JOHANNESBURG (miningweekly.com) – Project developer Platina on Monday announced the results of the prefeasibility study (PFS) for its Owendale project, in New South Wales, which identified “robust” scandium/cobalt/nickel project economics.
Completed by Brisbane-based Prudentia Process Consulting, the PFS estimates a capital cost of $94-million to deliver a mine producing 42 000 t/y of scandium oxide.
Average cash operating costs are estimated to be $23-million and unit costs are estimated at $532/kg oxide.
At a scandium oxide price of $1 500/kg, Owendale will deliver $58-million a year in revenue. The pretax net present value is estimated at $180-million and the internal rate of return is 27%. The project has a three- to four-year payback period.
“The PFS has demonstrated that financial returns on the project make it a positive development opportunity with a relatively short payback and strong underlying profitability. The PFS has demonstrated the high grade and long mine life from just one specific area of the Owendale project,” commented MD Rob Mosig.
He stated that Platina would investigate ways to vary the amount of scandium oxide production to smaller amounts in the earlier years of mining and increasing production as the market developed.
Mosig added that the PFS provided the company with the credibility to “seriously” continue negotiations on potential offtake and cooperation opportunities.
Platina has pointed out that it would have to raise capital to construct the Owendale project. However, owing to the small size of the current global scandium market, it was unlikely that a bankable project financing option would be available.
"Therefore, the project development will be contingent on finance derived from scandium oxide offtake agreements, cooperation partners involved in scandium alloy production businesses, shareholders and third-party investors helping to offset the marketing risk against the otherwise robust project economics."