Scandium International Mining Corp. [TSX:SCY] (OTC:SCYYF) - Price = CAD 0.30, USD = 0.25
Scandium International currently has a market cap of CAD 69m.
Scandium International's flagship project is the 80% owned Nyngan Scandium Project, at Nyngan in New South Wales, Australia. It is the largest scandium only resource in the world.
Their NI 43-101 Measured & Indicated resource is Measured: 5.7Mt @ 256 ppm Sc/t, and Indicated: 11.2Mt @ 225 ppm Sc/t.
Minerals exploration at the site has defined a measured and indicated resource significantly larger (7X) than the currently planned 20-year mine life outlined in the feasibility study.
Nyngan is a surface mine-able resource, with an excellent infrastructure & jurisdiction.
May 2016 Definitive Feasibility Study highlights for the Nyngan scandium project:
"Capital cost estimate for the Project is US$87.1 million,
Operating cost estimate for the Project is US$557/kg scandium oxide, selling price forecast at US$2,000/kg scandium oxide
Oxide product volume averages 37,690 kg per year, over 20 years,
Project Constant Dollar post-tax NPV10% is US$177 million, (post-tax NPV8% is US$225 million),
Project Constant Dollar IRR is 33.1%,
Oxide product grades of 98-99.9%, as based on customer requirements,
Project resource increases by 40% to 16.9 million tonnes, grading 235ppm Sc, at a 100ppm cut-off in the measured and indicated categories, and
Project Reserve totaling 1.43 million tonnes, grading 409ppm Sc was established on part of the resource."
Source
The project has received all key approvals, including a mining lease, necessary to proceed with project construction. Initial off-take agreement of 7,500 kg/year (3 years, renewable) is in place. Production targeted for 2019 at approximately 38,000 kg per year of scandium oxide (scandia) (Sc2O3).
Financing for construction and further off-take partners is currently being sought.
The DFS outlines a 20-year mine life using less than 10% of M&I resources; hence there is a large potential to expand mine output, extend mine life, or both. The company also has an adjacent project - the Honeybugle Scandium Project. Drill results similar to Nyngan property with 30 exploration holes drilled during 2014. It offers excellent expansion potential as required.
Investors can read the company's May 2017 presentation here.
For more information investors can view an excellent John Kaiser video here, where he is forecasting a scandium boom.
Conclusion
As the car and airplane industries move to lightweight materials to gain additional fuel savings and increased range, the need for scandium/aluminum will grow exponentially. Up until now, there has been no reasonably priced source of scandium supply. However, with the advent of electric vehicles and the need for maximum range per kWh of battery per EV, and new lower cost scandium supply coming to market, demand for scandium could skyrocket.
Risks remain as to the viability of the scandium industry, as well as the usual risks around mining, so investors should take a cautious approach. As usual with greater risk also comes greater reward should scandium demand take off dramatically. Existing or near-term scandium producers can do exceptionally well. Only a small investment for now appears warranted based on the risk/reward balance.
My top three scandium plays right now are Scandium International Mining, CleanTeq, and Platina Resources. Australian Mines would be my fourth, but they do have over 2 billion shares on issue.
I would be happy to hear your views on the scandium market and any good scandium plays. As usual all comments are welcome.
Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in INTERNATIONAL SCANDIUM over the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: The information in this article is general in nature and should not be relied upon as personal financial advice.
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