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Australian Mines Increases Sconi Project Mineral Resource

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THE DRILL SERGEANT: Australian Mines (ASX: AUZ) released an updated Mineral Resource estimate for the company’s 100 per cent-owned Sconi cobalt-nickel-scandium project in North Queensland.

Australian Mines said it anticipated the new Mineral Resource estimation to result in substantial flow-through benefits to the project’s overall development economics.

A recent expansion drilling program delineated consistent high-grade nickel and cobalt zones across the project area, with some assays from the program exceeding previous results.

The Greenvale nickel deposit’s in-situ material now stands at 24.4 million tonnes, up 63.2 per cent from 14.95 million tonnes in the previous estimate with the adjacent Lucknow deposit now at 14.62 million tonnes, up 94.6 per cent from 7.51 million tonnes previously.

The two deposits, combined with the Kokomo deposit, take the project’s total to 75.71 million tonnes at 0.6 per cent nickel, 0.08 per cent cobalt (0.83 per cent nickel equivalent) for 455,579 tonnes nickel, 57,157 tonnes cobalt (627,945 tones nickel equivalent).

“This Mineral Resource update for the Sconi project is a major boost for the company’s development plans, as we head towards our target of first construction activities at Sconi later this year, pending a final investment decision on the project,” Australian Mines managing director Benjamin Bell said in the company’s announcement to the Australian Securities Exchange.

“With an updated Mineral Resource, Australian Mines is positioned to become a significant cobalt, nickel and scandium supplier through the Sconi project – a project that has already shown to be commercially viable via the November 2018 Bankable Feasibility Study.

“This updated Mineral Resource is likely to further enhance the economics of the project, and in turn provide additional long-term benefits for our investors and off-take partner.

“The fact we have managed to almost double the Resource tonnage at the Lucknow deposit, which will be our initial primary source of cobalt production and added significant tonnes at the previously-mined Greenvale deposit is testimony to the world-class nature of the Sconi project, as well as the scale and grade of the mineralisation contained within our broader tenement package.”

 

Email: info@australianmines.com.au

Website: www.australianmines.com.au

 

Australian Mines Pumped by Independent Study Results

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THE BOURSE WHISPERER: Australian Mines (ASX: AUZ) released the findings of an independent study of the company’s Sconi cobalt-nickel-scandium project in North Queensland.

Australian Mines commissioned the independent nickel and cobalt sulphate Market Study that was undertaken by commodity research specialist CRU International.

CRU forecasts that the 2025 value-adjusted business costs of the Sconi project would place it in the 1st quartile compared to other existing and proposed analogous operations globally, based on the outcomes of financial modelling Australian Mines released in its base case Bankable Feasibility Study (BFS)

Australian Mines described Sconi as a late-stage, laterite-hosted cobalt-nickel-scandium project with payable metals expected to be produced annually, on average (based on an 18-year mine life), of 8,500 tonnes of cobalt sulphate and 53,300 tonnes of nickel sulphate.

The company completed a Mineral Resource extension drilling program in late 2018 and expects to be able to release an updated Mineral Resource Estimate for Sconi in the March quarter, which will feed into an optimised BFS on the project.

“We felt it was prudent to get an updated expert view of the medium and long-term market forecasts for nickel and cobalt, and confirm our BFS modelling that pointed to Sconi being a 1st quartile low-cost producer, hence giving Australian Mines a competitive advantage if commodity prices do fluctuate in the medium term,” Australian Mines managing director Benjamin Bell said in the company’s announcement to the Australian Securities Exchange.

“CRU International is a respected commodity research firm when it comes to detailed analysis of battery and technology metals in particular, and provided deep insight into the forecast supply, demand and pricing dynamics for cobalt and nickel sulphate products.

“The Market Study serves to demonstrate that there will be a very significant opportunity for new nickel sulphate and cobalt sulphate market entrants, including Australian Mines, and the price environment is expected to be very favourable for low-cost producers.

