Name of the Project
Sconi cobalt/nickel/scandium project.

Location
North Queensland, Australia.

Project Owner/s
Australian Mines.

Project Description
The Sconi project’s economics and mine plan have been updated.

Sconi, which includes the Greenvale, Lucknow and Kokomo mineral deposits, now has total estimated mineral resources of 75.71-million tonnes at 0.60% nickel and 0.08% cobalt, owing to a 63% increase in the tonnage of the Greenvale mineral resource and a 94% increase in the Lucknow resource.

Kokomo has total mineral resources of 28.47-million tonnes grading 0.57% nickel and 0.09% cobalt. The project has proven and probable reserves of 57.3-million tonnes grading 0.58% nickel and 0.08% cobalt.

In light of the updated ore reserve, new pit designs have been developed for the Greenvale and Lucknow ore.

The optimised Greenvale pit design now captures 97.4% of the ore, with only a slight 2.5% increase in waste. The Greenvale mining area comprises two large main pits (Pit 1 and 2) with multiple internal stages and eight smaller pits, with a stockpile from historical mining operations designated as Pit 10.

In total, the pits contain 17.8-million tonnes of ore at 0.76% nickel and 0.06% cobalt, with 28.9-million tonnes of waste for a very favourable overall strip ratio of 1.6:1. The optimised Lucknow design captures 99% of the ore, with only a 6% increase in additional waste.

The Lucknow mining area comprises a large main pit with 13 internal stages, and a single, smaller pit to the south (Stage 12).

In total, the pits contain 20.8-million tonnes of ore at 0.42% nickel and 0.08% cobalt, with 20.8-million tonnes of waste and an overall strip ratio of only 0.5:1.

The Kokomo pit design remains unchanged, capturing 90% of the ore, with about 20% waste, while the Kokomo mining area comprises a large centrally located main pit with ten internal stages, and eight smaller satellite pits.

The project is now expected to produce 1.41-million tonnes of nickel sulphate (an increase of 46%), 209 000 t of cobalt (an increase of 37%) and 1 441 t of scandium over the project life.

Potential Job Creation
About 500 staff will be employed during construction and, once the project is in production, 300 staff.

Net Present Value/Internal Rate of Return
The updated economics of the mine show the pretax net present value has increased by 12% to $1.47-billion at a 5% discount rate, while the internal rate of return has been revised down slightly to 20%.

Capital Expenditure
The project is estimated at $974-million, including a $110-million contingency.

Planned Start/End Date
The project is expected to be completed by the end of July 2023.

Latest Developments
Australian Mines has signed a binding long-term offtake agreement with battery producer LG Energy Solutions for mixed nickel/cobalt hydroxide product from the Sconi project.

LG Energy Solutions will buy 71 000 t of nickel and 7 000 t of cobalt in the form of a mixed hydroxide precipitate over an initial six-year term, with the potential to extend the offtake agreement for another five years, by mutual agreement.

The offtake agreement is a major milestone for the company, and the quantities covered in the offtake agreement will account for all the projected production from Sconi, creating a sound customer foundation to underpin the development of the project.

The offtake agreement is subject to only one condition precedent – that Australian Mines secure financing for the construction of the Sconi project before the end of June next year.

Key Contracts and Suppliers
Ausenco, Orelogy and Simulus Laboratories.

Contact Details for Project Information
Australian Mines, tel +61 7 3184 9184 or email info@australianmines.com.au.