• Construction at VHM’s shovel ready Goschen REE project set to get underway next year
  • 5Mtpa, 20-year project will churn out $270m cash pa over first decade, generating IRR of 44%, NPV $1.5bn
  • Recent maiden resource at Cannie project lifts total REE inventory by 43%
  • An initial drill program recently been completed at Nowie, testing multiple promising geophysical targets


The supply chain for rare earths is almost entirely dominated by China but one ASX explorer is proving Victoria, traditionally known for its high-grade gold mines, could hold the key.

VHM (ASX:VHM), backed by Perth billionaire and mining veteran Chris Ellison, has a portfolio of high-value rare earth element (REE) and mineral sand projects in northwest Victoria.

Its flagship Goschen and nearby Nowie and Cannie projects contain neodymium, praseodymium, and terbium, the ‘heavy’ REEs found in permanent magnets for the manufacture of everything from mobile phones to electric vehicles, wind turbines, medical technology and countless defence applications.

It is why many leading governments have rare earth elements listed as ‘critical minerals’ – they are essential to our modern technologies, economies and national security, and their supply chains are vulnerable to disruption.

China has a high degree of control over the rare earth market and pricing – one of the reasons Western nations are keen to invest in companies with resources in other jurisdictions,in the hope of building downstream processing and eventually a whole supply chain that is not reliant on the battery metals powerhouse.

VHM believes its projects hold the potential to accumulate one of the world’s largest critical mineral inventories, which could help to relieve some of the supply pressure currently taking place as a result of the world’s energy transition.


Goschen: A near-term rare earths development

The $77m capped explorer has already delivered a definitive study for its flagship Goschen project, with an update in March demonstrating it could churn out $270 million in cash each year over its first decade, generating an internal rate of return of 44%.


VHM’s projects. Pic via VHM


At a CAPEX of $500m, a 5Mtpa plant would produce a mix of zircon-titania heavy mineral concentrate (134,500t), rare earth concentrate, (9428t) and mixed rare earth carbonate (8568t) over 20 years.

For the first phases of the mine, VHM expects to deliver revenues of around $560m a year over the first 10 years, around three quarters of that from rare earths.

In fact, about 87% of Goschen’s basket value is derived from the critical rare earths crucial electric vehicles and the green energy transition.

With construction set to get underway next year, and an offtake agreement in the bag with Chinese rare earths mining and processing company Shenghe Resources, VHM is hoping to get Goschen into production in 2025 (subject to the approvals timeline).

The project is about 35km southwest of Swan Hill and 275km north of Melbourne with VHM holding one of the largest tenements in the area at 2,860km2.


The Goschen project. Pic via VHM



A new critical mineral province

VHM’s Cannie project is roughly 13.5km south of Goshchen and boasts a newly released inferred resource of 192Mt total heavy mineral at a grade of 3.1%, lifting the company’s resource tonnage by 30% to 820Mt.

It also boosts VHM’s Total Rare Earth Oxide (TREO) and Yttrium resource inventory by 43% to 589,000t.

With the resource at Cannie, detailed engineering work well advanced at Goschen, and exploration work at Nowie – another deposit to the north of Goschen – making headway, VHM has confirmed a major new critical mineral province stretching over 55km length along the western flank of the Lake Boga granite in northern Victoria.

To date, the Cannie mineral resource has been identified to extend 7.2km north-south and 4.4km east-east, remaining open in all directions, however the explorer is looking to release a further resource update before the end of the year with additional drilling.

VHM managing director Graham Howard said the company’s rare earth inventory is now one of the largest in Australia, which is complemented by the significant zircon inventory of 5.1Mt and rutile inventory of 2.7Mt.

“We are on track to deliver one of the world’s largest Critical Mineral deposits which we believe could support several project hubs that once developed feed critical minerals into supply chains to enable decarbonisation of global economies,” he said.

The grade profile and significant tonnage associated with the Cannie critical mineral resource enables the company to begin engineering evaluations for a second project south of the flagship Goschen project.

“This will also be influenced by work that is advancing on both Goschen and Nowie projects and we anticipate further announcements for these projects over the next quarter,” Howard said.



Area 4 and high-grade areas beyond Goshchen

Having multiple high-grade areas defined introduces optionality. Pic via VHM


Meanwhile, an 11.5Mt at 5.6% total heavy mineral (THM) probable ore reserve has been recorded at Area 4, roughly 8km to the north of the proposed Goschen rare earths and mineral sands process plant.

Within this area, a high-grade mineable horizon of 2.6Mt at 9.6% THM exists at the top of the ore body and contains:

  • 245,500 tonnes of mineable THM;
  • 67,700 tonnes of zircon at an in-situ grade of 2.6% (representing 27.6% of the economic mineral assemblage of ore in this upper horizon);
  • A stand-out average in-situ grade of 230ppm TREO, also in the upper horizon

“These are fantastic results,” Howard said.

“Having multiple high-grade areas defined introduces optionality for both our mining plan and downstream processing.

“We are following up to assess these options but beyond the high-grade areas of Area 4 Orion Strandline, Cannie, and Nowie, similar investigations are underway to re-analyse previously identified deposits within the regional exploration that VHM has already conducted.

“This investigation has already indicated that similar high-grade potential exists at the Cygnus prospect to the east of Goschen.”



VHM transitions to producer

VHM underwent a board reshuffle in August, appointing three new directors to lead the company as it enters the next stage of development and growth.

Michael Allen and Gamini Colless retired to make way for Ron Douglas, Ian Smith, and Maree Arnason as non-executive directors, which was effective immediately.

Since then, Ian Smith has been appointed to the role of chairman and Ron Douglas will transition from non-executive director to executive director and interim CEO, effective from 1 October.

According to the explorer, these changes continue the refreshed strategic approach first flagged in August.

Former Rio Tinto, Newcrest, and Oria executive Ian Smith brings more than 40 years experience to the table while Ron Douglas brings both mining and engineering/ construction experience to his role, having added value through his project development experience.

Maree Arnason is a highly regarded director and senior executive with 35 years’ experience in natural resources, energy and manufacturing and has worked across commodities including iron ore, gold, copper, timber, coal, mineral sands and natural gas.

A review of the overall development strategy for the regional rare earth and mineral sands province is underway.

The company is well positioned to transition into production ready status and drive the next stage of growth with $20.6 million cash available at 30 June 2023.



This article was developed in collaboration with VHM, 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.