AUZ completes Sconi purchase to become full owner
Published on: | by finfeed
On Friday Australian Mines Limited (ASX:AUZ) announced the completion of its transaction to acquire 100 per cent of the Sconi cobalt-nickel-scandium project in northern QLD from its previous joint venture partner Metallica Minerals (ASX:MLM).
The transaction includes the transfer of A$3.5 million in cash, as well as A$1.5 million worth of AUZ shares, to MLM on completion of its Bankable Feasibility Study — on track for delivery by April 2018. In addition, a final issue of A$5 million in AUZ shares or cash to MLM will occur once the Sconi Project is in full-scale commercial production.
The acquisition, which stipulates no residual royalties or claw-backs, will allow AUZ a greater degree of flexibility with its ongoing off-take and project financing discussions.
Australian Mines Managing Director Benjamin Bell commented: “Securing 100% ownership of the advanced Sconi Cobalt-Nickel-Scandium Project in northern Queensland is a major strategic milestone for Australian Mines, and progresses our plans to become a significant supplier of cobalt to the emerging electric vehicle sector within the next few years.
“Importantly for our shareholders, who continue to strongly support the Company’s positioning as a near-term producer of strategic technology metals, our acquisition of the Sconi Project has no residual royalty payments or value-depleting claw-back measures.
“Controlling 100% of the expected cobalt sulphate and nickel sulphate production from Sconi provides Australian Mines with far greater scope and flexibility during our current off-take discussions, which are now at an advanced stage, as well as project financing discussions as the Company can now ‘speak’ for the full annual production of these highly sought-after battery metals.
“Australian Mines’ focus for the remainder of 2017 and the first quarter of 2018 is on delivering the Bankable Feasibility Study on the Sconi Project, in line with its previously announced completion timing of April 2018. Recent work as part of the Bankable Feasibility Study has supported the view that the expected average feed grade at the Sconi Project to be 0.11% cobalt and 0.81% nickel for at least the first 20 years of the operation.”
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AUZ also reported considerable progress on finalising the total capital expenditure required to build the proposed open pit mine and full-scale processing facility at Sconi. The full forecast relating to costs will be available in April 2018, at which time AUZ will be able to advance project financing discussions further.
The company is nearing completion of its demonstration-size processing plant, with the autoclave expected to arrive within the month.
“The Company is also pleased to report that the demonstration-size processing plant is nearing completion with the critical autoclave components expected to arrive in Perth this month,” Bell said.
“Once commissioned, this plant will allow for the production of commercial cobalt sulphate and nickel sulphate samples to be delivered to committed partners in early 2018. The processing flow chart being proposed by Australian Mines has being thoroughly reviewed by engineers from the various potential off-take partners, with each engineer signing off on the process as being an approved and acceptable approach for delivering battery-grade cobalt sulphate and nickel sulphate products.”