VDM Group Battles Angolan JV Dispute While Eyeing New Critical Minerals Projects

Ongoing Dispute Clouds Angolan Projects

VDM Group Limited’s latest quarterly report reveals a continuing impasse with its joint venture partner Pebric Mining and Consulting LDA over the ownership of two key Angolan projects, Cachoeiras do Binga and Cage Bengo. Pebric has unilaterally claimed full ownership of these projects, contravening the joint venture agreements and effectively sidelining VDM’s interests. This dispute has halted all exploration activities on these assets since it arose, leaving VDM in a precarious position regarding its Angolan portfolio.

The company has confirmed that while the mining licenses remain current and held by Pebric, it has engaged legal counsel in Angola to assert its rights and clarify its position under local law. However, the timeline and potential outcomes of this legal process remain uncertain, adding to investor caution.

ASX Suspension and Compliance Challenges

VDM’s shares have been suspended from trading on the ASX since November 2023 due to non-compliance with Listing Rule 12.1, which requires companies to maintain adequate operations to justify listing. The ongoing dispute and lack of activity on the Angolan projects have contributed to this suspension. The company is actively seeking to meet ASX requirements by exploring new business opportunities and restructuring efforts aimed at attracting new investors and project vendors.

Despite the suspension, VDM maintains a cash reserve of approximately AUD 1.93 million and has secured loan facilities totaling AUD 12.5 million from its largest shareholder, Australia Kengkong Investments Co Pty Ltd. These financial resources provide some runway as the company navigates its operational and legal challenges.

Strategic Pivot to Critical Minerals in Australia

In response to the difficulties in Angola, VDM is broadening its focus to critical minerals projects within Australia. The company is evaluating opportunities primarily in uranium, copper, lithium, and other minerals deemed essential for emerging technologies and energy transition. This strategic pivot aligns with global demand trends and could potentially offer earlier cash flow prospects compared to its stalled African ventures.

VDM has emphasized its vigilance in identifying projects that complement its existing portfolio and meet ASX’s operational criteria to facilitate the resumption of trading. Shareholders are promised timely updates as these developments unfold.

Board Changes Signal New Direction

The quarter also saw notable changes in VDM’s leadership. Ms Pinky Tang, a dual-qualified commercial lawyer and CPA with extensive experience in corporate advisory and cross-border transactions, was appointed as a non-executive director. Her expertise in mergers, acquisitions, and capital raising could be instrumental in steering VDM through its restructuring phase. Concurrently, Mr Michael Fry resigned from the board, marking a shift in governance as the company seeks fresh momentum.

These board adjustments underscore VDM’s intent to strengthen its corporate governance and strategic capabilities amid ongoing operational challenges.