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VHM Limited may have only just listed, but the company has an advanced Australian rare earths and mineral sands project at its disposal.
Early 2023 saw one of the most anticipated ASX listings in recent times with the emergence of established rare earths explorer and future producer VHM Limited.
VHM is not a new company, nor is it immature. Founded in 2014, VHM has been steadily developing and de-risking its Goschen rare earths and mineral sands project in Victoria to where it is today.
For VHM’s Graham Howard, who began as the company’s managing director in September 2016, the Goschen dream commenced in 2015.
At this time, Howard, a mining industry veteran with more than 35 years’ executive leadership and operations management experience, including at Newcrest Mining, and VHM chair Don Runge, who led the initial development of the gold-industry-defining Cadia-Ridgeway deposit, were working together in the Philippines.
“In 2015, we (Howard and Runge) were sitting in the Philippines talking and I said, ‘Look, we really need to build a major renewable or critical minerals project in Australia, it’s clearly a missing piece’, and we set out to do that soon after,” Howard told Australian Resources & Investment.
“VHM was established by two previous directors, who were looking for zircon and titania. And we were looking for the critical minerals, which were the rare earths, but we also had a view that zircon and certain species of titania, if you like, were going to be very critical in the years to come.”
But Goschen was not only identified as a project with rare earths and mineral sands potential, there was more to the geology than that.
“Goschen has a very unique granite,” Howard said. “You might know about Greenland and this giant granite it has. Well, we also have one in Australia – the Lake Boga granite – and VHM’s tenements cover this. The Lake Boga granite is full of rare earths pegmatites.”
The mineral sands are seen a critical value-add to the rare earths material.
“From our (Howard and Runge’s) background, we’re used to large, low-cost, open pit and underground mining operations, and because of this, we knew we had to look for a dual commodity stream,” Howard said.
“So the by-products we wanted to see would pay for the operating costs and the primary minerals, we would actually be able to sell those and we would be able to produce those at an exceptionally low cost.
“An example was Ridgeway – where the copper paid for all the gold costs. So when we went into this project, we were looking at zircon and titania as the by-products and the rare earths as the primary minerals targeted.”
Howard said Goschen is a “rehabilitation mining story”, meaning the project is designed to be progressively rehabilitated as it produces.
“You dig the material out, but you replace it with the sand and the slimes, and it’s co-disposed and rehabilitated as you go,” he said. “So there’s no surface tailings, there’s no permanent waste dumps and there’s no visual scars.
“This process allows you to extract critical minerals such as the rare earths and rehab the ground as you go. This is a really important segue on why we did it – we were looking at how we could mine in a sustainable manner in the future.”
VHM delivered its maiden resource for Goschen in 2016, and successive resource upgrades followed between 2017 and 2022. The company has also released a series of engineering and metallurgical studies, including bulk samples, a pre-feasibility study and in March 2022, completed its definitive feasibility study (DFS).
The DFS was based on rigorous testwork completed by Mineral Technologies and Australian Nuclear Science and Technology Organisation (ANSTO), which validated the flowsheet and demonstrated Goschen’s capacity to produce in-demand heavy mineral concentrate (HMC), rare earth mixed concentrate (REMC) and mixed rare earth carbonate (MREC) products.
This will involve the open-pit mining of ore at a feed rate of five million tonnes per annum (Mtpa) into Goschen’s processing plant.
But Goschen doesn’t involve your typical open-pit mining procedure.
“What we’re doing is mining and processing the material on the flanks of this giant (Lake Boga) granite,” Howard said.
“Why is this unique? Well, the sea has been washing over this island, but unlike other rare earth deposits around the world, which are effectively all hard rock, the sea has removed the rare earths, and in that process it chemically and physically removes the gangue minerals – the feldspar, the quartz and the mafic minerals – that actually join onto the rare earths. So you end up with this incredibly pure rare earth matrix.”
Howard said this supports the processing of the material.
“If it is a hard rock rare earths project, typically you would have a drill and blast operation, the rock would be crushed, and then put through a comminution circuit where it is grinded and turned into sand.
“The sand unfortunately has all that gangue minerals around the rare earths. So even though you’ve turned it into sand, you still have this huge energy and capital equation to create the product.
“The beauty about this project is the sea has done all the work, so we remove all that step and the sea has concentrated the rare earths into horizons which can be economically mined using conventional mining.”
The material then goes through a conventional, low-cost processing phase before the HMC, REMC and MREC products are produced. Howard said the Goschen project has the potential to be a “nation-building exercise”.
“What we (Howard and Runge) were thinking in 2015, is we could see that we could kickstart a major manufacturing phase on the eastern seaboard by creating exceptionally low-cost critical minerals, which could then feed into the supply chain,” he said.
“The other thing we picked up is that the sheer scale of the opportunity would probably allow the company, with sufficient and appropriate exploration and project development, to establish significant deposits which could feed global markets.”
To complement its own belief in the Goschen project, VHM 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 dual products based on a take or pay offtake agreement over an initial three-year term.
Goschen has also been granted ‘Major Project Status’ recognition from the Australian Government, which recognises projects that are significant to the Australian economy.
Having recently listed on the ASX – in combination with a $30 million initial public offering (IPO) – and with the backing of PFS, DFS and other important scoping studies, VHM is targeting a final investment decision in the second half of 2023.
This will coincide with the goal to achieve primary approvals in 2023 and secondary approvals in the first half of 2024, before construction can commence in 2024 and commissioning of the Goschen treatment facility can begin in the first half of 2025.
It may have only just floated but VHM is well on its way to becoming a producer, with a lucrative dual commodity stream at its disposal.
Read Tom Parker’s article in Australian Resources & Investment
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