VDM Group Battles Ownership Dispute and ASX Suspension Amid Critical Minerals Pivot

Ownership Dispute Halts Angolan Operations

VDM Group Limited’s latest quarterly report reveals a significant impasse in its Angolan mining ventures. The company is embroiled in a dispute with its joint venture partner, Pebric Mining and Consulting LDA, which has unilaterally claimed full ownership of the Cachoeiras do Binga and Cage Bengo projects. This move directly contravenes the joint venture agreements, leaving VDM uncertain about its legal rights and the tenure of the mining licenses.

As a result, VDM has suspended all exploration activities on these projects since the dispute arose, with no work conducted during the December 2024 quarter. The company has engaged legal counsel in Angola to clarify its position and protect its interests, but the outcome remains uncertain.

ASX Trading Suspension Persists

Compounding VDM’s challenges, the Australian Securities Exchange (ASX) has maintained its suspension of VDM’s securities since November 2023. The ASX determined that VDM’s current operations do not meet the requirements of Listing Rule 12.1, which mandates an adequate level of ongoing business activity to justify quotation. Until VDM can demonstrate compliance, trading will remain halted.

VDM is actively exploring a range of business opportunities to satisfy the ASX’s criteria. The company has engaged legal advisors to assist in this process and is focusing on critical minerals projects within Australia that could provide early cash flow and complement its existing portfolio.

Pivot to Critical Minerals in Australia

In light of the uncertainty surrounding its Angolan assets, VDM is shifting its strategic focus towards critical minerals projects domestically. The company is evaluating opportunities primarily involving uranium, copper, lithium, and other minerals deemed essential for the energy transition and technology sectors.

This pivot aligns with broader market trends where demand for critical minerals is surging globally. VDM’s management emphasizes the importance of securing projects that are value accretive and capable of generating early cash flow, which is crucial for regaining ASX listing status and restoring investor confidence.

Financial Position and Funding

VDM’s cash reserves remained relatively stable at $2.072 million as of 31 December 2024, down slightly from $2.102 million at the previous quarter’s end. The company reported minimal operating cash outflows and no exploration expenditure during the quarter, reflecting the operational pause in Angola.

Importantly, VDM has access to secured loan facilities totaling $11.95 million from its largest shareholder, Australia Kengkong Investments Co Pty Ltd, controlled by Chairman Luk Hiuming. These loans carry a 6% interest rate and are secured against company assets, providing a financial buffer as VDM navigates its current challenges.

Looking Ahead

VDM Group’s immediate future hinges on resolving the Angolan dispute and successfully identifying and advancing new critical minerals projects in Australia. The company has committed to keeping shareholders informed of material developments as they arise. Meanwhile, the ASX suspension remains a significant hurdle, underscoring the urgency for VDM to demonstrate viable operations.