PERTH (miningweekly.com) – A bankable feasibility study (BFS) on the Sconi cobalt/nickel/scandium project, in Queensland, has estimated a capital cost of $974-million, ASX-listed Australian Mines told shareholders.
The capital cost estimates included an estimated $730-million for the processing plant, $31-million for the mine construction, $103-million for non-process capital costs and $110-million for contingencies.
The two-million-tonne-a-year project is expected to produce some 8 496 t/y of cobalt sulphate and 53 301 t/y of nickel sulphate over a mine life of 18 years, generating annual earnings before interest, taxes, depreciation and amortisation of $295-million and annual revenues of $512-million.
The BFS estimated a post tax internal rate of return of 15%, and a net present value of $697-million.
“The Sconi BFS demonstrates robust project and financial metrics, with capital cost in-line with Australian Mines’ prediction for the processing plant, while production volumes and specifications are within the range sought by our offtake agreement with SK Innovation,” said Australian Mines MD Benjamin Bell.
“The project also benefits from strong annual revenues across the life-of-mine and a relatively short payback period.”
Australian Mines in December of last year completed the acquisition of the Sconi project, after buying out joint venture partner Metallica Minerals.
“Our acquisition timing proved spot-on and now, two years later, we believe the project is well on track to move to the next stage in project funding negotiations,” said Bell.
“Demand for procuring potential future production from the Sconi project has been high from multiple battery manufacturers and intermediate companies, but as shareholders will be aware, we took the decision back in February to sign a binding offtake agreement with SK Innovation for 100% of the cobalt and nickel to be produced over an initial seven-year agreement period to supply their global electric vehicle battery manufacturing plants.”
Bell said that although not essential to the feasibility of the Sconi project under the parameters of the BFS, Australian Mines continued to pursue research partnerships and marketing opportunities for the scandium oxide that will be produced as a by-product of the plant.
“We believe that the scandium market will continue to grow due to its potential applications for alloys used in the automotive and aerospace industries, where it can deliver lighter components without compromising on strength.”