With 2015 being another dismal year for junior resource stocks, one wouldn’t expect any winners in the space during past 11 months. Not true. In fact, when SmallCapPower interviewed newsletter legend John Kaiser on March 27, he suggested Scandium International Mining Corp. (TSX: SCY) could have a good year, which it has.
Mr. Kaiser, at the time, believed that by the end of this year the Company will have a mining permit and a feasibility study in hand to develop a scandium deposit, which he claims ranks among the three richest deposits.
For those who’ve never heard of scandium, it’s a soft, silvery metallic element that’s the lightest of the transition metals. And while it’s fairly common in the earth’s crust, scandium rarely occurs in economic concentrations. According to SCY, there is currently no dedicated single mine source and it is estimated that only 15 tonnes of scandium are produced globally each year.
Aircraft manufacturers are thought to be interested in scandium alloyed aluminum materials, as it can reduce aircraft weights by 15%-20%. Scandium also exhibits exceptional electrical conductivity and heat stabilization qualities.
Scandium International Mining Corp. is developing its 80% owned Nyngan Scandium Project in Australia, which the Company claims is the first primary project of its kind. A Preliminary Economic Assessment (PEA) done in 2014 showed an estimated Capex of US$77 million and a 40% IRR. SCY expects to complete a Definitive Feasibility Study (DFS) during the first quarter of 2016 with production anticipated in 2017, subject to financing. The Company also has a signed offtake agreement for 7,500 kg per year for at least three years.
SCY received a vote of confidence last summer when its lender converted a US$2.5 million loan made to the Company into a 20% direct joint venture interest in its Nyngan and Honeybugle scandium projects, making Scandium International Mining Corp debt free. The Company also recently received US$2.07 million as a result of granting a 0.7% royalty on gross mineral sales from both the Nyngan and the Honeybugle properties.
