Goschen Project’s Stage 2 Capital Rises to $120M as VHM Gains Key Approvals

Mining Licence Approval Marks Major Milestone

VHM Limited has secured the mining licence for its flagship Goschen Rare Earths and Mineral Sands Project in northwest Victoria, a critical step enabling the company to progress towards construction and production. This approval follows the Victorian Minister for Planning’s endorsement of the Environment Effects Statement in December 2024, clearing key environmental and regulatory hurdles.

The mining licence approval is pivotal for VHM as it advances towards a Final Investment Decision (FID), underpinning the company’s confidence in moving the project into its next phase. Resources Victoria’s sanction confirms the project’s compliance with stringent state requirements, positioning Goschen as a significant contributor to Australia’s critical minerals sector.

Extended Major Project Status Supports Strategic Growth

Recognising the Goschen Project’s strategic importance, the Commonwealth Industry Minister has extended its Major Project Status by an additional three years. This extension facilitates enhanced regulatory support and underscores the project’s potential to bolster Australia’s critical minerals supply chain, employment, and regional development.

Major Project Status not only accelerates approvals but also signals government commitment to fostering critical mineral resources essential for emerging technologies and renewable energy applications.

Revised Staged Expansion Strategy and Cost Adjustments

VHM has updated its staged expansion plan, initially targeting a production throughput of 1.5 million tonnes per annum (Mtpa) with a future scale-up to the permitted 5 Mtpa. This phased approach aims to balance early revenue generation with operational flexibility, mitigating risks associated with large-scale ramp-ups.

However, the company disclosed increases in Stage 2 capital expenditure, now estimated between $110 million and $120 million, up from the previous $85–$90 million range. Operating costs have also risen, with Stage 1 annual costs increasing from $77 million to $86 million and Stage 2 from $175 million to $188 million. These adjustments primarily reflect revised mining schedules and processing plant construction costs.

Despite these cost escalations, the project maintains robust economics with a pre-tax, pre-corporate internal rate of return (IRR) of 54% and a payback period of 3.5 years, albeit down from prior estimates of 65% IRR and 3.3 years payback. The discount rate was revised to 8% following the EES endorsement, reflecting reduced project risk.

Strong Resource Base and Financial Position

VHM’s extensive exploration in northwest Victoria has delineated a substantial critical minerals resource province spanning 55 kilometres, with a Mineral Resource Estimate of 892.1 million tonnes and Ore Reserves of 210.2 million tonnes. The resource includes approximately 650,000 tonnes of Total Rare Earth Oxide (TREO) and Y2O3, positioning Goschen as a world-class asset.

Financially, the company reported a cash balance of $3.9 million at quarter-end, supported by a $1.6 million R&D tax refund related to 2024 activities. VHM’s cash flow statements indicate ongoing investment in project development and exploration, with no substantive mining production activities during the quarter.

Path Forward and Investor Engagement

VHM continues to advance secondary approvals and strategic partnerships, aiming for a Final Investment Decision later in 2025. The company’s management has actively engaged investors through presentations and webinars, outlining recent achievements and upcoming milestones.

While the revised cost structure introduces some economic pressures, VHM’s strategic milestones and government backing provide a solid foundation for progressing the Goschen Project towards production, contributing to Australia’s critical minerals ambitions.