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On Wednesday, investors were reminded that there’s another scandium game in town. This week, Platina Resources released the results of an independent scoping study for its Owendale scandium project, outlining annual production of 30 tonnes of 99.9 percent purity scandium oxide with a mine life of nearly 70 years.
Image courtesy of Wikimedia Commons.
The scandium space has been abuzz lately with news from Scandium International Mining (TSX:SCY) and Clean TeQ Holdings (ASX:CLQ), but on Wednesday, investors were reminded that there’s another scandium game in town.
This week, Platina Resources (ASX:PGM) released the results of an independent scoping study for its Owendale scandium project, outlining annual production of 30 tonnes of 99.9 percent purity scandium oxide with a mine life of nearly 70 years. Located in New South Wales, Australia, the company has stated that the project has the potential to become the country’s sole platinum mine as well as a significant scandium resource.
“The scoping study results show what we have always understood; that Owendale can be Australia’s first scandium mine with further optional platinum credits and nickel and cobalt,” said Platina’s managing director and CEO, Robert Mosig. “We will commence our environmental, PFS and final BFS studies as soon as possible, subject to securing the requisite financing.”
The study considers an open-pit operation that will produce roughly 50,000 tonnes of ore per year, with mining anticipated to take place two to three times per annum in small campaigns. Capital costs for the project are anticipated at AU$73.5 million, while all-in operating costs are expected to be AU$598 per kilogram of scandium oxide. Currently, Owendale has indicated and inferred mineral resources of 24 million tonnes grading 384 ppm scandium (9,100 tonnes of contained scandium metal or 14,000 tonnes of scandium oxide).
Commenting on Wednesday’s release from Platina, John Kaiser of Kaiser Research was positive on the size of the deposit and its future for the scandium market. “The Owendale deposit is a significant scandium deposit, ranking up there with Clean TeQ’s nearby Syerston deposit and Scandium International’s Nyngan, all in New South Wales. These three deposits hold the key to long-term global scandium supply,” he said.
However, he has reservations, mostly related to problems he sees with the Australian JORC system compared to Canada’s NI 43-101.
“The Platina scoping study news release does not include any detail to support the bare-bones numbers they have published,” he stated. “With a 50-percent error margin, this scoping study announcement is not worth the paper it is written on. It is a reason why the Canadian 43-101 reporting system is vastly superior to the Australian JORC system, which lacks accountability in the form of the technical reports written by qualified professionals that Canadian listings must file.”
Kaiser added, “I’m not saying that Owendale cannot be successfully developed, just that Platina will have to do much more metallurgical work to be in a position to quantify what it will take to produce scandium.”
To be sure, while there are several junior players in the scandium place, the world has yet to see reliable commercial supply of the metal. However, analysts such as Kaiser have pointed out that, should reliable supply emerge, the tiny 10-tonne-per-year market for the metal could get a whole lot bigger.
On that note, Platina reiterated that it has signed heads of agreements with two companies in China for the supply of 20 tonnes of scandium oxide. Offtake negotiations must be completed by March 31 for both companies, Inner Mongolia Honfine Zirconium Industry and Hunan Oriental Scandium. Certainly, investors will be watching to see whether the company secures the financing it needs to move forward to with prefeasibility and bankable feasibility studies.
At close of day Wednesday, shares of Platina were up just over 2 percent, at $0.087, with roughly 105,000 shares trading hands, a little over three times the company’s average trading volume. Overall, shares of Platina have gained 45 percent so far in 2015.
Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.
Related reading:
John Kaiser: ‘There’s an Enormous Latent Demand for Scandium’