Scandium International Mining Corp (SCY)

[TMLonggun]

Old:
PEA HIGHLIGHTS:

Capital cost estimate for the Project is US$77.4 million,
Operating cost estimate for the Project is US$636/kg scandium oxide,
Oxide product volume is 35,975 kg per year,
Project Constant Dollar NPV10% is US$175 million, (NPV8% is US$217 million),
Project Constant Dollar IRR is 40.6%,
Oxide product grades of 97-99% are estimated, and
Scandium recovery estimate is 84.3%.

To the more up to date DFS:

FEASIBILITY STUDY HIGHLIGHTS:

Capital cost estimate for the Project is US$87.1 million,
Operating cost estimate for the Project is US$557/kg scandium oxide,
Oxide product volume averages 37,690 kg per year, over 20 years,
Project Constant Dollar NPV10% is US$177 million, (NPV8% is US$225 million),
Project Constant Dollar IRR is 33.1%,
Oxide product grades of 98-99.9%, as based on customer requirements,
Project resource increases by 40% to 16.9 million tonnes, grading 235ppm Sc, at a 100ppm cut-off in the measured and indicated categories, and
Project Reserve totalling 1.43 million tonnes, grading 409ppm Sc was established on part of the resource.

Looks like a very impressive project. Should be easily financed, conservative 3 year pay back on the low side of production. Super high grade reserves, about $600 million in easy pickings. 400 ppm = $800 per tonne. Scandium bonanza?

http://www.scandiummining.com/s/newsreleases.asp?ReportID=745646

George Putnam, CEO of Scandium International Mining Corp. commented:

"The Company is pleased with this very solid feasibility study result, and with the quality of the development work it represents. We now have a project plan we can execute on, and a considerably more mature development schedule on which to seek additional scandium customers. We also now have what we believe to be a financeable platform with which to engage in construction funding discussions. This accomplishment brings us a significant step closer to building the Nyngan Project and producing scandium for what we know to be numerous waiting markets."

William Harris, Chairman of EMC Metals, commented:

"Delivery of this feasibility study represents an important strategic milestone for the Company in that SCY has the first primary scandium project to complete metallurgical, engineering, and economic investigations and bring a viable feasibility study to the marketplaceSCY has the first primary scandium project to complete metallurgical, engineering, and economic investigations and bring a viable feasibility study to the marketplace, and do so in full view of both scandium investors and future customers."

"Pricing Assumptions

The price assumption in the feasibility study is US$2,000 per kilogram (kg) of scandium oxide product, as an average price covering all product sold, over various product grades. Current market pricing, such as that can be established, is substantially above these levels based on small unit quantities and varying grades. This product pricing benchmark applied in the feasibility study remains the same as was applied in the 2014 Preliminary Economic Assessment ("PEA") on this Project, and for the same reasons. In order to encourage a viable, over-subscribed and vigorous scandium market, across numerous applications, product suppliers will need to provide for adequate supply of quality product, available from trusted jurisdictions, at prices lower than product trades for today.

In addition to limited publically available price quotes for scandium oxide, the feasibility study notes two other reference points on the US$2,000/kg price assumption. The Company has an offtake agreement in place, for 7,500 kg/year (3 years), with pricing being supportive of the pricing assumption in the feasibility study. The customer is a knowledgeable alloy group, with longstanding interest in aluminum-scandium alloys. The feasibility study price assumption is also supported by a recent, independent marketing report that examines the 10 year scandium supply/demand outlook, and includes scenario-based 10 year price forecasts. The details and contents of this market outlook report will remain confidential, but select information will be included in the feasibility study. Both of these reference points support that the scandium value proposition for customers/consumers is valid at this price level."

"CONCLUSIONS AND RECOMMENDATIONS

The production assumptions in the feasibility study are backed by solid independent flow sheet test work on the planned process for scandium recovery. The report consolidates a significant amount of metallurgical test work and prior study on the Project, including important test work results completed since the PEA was generated in 2014. The entire body of work demonstrates a viable, conventional process flow sheet utilizing a continuous-system HPAL leaching process, and good metallurgical recoveries of scandium from the resource. The metallurgical assumptions are supported by various bench and pilot scale independent test work programs that are consistent with known outcomes in other laterite resources. The continuous autoclave configuration, as opposed to batch systems explored in previous flow sheets, is also a more conventional and current design choice.

The level of accuracy established in the feasibility study substantially reduces the uncertainty levels inherent in earlier studies, specifically the PEA. The greater confidence intervals around this Technical Report are achieved by reliance on significant project engineering work, a capital and operating cost estimate supported by detailed requirements and vendor pricing, plus one offtake agreement and an independent marketing assessment, both supportive of the marketing assumptions on the business.

The feasibility study delivers a positive result on the Nyngan Scandium Project, and recommends the Project owners seek finance and proceed to construction. Recommendations are made for additional immediate work, notably to win additional offtake agreements with customers, complete some optimizing flow sheet studies, and to initiate as early as possible detailed engineering required on certain long-lead capital items."