Rare earths producer VHM seeks $10m for IPO

Mineral Resources managing director Chris Ellison.

The Chris Ellison-backed rare earths producer VHM has tapped Canaccord Genuity to raise funds as it revives attempts for an initial public offering.

VHM is searching for up to $10m through a convertible note and equity offer that opens this week. Canaccord is believed to have been sounding out the market recently.

The equity investment is at 60c per share and the convertible note has a March 2023 maturity, with conversion automatic on listing at a 20 per cent discount to the IPO price.

It also has a 10 per cent coupon paid quarterly in arrears.

The funds are being used for the company’s development of its rare earth and zircon Goschen project in Victoria and its IPO plans.

The business had earlier been for sale with hopes of fetching $500m through Standard Chartered.

VHM is an unlisted public miner that counts Mineral Resources managing director Chris Ellison as its largest shareholder and former Newcrest executive Graham Howard as its managing director.

VHM has one of the highest-grade rare earths deposits which was earlier said to have a value of up to $1.3bn.

Two years ago, it was understood that the company required up to $300m of capital investment. The plan then was to find a strategic investor.

Its previous plan to float on the ASX was through investment bank JPMorgan.

Based in Victoria, VHM was established in 2014.

It holds several exploration tenements within the Loddon Mallee region of Victoria.

Some believe that the group may capitalise on the current geopolitical instability with the listing. It will no doubt be arguing that rare earths will benefit from the Ukraine crisis because US supply chains will further decouple from Russia and China.