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- Australian Mines (AUZ) has seen a 37 per cent rise in its share price after releasing its activities report for the March 2020 quarter
- Currently, the miner is advancing discussions with potential off-takers for its Sconi Project
- This project is prospective for battery-grade cobalt, nickel and scandium
- Test samples of these materials are being supplied to potential partners to secure an offtake agreement and funding
- Scandium has recently been classified as a critical commodity, driving further interest in the Sconi Project
- Australian Mines is also seeking a 100 per cent Carbon Neutral status by mid-year
- This aligns with its goal of building a long-term, sustainable business
- As its focus for 2020 is on Sconi, the company’s Thackaringa and Flemington projects have taken a back seat
- Australian Mines is up 37.5 per cent and shares are trading for 1.1 cents each
Australian Mines (AUZ) has seen a 37 per cent rise in its share price after releasing its activities report for the March 2020 quarter.
The company focused on further developing its wholly-owned Sconi Cobalt-Nickel-Scandium Project in North Queensland. Specifically, it’s in the midst of advancing discussions with potential off-takers for the Sconi Project.
Once operational, Australian Mines hopes to be at the forefront of the battery sector.
Off-take discussions
The miner has stated COVID-19 hasn’t affected its discussions with off-take partners. In fact, they are advancing quite well. Last month, potential partners requested Australian Mines supply them with battery-grade nickel sulphate, cobalt sulphate crystals, and high purity scandium oxide for independent testing.
The test samples are being produced from Sconi ore that is being processed at the company’s demonstration plant in Perth, WA. The test sample production is continuing as planned.
Australian Mines hopes the sample production leads to a binding off-take agreement and funding for the Sconi Project.
Additionally, the planned production runs will create high-purity scandium oxide to suppler to a potential research and development partner.
Recently, the Australian and U.S. governments, as well as the European Union, have classified scandium as a ‘critical commodity’. This has driven even more interest in the Sconi Project as a source for high purity scandium oxide.
“The company is well-positioned to take advantage of the expected increase in global demand for nickel and cobalt, despite the current challenges, as they are key required commodities used by electric vehicle battery makers, auto manufacturers and in the storage and delivery of clean, sustainable energy sources,” Managing Director Benjamin Bell said.
Sconi Cobalt-Nickel-Scandium Project
The Sconi Project is located roughly 250 kilometres from Townsville, North Queensland.
It is expected to be one of the most cost-competitive cobalt-producing nickel operations in the world.
Over its initial 30-year mine life, Sconi is estimated to produce 1,405,000 tonnes of nickel sulphate and 209,000 tonnes of cobalt sulphate. This tonnage is sufficient to produce the equivalent of at least 3 million to 6 million electric vehicle batteries.
Once in production, the project is expected to produce a total free cashflow after tax of $5 billion for a capital payback of 4.4 years on a pre-tax basis and 5.8 years on a post-tax basis.
“With a pre-tax net present value (NPV) of $1.47 billion, the Sconi Project can genuinely be classed as a world-class cobalt and nickel asset,” the company stated in today’s announcement.
Before the end of June, Australian Mines will conduct pre-construction work on shared public-use infrastructure in North Queensland. This is set to provide benefits and jobs to local businesses and the community. However, this will need to comply with the community restrictions that are currently in place due to COVID-19.
The Sconi Project has been granted “Prescribed Project” status by the Queensland Government. This means the company can smoothly develop the mine site into a world-class, Tier-1 project. Australian Mines will continue to liaise closely with the government to maximise advantages.
Carbon neutral status
Australian Mines has also announced today that it is targeting a complete carbon neutral status by June 30 2020.
This goal stems from its ongoing commitment to building a long-term, sustainable business.
Last month, Australian Mines’ application to be a member of the Initiative for Responsible Mining Assurance (IRMA) was approved.
“Australian Mines is a responsible corporate citizen that plans to deliver a globally significant, ethical, reliable and sustainable source of technology metals to the rapidly growing Electric Vehicle and Energy Storage industries,” Benjamin said.
“We will join more than 90 organisations across Australia that have attained certified carbon neutrality, leading to over 15 million tonnes of carbon emissions being offset or the equivalent of 4 million cars being off the road for a year,” he added.
The company will partner with Pangolin Associates, a leading consultancy for sustainability, carbon and energy management. Together, they will develop a carbon neutrality plan.
Australian Mines is now working towards IRMA certification for the Sconi Project.
Flemington Cobalt-Scandium-Nickel Project
Australian Mines’ wholly-owned Flemington Cobalt-Scandium-Nickel Project is located approximately 370 kilometres west of Sydney in New South Wales.
It hosts a Mineral Resource of 2.5 million tonnes at 0.103 per cent cobalt and 403 parts per million (ppm) scandium in the measured category. The indicated resource includes 0.2 million tonnes at 0.076 per cent cobalt and 408ppm scandium.
Last year, drilling confirmed a continuous high-grade zone. In the December quarter, the company announced it had initiated additional drilling at Flemington. The results from this program are pending and are due during the current quarter.
Australian Mines has been gearing up to provide an updated mineral resource for the project but, due to travel restrictions, this will be postponed.
In terms of further work at Flemington, the company doesn’t have any planned as its main focus is on the Sconi Project.
Thackaringa Cobalt Project
The Thackaringa Project is an early-stage exploration project located near Broken Hill in New South Wales.
Areas of elevated cobalt and interpreted bedrock-hosted conductive bodies have been identified following previous surface geochemical sampling programs. The company believes there may lie a massive sulphide body in this area. It intends to undertake a maiden drilling program later this year.
Australian Mines is up 37.5 per cent and shares are trading for 1.1 cents each at 11:41 am AEDT.
