VHM holds one of the largest rare earths inventories in Australia. 

VHM is rapidly building a new industry in the emerging mining jurisdiction of Victoria, with a suite of adjacent projects set to form multiple hubs as part of a rare earth and mineral sands district.

The company had already defined a significant rare earths deposit at its Goschen project but has since lifted the lid on two additional nearby projects that will further expand its mining future.

VHM announced its maiden inferred mineral resource estimate for the Cannie project in mid-May, containing 192 million tonnes (Mt) at 3.1 per cent total heavy mineral (THM) grade. This boosts the company’s total resource inventory by 30 per cent to 820Mt.

Cannie has added 176,000 tonnes of rare earths, 1.4Mt of zircon, 0.9Mt of rutile and 1.4Mt of leucoxene. In combination with the Goschen project, the total mineral inventory now boasts 5.1Mt of total zircon, 2.7Mt of total rutile and 2.9Mt of total leucoxene.

The higher-grade nature of the Cannie resource has also increased VHM’s total rare earths inventory from 413,000 tonnes to 589,000 tonnes.

Cannie, located only 13km south of Goschen, demonstrated its high-grade potential early in the drilling program, with the first 17 drill holes averaging 4.9 per cent THM across an average width of 2.7m.

VHM used 38 drill holes for the Cannie inferred resource estimate, with results pending from a further 104 holes at the project. These additional drill holes will increase confidence in the resource and potentially expand it further.

“We’ve intersected some pretty special grades at Cannie, which are very high in TREO (total rare earth oxide) and very high in rutile and leucoxene, which is a slightly different composition to what we discovered at Goschen,” VHM managing director Graham Howard told Australian Resources & Investment.

“We’re seeing a different titania mineral assemblage at Cannie, and we’re also getting some pretty good zircon grades there too.”

VHM recently released a refreshed Goschen definitive feasibility study (DFS), which demonstrates a project with a net-present value (NPV) of approximately $1.5 billion and a 44 per cent internal rate of return (IRR).

“The DFS is based on a process facility that has only five-million-tonnes-per-annum of throughput using conventional mining technology and shallow pits down to 30 metres in sand at Goschen,” Howard said. “And we’re backfilling those pits straight away with sand from the process plant.”

The Goschen project is designed to be progressively rehabilitated at it produces, meaning there are no surface tailings, no permanent waste dumps and no visual scars.

This lends to stronger environmental, social and governance (ESG) credentials and reduced legacy issues down the track.

Goschen is also unique in that its multi-commodity profile means VHM can benefit from multiple revenue streams to support its bottom line.

“When we look at the overall process, the two commodity streams are the rare earths, and the zircon and titania,” Howard said.

“The zircon and titania are effectively paying for the mining, processing and logistics costs of the project. We’re able to produce rare earths at exceptionally low operating costs compared to our peers, and that sets this project apart.”

Howard and his VHM team have been spending plenty of time on the road to understand the company’s unique marketplace, while gathering insights into the projected rare earths shortfall in the years to come.

“The world is very focused on supply issues for rare earths in the timeframe of 2025–26, just as our Goschen flagship project is being commissioned and coming on stream,” Howard said. “So we’re entering a perfect time to be producing zircon and titania and most importantly, rare earths, which will generate around 75 per cent of our revenue.

“We’ve got the big four which are needed for the permanent magnets that are driving the electrification of vehicles and wind turbines as part of global decarbonisation.”

The big four are the rare earth elements, neodymium, praseodymium, dysprosium, and terbium, each of which are listed on the US critical minerals list.

Time away has also enabled VHM to continue offtake discussions with potential partners.

VHM already has the backing of leading Chinese rare earths mining and processing company Shenghe Resources, with which it has signed a memorandum of understanding (MOU) for a take-or-pay offtake agreement over an initial three-year term.

If converted to a binding agreement, this would enable Shenghe to purchase 60 per cent of the Goschen product, whether this is the zircon-titania heavy mineral concentrate or the rare earth mineral concentrate for the first three years of production.

Further processing of the concentrate through a hydrometallurgical (hydromet) circuit will produce a rare earth mineral carbonate, which provides VHM offtake flexibility.

“The hydromet circuit should be switched on within six months of the commissioning of the first phase of the plant,” Howard said. “This will effectively give us a new, higher value product that is not yet committed to any party.

“While we were overseas as part of an Austrade delegation, discussions have shown there is a great deal of global interest in this higher-value product.

“This changes the dynamics a bit. So what we’re doing is working with all our parties to understand their requirements. What is abundantly clear with the geology and the Cannie announcement is we have a series of major projects here.”

“I call them project hubs, which can be brought online as corporations or nations require.”

The company is also in discussions with European, North American, South-East Asian and Japanese corporations about potential offtake agreements.

Howard said VHM’s permitting process is advancing on-schedule, with the company finalising adequacy review of the Environmental Effects Statement (EES). This will be assessed by the Minister for Planning who will then authorise the document for public exhibition.

This paves the way for ministerial approval to build the mine, which VHM hopes to achieve by the end of 2023.

Howard said VHM has put a lot of effort into front-ending the approvals process so that there are no hiccups down the track when Goschen is constructed and brought into production.

VHM is also establishing its social licence to operate, underpinned by recent MOUs signed with the Swan Hill and Gannawarra councils.

“The agreements with the local shires demonstrate the broad community support we have been receiving for this project,” Howard said. “Since 2018, all of the studies we’ve completed indicate that the Goschen project is low impact compared to similar projects.”

The construction and operation of the Goschen project is also expected to add more than $2 billion to the Loddon-Mallee economy and an estimated $1.3 billion to the Victorian economy across its planned 20+ year mine life.

VHM was already onto something significant with its Goschen project, and the addition of the prospective Cannie and Nowie projects has confirmed the emergence of a new critical minerals province in north-west Victoria.

And with detailed engineering work underway at Goschen, continued exploration at Cannie and Nowie, as well as ongoing approvals and offtake discussions, investors can expect a strong newsflow from VHM across the next twelve months.

Every new announcement will further de-risk what is destined to be a near-term rare earth and mineral sands operation to support the world’s decarbonisation.

Published as a feature article in the June–July edition of Australian Resources & Investment.