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.

This is as a result of 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
The Queensland government has offered Australian Mines a conditional financial support package for the development of its Sconi cobalt/nickel/scandium project.

The support package will be funded from the government’s A$175-million Jobs and Regional Growth Fund and will be subject to several conditions. Assistance from the Jobs and Regional Growth Fund will contribute toward two stages of the project’s development, from preliminary works through to, and including, the establishment of the mine and processing infrastructure works.

The funding will be dependent on Australian Mines securing an offtake agreement by the end of September for all of the nickel and cobalt sulphate to be produced at Sconi.

The funding will also be subject to the delivery of a detailed execution plan, obtaining sufficient approved financing for the construction of the project and making a final investment decision before the end of 2020, and appointing an engineering, procurement and construction management contractor by the end of the year.

The funding will also be subject to Australian Mines employing at least 191 people in Queensland on a full-time basis by June 2024, maintaining that number for the duration of the agreement, and engaging at least 57 full-time independent contractors working directly on the Sconi project.

Minister for Regional Development and Manufacturing Glenn Butcher said minerals from the Sconi mine could go to powering the next generation of electric vehicles or be used in Australia’s high-value aerospace sector.

“This project has the potential to support the regional economy and hundreds of jobs. That’s why the government is proud to support the project as part of Queensland’s plan for economic recovery.”

Australian Mines MD Benjamin Bell has said that the company is making good progress to secure the offtake and financing agreements needed to access the funding.

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.