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Rare earths player VHM Limited enters the ASX fray

VHM ASX

It seems a good time to take a closer look at the Chris Ellison-backed VHM Limited, the new rare earths hopeful to list on the ASX.

With the strength of a $30 million initial public offering (IPO), VHM listed with a $266 market capitalisation on January 9. This was based on a $1.35 IPO price with 22.22 million shares issued.

The company is developing its flagship Goschen rare earths and mineral sands project in Victoria, which has a mineral resource of 629 million tonnes (30.7Mt measured, 310.3Mt indicated and 287.7Mt inferred) and ore reserves of 198.7Mt (24.5Mt proved and 174.2Mt probable). These resources would support a mine life of more than 20 years.

VHM will use the IPO proceeds to progress development and exploration activities at Goschen, and will fund the company through to a final investment decision in the second half of 2023.

VHM managing director Graham Howard said the Goschen project was on its way to becoming a key part of a renewable energy future.

“We are already at an advanced stage of development and have a clear pathway mapped to producer status, with the team currently developing detailed engineering designs prior to construction of the Goschen project mine,” he said.

“The gap between the increasing demand for high-grade, ethically sourced rare earths and critical minerals from stable jurisdictions and declining supply is anticipated to widen as the world continues to transition to renewable and environmentally-friendly products.

“VHM is well positioned to become a world-leading producer and supplier of critical minerals.”

The ASX listing coincides with VHM signing a memorandum of understanding (MoU) with a subsidiary of Shenghe Resources Holding Co, a leading rare earths processing and production company.

This will pave the way for a three-year, binding take or pay offtake agreement where Shenghe will purchase rare earth mixed concentrate (REMC) and heavy mineral concentrates (HMC) from Goschen on an annual basis.

VHM’s stock dropped 16 per cent from the offer price to close the opening day at $1.14.

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