Move over Lynas! This new Chris Ellison-backed rare earths company is set to hit the ASX

The new year might bring new possibilities for ASX rare earths fans.

| More on:
A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Rare earths and mineral sands developer VHM Limited is gearing up to float on the ASX in early 2023
  • The company is undergoing an IPO, offering shares for $1.35 apiece under its prospectus
  • The prospectus is expected to raise $20 million, with an extra $10 million of over-subscriptions also on the table

Watch out Lynas Rare Earths Ltd (ASX: LYC). There could soon be a new rare earths miner on the ASX. And this one's backed by Mineral Resources Limited (ASX: MIN) managing director Chris Ellison.

Rare earths and mineral sands developer VHM Limited is undergoing an ASX initial public offering (IPO).

The company expects to list with a market capitalisation of at least $256 million in January. It's offering shares for $1.35 apiece under its prospectus.

Let's take a closer look at what could soon be an Aussie rare earths favourite.

ASX rare earths float on the horizon

The new year will likely bring new possibilities for ASX materials fans. Mineral developer VHM Limited is gearing up for an ASX float in early 2023.

The company is developing its flagship Goschen Project in Victoria. It expects to undergo a final investment decision (FID) for the project's first phase in the second half of 2023, with production targeted in 2025.

Goschen has been found to house a "globally significant" 413,107 tonnes of total rare earths oxides.

Ellison holds a 10.3% stake in the future ASX rare earths stock – worth around $19.4 million at its offer price. The Mineral Resources boss could top up that hold under the IPO.

VHM Limited expects to raise $20 million under its prospectus. It has also allowed for up to $10 million of over-subscriptions.

The raised funds will go towards Goschen's FID. The company expects the project will cost $445 million to deliver, assuming $360 million of capital expenditure and $85 million of ancillary costs.

The company was incorporated in 2014. It raised $31.8 million earlier this year as part of a pre-IPO offer.

The ASX rare earths hopeful held $11.1 million of cash at hand as of 1 October and incurred $6.6 million of operating expenses in financial year 2022.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on IPOs

An arrow going upwards with a road sign saying 'IPO ahead'.

Should you buy into an IPO or wait until shares start trading on the ASX?

IPOs can be exciting, but also dangerous for investors.

Read more »

A female miner wearing a high vis vest and hard hard smiles and holds a clipboard while inspecting a mine site with a colleague.

ASX IPO alert: Blockbuster copper listing coming soon

Here's what you need to know about this upcoming IPO.

Read more »

IPO spelt out on a laptop with a red and green bar chart underneath.

Fewer ASX IPOs in 2023, but here's how they've performed

We reveal the top 10 new listings by size and how their share prices have changed to date.

Read more »

IPO written in yellow and stuck in the air.
Materials Shares

Rich listers are buying into the IPO of ASX lithium explorer Kali Metals

There's a new lithium share in town. Here's what you need to know.

Read more »

IPO written in circles with a man holding a smartphone and a laptop open.
International Stock News

The highs and lows of the Instacart $11 billion IPO

Here is a closer look at the latest company to hit the Nasdaq exchange.

Read more »

Two businessmen shake hands against a tech backdrop, indicating a company IPO or a merger between two technology stocks.

This $85 billion company is about to start trading on the Nasdaq. Here's what you need to know

Arm is set to join the ranks of other AI high-flyers on the Nasdaq tonight.

Read more »

A businessman hugs his computer and smiles.
Materials Shares

The ASX welcomed a new lithium stock today, and it's up 50%!

Investors have been getting excited about this new lithium stock today.

Read more »

A male investor wearing a white shirt and blue suit jacket sits at his desk looking at his laptop with his hands to his chin, waiting in anticipation.

Redox share price drops after IPO

One of the biggest IPOs in some time has taken place on the ASX today.

Read more »