VHM Cuts Shenghe Deal, Taps Macquarie to Unlock Goschen’s Full Potential
VHM Limited has terminated its offtake agreement with Shenghe Resources to pursue broader global partnerships for its Goschen Rare Earths and Mineral Sands Project, appointing Macquarie Capital to accelerate funding and offtake discussions ahead of production in 2027.
- Termination of Shenghe Resources offtake agreement
- 100% of Goschen rare earths concentrate now available for new partners
- Macquarie Capital appointed as financial advisor
- All major permits secured for Goschen project
- First production targeted by end of 2027
Strategic Shift in Offtake Approach
VHM Limited (ASX – VHM) has taken a decisive step to enhance its strategic flexibility by terminating the previously announced offtake agreement with Shenghe Resources. This move comes after several conditions precedent to the deal were not met, prompting VHM to open the door to a wider range of global partners interested in the critical minerals sector.
The Goschen Rare Earths and Mineral Sands Project, located in Victoria’s Loddon Mallee region, is poised to become a significant supplier of rare earth elements and mineral sands concentrates. With all major permits now secured, including environmental, mining, and cultural heritage approvals, the project is on track for first production by the end of 2027.
Macquarie Capital to Drive Partnership and Funding Talks
To capitalise on growing global demand for critical minerals, VHM has appointed Macquarie Capital as its financial advisor. Known for its global reach and expertise in strategic transactions, Macquarie will lead discussions with potential offtake partners and financiers, aiming to maximise shareholder value and project flexibility.
This appointment signals VHM’s intent to leverage the surging demand driven by the global energy transition, electrification, and advanced manufacturing sectors. By retaining 100% control over its rare earths concentrate output, VHM is positioning itself to negotiate from a place of strength.
Robust Project Fundamentals Support Growth
The Goschen Project boasts a dual commodity profile, producing both rare earth elements, including light elements like Neodymium and Praseodymium, and heavy elements such as Dysprosium and Terbium, and heavy mineral concentrates like zircon and titanium oxide. Its shallow-pit mining and conventional processing methods add operational simplicity.
Strategically located with access to road, rail, and port infrastructure, and backed by conditional support letters from Export Finance Australia and the US Export-Import Bank, Goschen is well-positioned to meet rising global demand for critical minerals.
Looking Ahead
VHM’s strategic pivot away from a single offtake partner towards a diversified partnership approach reflects a broader trend in the critical minerals sector, where flexibility and access to multiple markets are increasingly prized. As the company advances towards production, investors will be watching closely to see how these new partnerships and funding arrangements materialise.
Bottom Line?
VHM’s broadened offtake strategy and Macquarie partnership set the stage for a dynamic run-up to Goschen’s 2027 production milestone.
Questions in the middle?
- Which global partners will VHM engage with following the Shenghe termination?
- How will the new offtake arrangements impact project valuation and financing terms?
- What are the potential timing risks for Goschen’s first production given the strategic shift?
