VHM fortifies development plans with A-list board members

In a strategic move to bolster the development plans of VHM Limited (ASX: VHM) for their flagship Goschen Project, the rare-earths developer has appointed three new directors to the board. Each brings a unique skill set that will drive the company through their next chapter as a globally significant producer of the critical minerals that are desperately required for the energy transition.

In a strategic move to bolster the development plans of VHM Limited (ASX: VHM) for their flagship Goschen Project, the rare-earths developer has appointed three new directors to the board. Each brings a unique skill set that will drive the company through their next chapter as a globally significant producer of the critical minerals that are desperately required for the energy transition.

New Non-Executive Director Ian Smith brings over 40 years of experience in senior executive and board roles at Rio Tinto, Newcrest Mining, EMR Capital, WMC Resources and Orica. Ian was brought in as Managing Director and CEO of Newcrest in 2006, and took the gold miner’s share price from less than $20 up to more than $40 in 2011 – its all time high.

Ian is currently a Senior Consultant for EMR Capital, Australia’s premier resources private equity fund manager. EMR has owned nine mining operations and projects in seven countries around the world, and has a team with over 300 years of combined mining operations and investment experience. Mr Smith’s highly relevant development and operational experience will be a valuable addition to VHM’s board.

Also joining as a Non-Executive Director is Ron Douglas, who brings over 40 years of experience in the mining and construction industries. Ron has extensive experience in delivering large capital projects for some of the industry’s biggest operators, including Rio Tinto, Orica and Newcrest.

VHM’s board will also be bolstered by Maree Arnason, who will be joining as a Non-Executive Director. Maree is a highly regarded director and senior executive and brings more than 35 years of experience in the natural resources, energy and manufacturing sectors and has worked across a variety of commodities.

The operational knowledge that the new directors bring to the table will be invaluable to guide the executive team through the build, commissioning and operation phases required to produce and sell rare earth mineral products from the Goschen Project. VHM is now focused on appointing a Managing Director or CEO who has the appropriate type of project development experience. This is expected to occur before 30th of September, at which time the current Managing Director Graham Howard will transition to a Non-Executive Director role and will  focus on the Victorian approvals process which is approaching Public Exhibition stage and is a critical path for VHM.

Delivering Goschen Project potential

VHM’s Definitive Feasibility Study (DFS) refresh for their flagship Goschen Rare Earths and Mineral Sands project, which boasts a pre-tax A$1.525 billion Net Present Value (NPV) and a 44% Internal Rate of Return (IRR); has recently had its permitting process further advanced.

The 20 year mine life is based on 99Mt of ore reserves, only half of the Company’s 199Mt reserves and a fraction of their mineral resource inventory. Phases 1 and 1A come with a  capex of A$500 million (plus an additional $106 million in ancillary pre-production mining start-up costs). These phases are expected to produce average annual EBITDAX of A$291 million during the first 10 years of mine life. The payback period is just 2.8 years.

Rare earths are expected to make up 76% of product revenue, while mineral sands will account for the remaining 24%. The Goschen project is most sensitive to the AUD/USD exchange rate and rare earths prices, but is far less sensitive to mineral sands prices, capital and operating costs. The company’s operating costs will be just $57/tonne of ore.

VHM has continually received support from the Federal government, which includes being designated ‘Major Project Status’. Major Project Status means Canberra views the Goschen project as commercially viable and of significant economic interest to Australia. The designation is crucial to the final stage of approvals process, as the Federal government provides significant support with the state and territory approvals process to bring the project into production.

VHM is keenly focused on delivering the potential of the Goschen Project. Chairman of VHM, Don Runge, noted that the addition of the three board members will “position VHM for the exciting next phase of development and construction that will bring the world-class Goschen Project into production.”

Past performance is not a reliable indicator of future performance.

Reach Markets has been engaged by VHM Limited to assist with their investor communications and may receive fees for its services.

 

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