VHM’s Placement Underwriting Risks Highlighted Amid $8.25M Raise

Successful Capital Raise

VHM Limited (ASX: VHM) has completed a partially underwritten placement, issuing 33 million new shares at $0.25 each to raise $8.25 million before costs. This price represents a notable 19.4% discount to the company’s last closing price, reflecting a strategic move to secure strong investor demand and provide the company with essential growth capital.

The placement was well supported by institutional investors and existing shareholders, underscoring confidence in VHM’s critical minerals focus and the potential of its 100% owned Goschen Project in Victoria. The new shares will rank equally with existing ordinary shares, with allotment expected on 15 May 2025.

Funding the Goschen Project

Proceeds from the placement will primarily fund ongoing work programs and early engineering efforts aimed at reaching a Final Investment Decision (FID) on the Goschen Project by the third quarter of calendar year 2025. This milestone is critical for advancing the project towards development and eventual production, positioning VHM to capitalize on the growing demand for critical minerals.

CEO Ron Douglas emphasized the strategic importance of the raise, highlighting that the funds provide a clear runway to support capital expenditure requirements for Stage 1 of the Goschen Project. He also noted ongoing positive engagement with offtake partners, which adds commercial validation to the project’s economics.

Share Purchase Plan to Follow

Following the placement, VHM will offer a non-underwritten Share Purchase Plan (SPP) to eligible Australian and New Zealand shareholders, aiming to raise an additional approximately $2 million. The SPP will be priced at the same $0.25 per share as the placement, with a maximum subscription limit of $30,000 per shareholder. The offer is expected to open on 19 May 2025 and close on 10 June 2025.

This approach allows existing shareholders to participate in the company’s growth on equal terms with institutional investors, potentially broadening the shareholder base and enhancing liquidity.

Underwriting and Risk Considerations

The placement is underwritten by Jarden Australia Pty Ltd, with a comprehensive underwriting agreement that includes customary conditions and termination events. These cover a range of potential adverse developments, from breaches of representations to market disruptions and regulatory changes, ensuring protections for both the company and the underwriter.

While the underwriting provides a degree of certainty around the capital raise, investors should remain mindful of the risks inherent in project development timelines and market conditions that could influence future funding needs or share price performance.