VHM one step closer to building Goschen

VHM Limited has further de-risked its Goschen rare earths and mineral sands mine in Victoria after signing a memorandum of understanding (MOU) with the local Swan Hill council.

The MOU formalises the partnership between VHM and the Swan Hill Rural City Council, where ensuring the sustainable, social and economic future of both parties is paramount.

A framework has established how the long-term, collaborative partnership between VHM and the Swan Hill council will operate, with co-dependent responsibilities around various outcomes such as job creation, training and development, local infrastructure planning and use, and government-funded advocacy.

The MOU also concerns the environmental and social outcomes of the Goschen project.

The Swan Hill agreement comes after VHM previously inked an MOU with the Gannawarra council that includes the Victorian towns of Kerang, Cohuna and Quambatook.

“Formalising the relationship between VHM and the councils is a key indication of our mutual respect and intent to create positive opportunities for the people of the Gannawarra and Swan Hill council communities,” VHM managing director Graham Howard said.

“We look forward to continuing the close working relationship with the councils to ensure the local community benefits from employment opportunities and contributions to the local and regional economy.”

The construction and operation of the Goschen project is 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 recently announced a refresh of its 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). This equates to an average pre-tax free cash flow of $270 million per year over the mine’s first 10 years.

Having signed an offtake MOU with Shenghe Resources, VHM is advancing a formal agreement with the leading Chinese rare earths mining and processing company. The two parties hope to have this finalised by June 30.

Read Tom Parker’s article in Australian Resources & Investment