VHM eyes staged critical metals expansion at Goschen

A fresh development strategy for the Goschen project has ensured a low-risk pathway to production for the asset. 

A new development strategy for the Goschen project targets first production in two years. Pic: Getty Images

Special report: Following a review of a staged approach from 1.5Mtpa to 5Mtpa at the Goschen project in Victoria, VHM has signed off on a revised development strategy incorporating updated capital and operating expenditure estimates. 

• VHM builds on 2023 DFS with new development strategy set out for Goschen
• The strategy incorporates updated capital and operating expenditure estimates 
• Next key milestones include the mining licence and secondary approvals

The company is looking to leverage a dual revenue stream of rare earths and heavy mineral concentrates to fund expansion and builds on the robust foundation established during the 2023 Goschen definitive feasibility study. 

Construction, set to begin in Q4 2025, will cost $160m for Stage 1 and between $85-$90m for stage 2 in Q4 2028. 

To minimise the upfront capital, VHM (ASX:VHM) is utilising a modular process plant sized for 1.5Mtpa throughput, simple infrastructure such as transportable buildings, power and water sized for the throughput and all mining capital is included in the mining unit rates.

Product streams include rare earth mineral concentrate and heavy mineral concentrate with no further processing. 

VHM said the same approach is continued with the expansion of the throughput, with additional modular process plant installed adjacent to existing facilities. 

This modular approach has delivered capital savings when compared to the previous larger bespoke development originally proposed. 

Updated financial metrics 

Underpinning the capex and opex pricing, VHM has entered a partnership with Yellow Iron Fleet and has selected contractors who have specialist skills in process plant delivery and infrastructure. 

The project’s economics include a 65% IRR and a 3.3-year payback period (pretax), underscoring its potential to create significant value.

The above financial and operational projections are based on several factors including whether the mining licence and secondary approvals are received in 2025. 

VHM has started discussions with numerous project financiers and strategic offtake partners for the balance of its offtake and will provide updates as they progress.

Meanwhile, the company will continue to work closely with the government, its partners, contractors, financiers and stakeholders to advance the Goschen project towards production, currently slated for Q3 2026. 

Goschen project background  

The project currently has an overall resource of 892.1Mt grading 2.7% total heavy minerals including an ore reserve of 210Mt at 3.8% THM and contained total rare earth oxides of 413,107t.

A pilot-scale hydromet plant has already been successful in producing a high-purity mixed rare earth carbonate with 97% recovery of critical magnet rare earths neodymium and praseodymium, along with 92% recovery of dysprosium and 94% of terbium.

The new strategy puts VHM a step close to development, following the recent ministerial endorsement of the Goschen project by the State Government late last year, which significantly de-risked the project.

Several key milestones to tick off before production 

“The Goschen project represents a world-class opportunity to deliver critical minerals essential for the global energy transition,” VHM managing director Ron Douglas said. 

“Our phased development strategy ensures a low-risk pathway to production, with strong cash flows from the initial 1.5Mtpa operation funding the expansion to 5Mtpa.

“With the Environment Effects Statement (EES) now endorsed and key technical and financial parameters confirmed, we are well-positioned to rapidly advance the Goschen project towards production,” he added. 

“In the near term, we are targeting several key milestones including financing and offtake agreements, securing contractors for development and commencing construction.” 

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.

Originally published as VHM eyes staged critical metals expansion at Goschen