VHM Limited, announced the metallurgical test results from static trials conducted by leading rare earth research and testwork facility Australian Nuclear Science and Technology Organisation. The results have confirmed exceptional leach extraction rates are possible from the Rare Earth Mineral Concentrate at the Goschen Project deposit. The testwork is being undertaken to finalise the plans and inform final assessment of the Hydromet Plant at the Goschen Project.

The samples used at ANSTO for metallurgical testwork are based on a sonic bulk sample drill program that the Company undertook during 2022, within Area 1 and Area 3 Extended. A total of 223 holes in Area 1 and 65 holes in Area 3 Extended were drilled, totalling 8,310.4m, using sonic and diamond drill rigs. The intent of the bulk sampling program was to generate sufficient REMC for pilot plant testwork to support the Hydromet Plant process development.

VHM has completed comprehensive testwork previously at ANSTO as well as flowsheet evaluation testwork in 2018 on a typical sample of REMC from the Goschen Project. The recent work demonstrated that the Goshen REMC is highly amenable to processing through to a high value upgraded Mixed Rare Earth Carbonate product as set out in the Prospectus dated 21 November 2022 as supplemented by the supplementary prospectus dated 5 December 2022, lodged with ASX on 5 January 2023. Based on the ANSTO testwork the Company selected the Sulphate Bake route, as it provides the highest extractions and most robust economic case.

In preparation for pilot plant testwork, ANSTO has undertaken pre-pilot testwork using the industry standard acid baking and water leach route. The purpose of this work is to define piloting conditions such as acid addition, kiln temperature and reaction time. The pre-pilot testwork has demonstrated exceptional extractions >99% for the critical light rare earth metals and >98% for the critical heavy rare earth metals.

Testwork for the subsequent stages of the Hydromet Plant is ongoing. Projected commercial recoveries will be further defined at the pilot plant testwork stage. ANSTO continues with pre-pilot optimisation in parallel with the design and procurement of equipment for the pilot due to commence in First Quarter of 2023.

When complete, the pilot will demonstrate the entire flowsheet from REMC to the MREC product and include water and reagent recycle. The pilot plant flowsheet that has been developed by ANSTO for the Goschen REMC. The REMC is considered industry leading not only in its exceptionally high rare earth grade, but also in the very high proportion of high value critical rare earths Pr, Nd, Tb and Dy.

These rare earths are essential to the automotive industries transition from internal combustion engine vehicles to battery electric vehicles and plug-in hybrid electric vehicles. The combination of the exceptionally high grade REMC in conjunction with demonstrated high extraction rates is expected to result in low capex and opex to produce the MREC product. As a result of the purity, there are expected to be lower reagent costs, smaller kiln, and lower energy costs, adding to VHM's competitive proposition.

The Company will commence pilot plant testwork in First Quarter 2023 with ANSTO, the results of which will inform a future engineering study scheduled thereafter. Piloting will give VHM detailed engineering solutions, the ability to order long-lead items for the Hydromet Plant and provide product offtake for marketing.