Australian miner VHM Limited (ASX: VHM) has locked in a transformational deal to fast‑track its Goschen rare earths and mineral sands project in Victoria. The company signed a long‑term strategic partnership with Iluka Resources (ASX: ILU), including a binding offtake agreement for 100% of Goschen’s rare earths concentrate (REC) and a A$40 million convertible note funding package.
Under the deal, VHM will supply REC to Iluka’s Eneabba Rare Earths Refinery in Western Australia, which is set to become Australia’s first operating rare earths oxide refinery. The offtake runs for the life of the current mining licence (about 20 years at 5 million tonnes per annum), giving VHM long‑term revenue certainty and a clear path to a Final Investment Decision (FID).
The A$40 million funding is structured in two tranches: a A$10 million note at a 10% coupon, priced at a 30% premium to VHM’s recent share price, and a A$30 million note that will price in line with any future equity raise for the remaining project equity. This reduces dilution risk and signals strong third‑party validation of the Goschen project’s quality and strategic importance.
At the end of the June 2026 quarter, VHM reported A$13.1 million in cash and said it has about 5.8 quarters of funding based on current outgoings. The company has completed a A$5 million share placement to fund early engineering and operating costs, and is in advanced talks with export credit agencies such as Export Finance Australia for senior debt.
With all major regulatory approvals in place and the project fully permitted to mine, VHM says major work packages are being retendered and implementation is advancing. The target is to start operations at Goschen in late 2027, supporting Australia’s critical minerals strategy and building an integrated local rare earths supply chain.
FAQs [Frequently Asked Questions]
Q1: What did VHM secure with Iluka and why does it matter?
A: VHM secured a binding 20‑year offtake for 100% of Goschen’s rare earths concentrate and a A$40 million convertible note from Iluka, giving revenue certainty, lower capital intensity and a clear path to a Final Investment Decision.
Q2: How much cash does VHM have and how long will it last?
A: At the June 2026 quarter end, VHM held A$13.1 million in cash and estimated about 5.8 quarters of funding based on current cash and operating outgoings, supported by a recent A$5 million placement.
Q3: When is the Goschen project expected to start and what is the status?
A: VHM targets late‑2027 for Goschen operations, with all major approvals secured, the project fully permitted to mine, and major work packages being retendered as implementation advances toward FID.