Replies to post #132 on Scandium International Mining Corp (SCY)

[r2g2]

nice find... Canadian

here's the excerpt...

TMR: What are the other energy metal raw materials that we should be watching?

CB: I'm particularly interested in scandium. While lithium and cobalt are the 800-pound gorillas in the space, scandium is much smaller and is misunderstood, I think. Though estimates vary, scandium is widely believed to be a 10 to 15 tonne per year market—that equates to about $40M. Once the potential for scandium is discovered, things will get very interesting and the market size could be multiples higher.

TMR: Scandium is used in advanced aircraft and metal halide lamps. What is the shape of the resource market and who are the promising players?

CB: In addition to my previous comments, there is no primary scandium mining anywhere on the globe right now. It's produced as a byproduct in China and sourced from stockpiles in other parts of the world. Much has been written and published around the use of scandium in solid oxide fuel cells and also as an alloy with aluminum. A Google search for "Scandium patents" or something similar will validate this claim. So the issue isn't potential demand; it's security of supply. It's a real chicken-and-egg quandary. Financing scandium projects will remain a challenge until people are convinced of a growing end market, but those end markets can't grow until reliable supplies are on stream.

One of the companies I have focused on is Scandium International Mining Corp. (SCY:TSX), formerly EMC Metals Corp. The company recently signed a memorandum of understanding (MOU) and an offtake agreement for 7,500 kilograms per year of scandium starting in 2017 with a private Canadian company. If you assume a $2,000 per kilogram price for Scandia, which is what is assumed in Scandium International's preliminary economic assessment (PEA), it's not hard to see how it could become a powerful force in the global scandium market given its current size of approximately $40M.

TMR: Did the market recognize the importance of the MOU and the offtake agreement for Scandium International?

CB: No, I don't think so. I think a lot of people are still learning about the scandium market and its potential. That's one of the reasons why I'm so optimistic about it, because it's not well understood. Again, a closer look at the potential math here tells an intriguing story.

Additionally, the company is working on optimizing its flow sheet, which should improve what are already strong economics at the PEA level. It does have $2.5M of convertible debt on its balance sheet. That comes due at the end of 2015 and needs to be addressed. The company can wipe the $2.5M in convertibles away and strengthen the balance sheet by raising $3M in equity.