VHM Confirms $807M NPV and 33% IRR at Goschen With 3-Year Payback
Key Takeaways
- The refreshed DFS confirms a pre-tax NPV8 of A$807 million, a 33% IRR, and a 3-year payback from production commencement, all based on 2026 market-tested costs rather than historical assumptions.
- A co-product structure cuts the effective unit operating cost from US$21/kg REO gross to just US$7/kg REO net of HMC credits, materially strengthening Goschen's resilience across commodity price cycles.
- All key Federal and Victorian approvals have been secured — including Mining Licence, EPBC, and Planning Scheme Amendment — removing regulatory uncertainty as a project risk ahead of FID.
- Funding support totalling up to approximately A$315 million equivalent is in place or in progress, including a binding A$40 million Iluka cornerstone, a conditional EFA letter of support for up to A$75 million, and a US EXIM Letter of Interest for up to US$200 million.
- The DFS mine plan processes only 93 Mt of ore — less than 50% of the 220 Mt Ore Reserve and less than 12% of the 890 Mt Mineral Resource — leaving substantial resource optionality outside the base case entirely.
Goschen DFS refresh confirms $807M NPV and 3-year payback
VHM Limited has completed a comprehensive refresh of its Definitive Feasibility Study (DFS) for the 100%-owned Goschen Rare Earths and Mineral Sands Project in Victoria. The refreshed study confirms a pre-tax, pre-corporate NPV8 of A$807 million, an IRR of 33%, and a payback period of 3 years from commencement of commercial production, all based on current 2026 market-tested costs rather than historical assumptions.
The project is fully permitted, with a clear pathway to funding, Final Investment Decision (FID), and construction.
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Key DFS metrics at a glance
| Category | Metric | Value |
|---|---|---|
| Project Returns (pre-tax, pre-corporate) | NPV8 | A$807 million |
| Project Returns (pre-tax, pre-corporate) | IRR | 33% |
| Project Returns (pre-tax, pre-corporate) | Payback from production commencement | 3 years |
| Capital & Funding | Execution capital (incl. A$23.5M contingency) | A$283 million |
| Capital & Funding | Total funding required | A$482 million |
| Operations (life-of-mine annual average) | Ore processing throughput | 5 Mtpa |
| Operations (life-of-mine annual average) | Initial mine life | 18 years |
| Operations (life-of-mine annual average) | Rare Earth Concentrate (REC) production | 8,300 tpa |
| Operations (life-of-mine annual average) | Nd-Pr contained in REC | 990 tpa |
| Operations (life-of-mine annual average) | Dy and Tb contained in REC | 115 tpa |
| Operations (life-of-mine annual average) | Zircon-titania HMC production | 131,000 tpa |
| Financial (life-of-mine annual average) | Revenue | A$326 million |
| Financial (life-of-mine annual average) | EBITDA (before corporate costs) | A$146 million |
| Financial (life-of-mine annual average) | Unit operating cost net of HMC credit (real 2026) | US$7/kg REO |
What makes Goschen stand out as a rare earths project
Rare earths projects live or die on their cost structure. Most produce a single product stream, leaving them fully exposed to the volatility of rare earth prices. Goschen produces two independent revenue streams: rare earth concentrate and zircon-titania heavy mineral concentrate (HMC). That second stream matters significantly because HMC revenue offsets a large portion of the operating cost, reducing the effective unit cost from US$21/kg REO gross to just US$7/kg REO net of HMC credits. That cost position strengthens the project’s resilience across commodity price cycles.
The rare earth assemblage itself is strategically valuable. Neodymium and praseodymium (Nd-Pr) are light rare earths used in permanent magnets for electric vehicles and wind turbines. Dysprosium and terbium (Dy and Tb) are heavy rare earths that improve the heat tolerance and performance of those same magnets, making them critical for defence and advanced clean energy applications. Supply of heavy rare earths outside China is particularly limited, which is why Goschen’s life-of-mine average of approximately 115 tpa of contained Dy and Tb draws strategic interest.
A DFS refresh is not a new study. It is a rigorous update of cost inputs, engineering quantities, schedule assumptions, and pricing to reflect current market conditions. Investors can therefore treat the A$807 million NPV figure with greater confidence than one drawn from older inputs, because the numbers reflect 2026 market-tested tenders and vendor quotations.
The project’s scale also leaves significant optionality intact. The DFS mine plan processes approximately 93 Mt of ore, representing less than 50% of the 220 Mt global Ore Reserve and less than 12% of the 890 Mt Mineral Resource. No value from potential extensions or expansions is included in the base case, meaning the financial returns presented are conservative relative to the full resource endowment.
Goschen’s expanded exploration target and tier-one scale resource base underpin the optionality that sits outside the DFS base case, with the 890 Mt Mineral Resource representing a resource endowment the current mine plan has barely touched.
The Iluka partnership and sovereign supply chain angle
A binding offtake agreement with Iluka Resources underpins the commercial pathway for Goschen’s rare earth concentrate. Key attributes of the Goschen-Iluka arrangement include:
- Take-and-pay offtake for rare earth concentrate to Iluka’s Eneabba Refinery
- Cornerstone A$40 million funding package for the Goschen Project
- Pricing and payability methodology under the binding agreement incorporated directly into the DFS financial model
- Eneabba described as Australia’s first fully integrated rare earth refinery producing separated light and heavy rare earth oxides
This mine-to-refinery pathway (Goschen to Eneabba) supports Australian objectives for a sovereign, fully integrated rare earth supply chain from mine through to separated oxides, an objective with growing policy and strategic relevance.
Fully permitted and construction-ready — the approvals timeline
All key Federal and Victorian approvals required for Goschen’s development have been secured. For investors assessing project risk, a fully permitted status is a material de-risking factor: regulatory uncertainty is one of the most common causes of delay and cost overrun in resource development projects.
The approvals were received as follows:
- EES endorsement: December 2024
- Mining Licence: April 2025
- EPBC approval: September 2025
- Cultural Heritage Management Plan approval: October 2025
- Work Plan approval: November 2025
- Planning Scheme Amendment: August 2026
Beyond approvals, major work packages have been market-tested via retender in Q2 2026, shortlisted contractors have been identified, and an integrated execution schedule has been developed. This materially reduces procurement and schedule uncertainty heading into FID.
The project is also expected to create approximately 170 construction-related jobs and 200 ongoing operational roles in regional Victoria.
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Funding pathway and next steps toward FID
Completing the financing plan and progressing toward FID and construction is the near-term priority for VHM. Funding support received to date includes:
- Iluka cornerstone: A$40 million binding package
- Export Finance Australia (EFA): a non-binding and conditional Letter of Support for up to A$75 million, subject to conditions, due diligence, approvals and definitive documentation
- Export-Import Bank of the United States (EXIM): a Letter of Interest for up to US$200 million, subject to conditions, due diligence, approvals and definitive documentation
The next steps disclosed in the announcement are:
- Complete the financing plan and lender due diligence toward financial close
- Finalise preferred work-package contracts for award following FID
- Advance critical-path engineering, vendor data and long-lead equipment planning
- Complete HMC offtake arrangements and progress strategic partnership discussions
- Continue operational readiness, detailed execution planning, resource definition and exploration programmes
CEO Andrew King
“The refreshed DFS demonstrates the financial strength and development readiness of Goschen.”
King added that with all key approvals secured, major packages market-tested and the execution schedule refreshed, the company’s priority is to complete financing and progress Goschen toward FID and construction.
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