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

Location
The project is located in New South Wales, in Australia.

Client
Clean TeQ.

Project Description
A definitive feasibility study (DFS) has confirmed the project’s status as a globally significant cobalt, nickel and scandium resource that, once developed, will become a significant supplier of critical raw materials to the lithium-ion battery market.

The project has total mineral reserves of 147.4-million tonnes grading 0.56% nickel, 0.09% cobalt and 53 parts per million scandium.

The DFS is based on a 2.5-million-tonne-a-year ore throughput rate and an initial mine life of 25 years, with enough ore reserves to extend production for more than 40 years.

The mine will deliver 450 871 t of nickel, 84 007 t of cobalt, 250 t of scandium oxide and 2 337 t of scandium hydroxide.

The project will also have the capacity to produce up to about 93.5 t/y of scandium oxide, stockpiled as scandium hydroxide intermediate product, over the first 25 years. A dedicated scandium refinery, with an 80 t/y high-purity scandium oxide refining capacity, is included in the DFS capital cost estimate.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has an after-tax net present value, at an 8% discount rate, of $1.39-billion and an internal rate of return of 19.1%, with a payback of 4.3 years.

Value
Preproduction capital is estimated at $1.33-billion.

Duration
A final investment decision is expected in early 2019, with construction expected to start shortly thereafter.

Latest Developments
Clean TeQ has warned of a A$180-million noncash writedown of the carrying value of its Sunrise nickel/cobalt/scandium project for the 2020 financial year.

A review of the carrying value was undertaken based on a conservative best estimate of what the probable project execution-plan outcomes would be, as well as highly conservative macroeconomic assumptions, including the forecast metal process.

Clean TeQ has been progressing the project execution plan, which will include an update to the 2018 definitive feasibility study for the project, as well as a revised master schedule. As the plan has progressed, several trends have emerged, including upward pressure on the capital cost estimate of the project.

The expected higher capital cost has also impacted negatively on the carrying value of the asset.

Further, Clean TeQ has also been unable to secure a development partner and commit to a final investment decision by mid-2020 as planned, with the company telling shareholders that the Covid-19 pandemic has presented difficult conditions for financial markets and challenges for funding new projects.

The negative impact of the expected longer development timeframes for the project have also been taken into account in assessing the carrying value of the project.

However, given the strong outlook for nickel and cobalt demand, the company remains committed to developing the Sunrise project once funding has been secured

Key Contracts and Suppliers
Not stated.

Contact Details for Project Information
Clean TeQ, tel +61 3 9797 6700 or fax +61 3 9706 8344.