VHM is one of a crop of Wimmera min sand deposits vying for...

VHM is one of a crop of Wimmera min sand deposits vying for development, been waiting a long time for them to finally get an IPO away given they failed sell it outright couple of years ago. i was disappointed in reading the prospectus, really thought the numbers would stack up better with a simple HMC concentrate sale approach. Capex and opex higher than anticipated, though I suspect sellers haven't dug too deep, just pre-IPO investors all happy to actually get their money back out of the cray pot as discussed here.

Given the money Elliston has, and Min Res or his other stable of company's penchant for business opportunities, his desire to pass Goschen on and recent backing only by way of con notes isn't very positive either. Thank dog for the rare earth boom and Chinese monazite processors right... I can't see the hydromet MREC circuit investment ever making sense or being approved and funded given the radioactive waste issue (certainly not in Victoria). For that matter, I can't see the RE-float con does them many favours until either ILU signs them up for an off-take agreement (which I doubt) or some other player builds an Aussie monazite cracking plant (which they should but NIMBY's and all that).

In short, a ~2:1 revenue to cost ratio assuming high prices for monazite-con and low transport/shipping costs, which I doubt. Revenue to capital intensity is higher than SFX and STA, and A$450M is a lot of coin to stump up for FID (assuming those numbers are accurate, which I doubt). Still, the Chinese do want our monazite even if they don;t want to pay for it, so Shenghe should play ball in assisting with the ~A$200M equity raise that will be required by the time 2024 comes around and permits are locked in. That doesn;t mean VHM is cheap, ~$100M market cap looks where they should be from a peer review perspective. ATR has a better deposit, better located and water rights locked away yet they trade <A$100M (though the dodgy chinese control and history of games makes it almost unvesitable).

It would make more sense to drop the RE-con capex and just sell it to China in one HMC bulk, depending on how much extra sand needed to be added so it can be transported and shipped without grief from the radiation levels. I wonder how trucking >90% mon-con in sea containers through Vic and some local port/ship is going to go? 90% monazite is some serious radiation levels, SFX have 2% monazite in a paramagnetic con that still needs sand added to make it bulk shippable. I think RIO's QIT Madagascar mine ships a 20% mon con in individual sea containers. The best solution is to build an Eneabba type cracking plant and accept the U+Th radioactive waste storage that comes with it. Really, a small footprint of LT sterilised tailings dams in the middle marginal farming country in return for lots of well-paid quality jobs with enormous flow-on effects for the area, Australia and green energy/transport etc... should be a no brainer.

But that seems unlikely in the near future, which is the only future VHM shareholders are looking at. Meanwhile, the pre-IPO investors are shovelling out shares while the market waits for the March 22 DFS to be touched up and released later this year. I wonder how many pre-IPO sellers are acting on the previous DFS outcomes they would be aware of, instead of waiting for retail to be brought up to speed?

Meanwhile, where VHM goes so goes much of the min sands industry. The outcome here, and implications industry wide, from monazite ascension back into high-value bi-product is enormous (for some players more than others). I'm a very interest observer...

GLTAH