“Sconi is on track for first production in 2021 and CRU International’s modelling of our operating expenditure versus likely competitors based on the base case BFS for Sconi is highly encouraging at a critical time for the project as we work to progress project financing arrangements.

“The characteristics of the Sconi Resources, being able to produce a high-value cobalt sulphate product alongside the larger scale nickel sulphate production, places our project firmly at the bottom of the cost curve, which of course translates to greater future profitability and insulates us from potential nickel sulphate price shocks.”

 

Email: info@australianmines.com.au

Website: www.australianmines.com.au

 

Australian Mines Picks-up Healthy R&D Rebate

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THE BOURSE WHISPERER: Australian Mines Limited (ASX: AUZ) received a rebate from the Australian Taxation Office of $1,911,075 in relation to the company’s research and development (R&D) expenditure during the 2017-18 financial year.

Australian Mines picked up the cheque in addition to a $295,765 R&D tax rebate it received in October 2018 and relates to continued development work completed at the company’s demonstration-size High-Pressure Acid Leach (HPAL) and solvent extraction (SX) plant located in Perth, Western Australia.

“The operation of the demonstration plant has continued to play an instrumental role for Australian Mines in our strategy to maximise economic returns from our assets, especially our flagship Sconi cobalt-nickel-scandium project in North Queensland,” Australian Mines managing director Benjamin Bell said in the company’s announcement to the Australian Securities Exchange.

“Not only has operation of the plant allowed optimisation of the proposed flowsheet for Sconi, the R&D work conducted has also allowed us to explore potential future commercial opportunities for scandium oxide expected to be produced at Sconi.”

Email: info@australianmines.com.au

Website: www.australianmines.com.au

Australian Mines: Potential Prime Cobalt Player

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THE CONFERENCE CALLER: Addressing a crowd of potential investors at the 2018 RIU Explorers Conference, Australian Mines (ASX: AUZ) managing director Benjamin Bell declared the company’s status as the most advanced cobalt-nickel-scandium producer in Australia. By Jack Baker

Australian Mines announced on Monday that it has entered into a $5 billion off-take agreement with Korean company, SK Innovation.

The contract, for up to 13 years, is for SK to purchase 100 per cent of the product from Australian Mines’ Sconi plant in Queensland, totalling roughly $400 million worth of cobalt-nickel per year.

Part of the agreement is for SK to provide funding and to potentially take a 20 per cent stake at a 30 per cent premium.

Bell emphasised that the arrangement was more than a simple off-take relationship.

“The reason why we did this deal with SK, we’ve spoken to a number of companies, car battery manufacturers and the like,” he told the full auditorium.

“It’s not just a buyer seller relationship, it’s a partnership.

“They’ll help build the plant, come onto our board and take the product…it de-risks the project, it means it gets built.

“This is the only one in the country that shows a clear path into production.”

Bell admitted that many cobalt nickel companies have forecast growth in battery-metal demand based on the promise of the electric car but emphasised that Australian Mines is already there.

“Our cobalt-nickel is specifically going into that car,” he said.

“This is not a picture of a conceptual car…it’s going straight into Mercedes-Benz via the SK plant in Hungary.”

The company has constructed a demonstration plant in Perth for investors.

Capable of producing nickel and cobalt sulphate for sale, the plant is also capable of producing scandium oxide for other interested off-take parties.

Australian Mines has additional cobalt projects in the pipeline with the Sconi project essentially completed.

The second is in Flemington where it begins drilling next month with a third near Broken Hill.

Bell said the company would inevitably be compared to Clean TeQ (ASX: CLQ), Australia’s largest cobalt company, but iterated his belief in Australian Mines’ standing as the most advanced.

“In addition to getting ours in production probably first and being able to show a clear pathway to that, you’re also getting the upside for more than one project,” he stated.

 

Website: www.australianmines.com.au