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DNI adds scandium to Alberta project’s product basket

Buckton's near-service black shales.

Buckton's near-service black shales.

Photo by DNI Metals

9th April 2014

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

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TORONTO (miningweekly.com) – Project development junior DNI Metals on Wednesday said that an initial evaluation of recovering scandium as a co-product of the polymetallic mining operations planned for its Buckton deposit, in Alberta, had concluded that by incorporating a scandium separation circuit into the flowsheets, it could produce more than 200 000 kg/y of the metal used in aluminium alloys.

TSX-V- and Frankfurt-listed DNI said that by adding scandium oxide recovery to the Buckton operation, it could contribute considerable additional revenues to the Buckton economic model, which was established in a December preliminary economic assessment (PEA) for the deposit.

Scandium is one of the 17 rare-earth elements (REE) and is typically used in solid oxide fuel cells and to alloy aluminium to strengthen it for applications in aircraft, automotive and frames requiring structural strength and a light weight.

DNI expected demand for the metal to expand rapidly, offering an expanding demand for scandium despite it being generally accepted that scandium consumption is constrained by unreliable and scarce supply.

Current global supply is estimated to range between 10 000 kg/y to 20 000 kg/y, with capacity for growth toward an unfulfilled demand estimated to be upward of 100 000 kg/y. There are no primary sources for scandium and current supplies stem from by-product from other mining operations, which are augmented by dwindling historic stockpiles.

Consulting engineering firm Hatch had investigated the feasibility of recovering co-product scandium from the leaching solution once it had been extracted from the Buckton shales. Hatch had formulated conceptual process engineering design criteria and a flow sheet, and prepared estimates for related capital and operating costs. Hatch had also previously formulated the project’s processing flow sheets.

Hatch's work had concluded that a solvent extraction scandium circuit could conceptually be incorporated into the Buckton metals recovery flow sheets at a capital cost of $117-million, including a $39-million contingency.

The scandium oxide output would be of 99%+ purity at an operating cost of $500/kg. The study also concluded that after allowing for assumed entrainment and processing circuit losses, an estimated 74% of the scandium oxide leached from the Buckton shales might ultimately be recovered as a final product.

The Buckton nickel/uranium/zinc/copper/cobalt and REEs, including yttrium, project entails openpit mining of 4.5-billion tonnes of black shales over a 64-year mine life, at a rate of 72-million tonnes a year.

The metals would be extracted through a process of bioheap leaching, using bacteria to remove the metals. The process is also used by Finland’s Talvivaara Mining.

The PEA had indicated that the project held a net present pre-tax value of $1.6-billion at a 6% discount rate, with an 8.7% internal rate of return on a full-equity financed basis.

The Buckton mining operations would cost about $3.76-billion in preproduction capital to construct, with a 10.5-year payback.

Located some 900 km north of Calgary, the PEA also provided for a hydrometallurgical facility to recover the various metal products from the leach solution, and a separation plant to further refine the mixed REE oxide recovered into individual saleable final products.

Scandium is incidentally leached during the leaching process, and could be added to the final saleable products.

The Buckton resource study had estimated that the 4.7-billion-tonne resource contained some 18.7-million kilograms of recoverable scandium oxide from an average grade of 16.5 parts per million, at a 24% leaching recovery.

DNI said that the Buckton resource study was based on an average trailing two-year average to May 2013 for scandium oxide of $4 195/kg, noting that prices for the metal were quoted at $7 000/kg as recently as last month.

“DNI's recent evaluation demonstrates that the Buckton deposit represents a significant future source of scandium, and that even if only a portion of the projected annual production is saleable it can have a significant impact on the economics of the deposit.

“Scandium was provisionally omitted from the Buckton PEA considering that its markets are not sufficiently transparent to definitively capture its potential value in the cash flow models of the Buckton PEA. A more rigorous analysis of the economic impact of recovering co-product scandium from the Buckton deposit will be incorporated into a future update of the Buckton PEA,” the company said.

Edited by Creamer Media Reporter

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