VHM Limited has launched a partially underwritten equity placement and share purchase plan to fund the development of its Goschen rare earths and mineral sands project, targeting production by late 2026.
- Partially underwritten $160 million equity raising underway
- Mining Licence and Environment Effects Statement approvals secured
- Final Investment Decision targeted for Q3 2025
- Project NPV of A$1.5 billion with IRR exceeding 50%
- Binding offtake agreements in place; further funding and partnerships pursued
Strategic Capital Raise to Propel Goschen Project
VHM Limited (ASX:VHM) has announced a significant equity raising initiative comprising a partially underwritten placement and a Share Purchase Plan (SPP) aimed at securing capital for the advancement of its flagship Goschen rare earths and mineral sands project in Victoria, Australia. The company is targeting a Final Investment Decision (FID) in the third quarter of 2025, with first production anticipated in the fourth quarter of 2026.
Robust Project Fundamentals and Approvals
The Goschen Project stands out as a tier 1 asset, boasting a substantial Ore Reserve of 210 million tonnes and a Mineral Resource nearing 900 million tonnes. It features a unique mineral assemblage combining both light and heavy rare earth elements, including neodymium, praseodymium, dysprosium, and terbium, alongside zircon and titania heavy mineral sands. The project has secured critical regulatory milestones, including a Mining Licence and endorsement of its Environment Effects Statement, underpinning its pathway to production.
Compelling Economics and Market Position
Financial modelling highlights an impressive net present value (NPV) of approximately A$1.5 billion and an internal rate of return (IRR) exceeding 50%, with a payback period of just 3.5 years. These metrics reflect the project's strong economic viability amid rising global demand for critical minerals essential to electrification and decarbonisation technologies. VHM has already secured binding offtake agreements, including a memorandum of understanding with Currumbin Minerals for heavy mineral concentrate supply, and is actively negotiating further partnerships across Australia, the US, Japan, Korea, and Europe.
Funding Strategy and Execution Risks
The company’s multifaceted funding approach combines equity, debt, and potential government support. While the placement is only partially underwritten, VHM is progressing discussions with a range of counterparties and export credit agencies to secure comprehensive financing. However, risks remain around finalising funding, commodity price volatility, and operational execution. The company acknowledges these challenges alongside regulatory, environmental, and market perception risks inherent in mining development projects.
Strategic Importance Amid Global Supply Constraints
Goschen is positioned as a critical supplier of rare earth elements and mineral sands within Australia, supporting local industry and processing capabilities. This is particularly significant given recent export restrictions imposed by China on medium and heavy rare earth materials, which have intensified global supply concerns. VHM’s project could play a pivotal role in diversifying and securing supply chains for these essential minerals.
Bottom Line?
VHM’s equity raising marks a decisive step toward unlocking the strategic value of Goschen, but execution risks and market dynamics will shape the next phase.
Questions in the middle?
- Will VHM secure the full financing package to meet its Q3 2025 FID target?
- How will evolving rare earths market prices and China’s export controls impact project economics?
- What additional offtake agreements or strategic partnerships will VHM announce ahead of production?