeks to improve the competitiveness of the US by offering lower fees and longer repayment terms.

Engagement with Export Finance Australia and EXIM is being carried out through the Single Point of Entry framework, a streamlined pathway for businesses to approach EXIM and EFA that enable faster referrals and joint financings of eligible critical mineral transactions.

“The Letter of Interest from EXIM is a strong endorsement of the Goschen project’s strategic importance to global supply chains,” chief executive officer Andrew King said.

“It reflects growing international recognition of VHM’s role in delivering critical minerals to key markets.

“Our engagement through the Single Point of Entry with Export Finance Australia and EXIM provides a clear pathway to secure long-term financing and positions VHM as a trusted partner in the energy transition.”

Goschen project

The flagship Goschen project in northwest Victoria has an ore reserve of 210Mt (99Mt permitted) and a large resource of 892Mt at 3% total heavy minerals including monazite and xenotime-hosted REEs.

Financing and offtake negotiations are currently underway to pave the way for a final investment decision to be made.

Development currently envisions an initial 1.5Mtpa operation expanding  to 5Mtpa three years later.

Pre-production costs for stage one is forecast at $160m and it is expected to produce 4300tpa of RE mineral concentrate and 69,000tpa of zircon/titania heavy mineral concentrate.

Stage two will cost a further $110-120m and increase output to 9000tpa REMC concentrate and 134,000tpa HMC for at least 19 years.

Collectively, the two stages are expected to generate pre-tax net present value and internal rate of return of $1.456 billion and 54% respectively.

The company has a non-binding LOI from Japanese global trading and investment giant Mitsui to offtake 40% of Goschen’s HMC from commencement for an initial three-year period.

Mitsui have also proposed to provide a trade finance facility, subject to due diligence.

The company also has a MOU with Queensland based Currumbin Minerals Pty Ltd as part of its strategy to develop a domestic supply chain solution for HMC.

This article was developed in collaboration with VHM Limited, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.