Australian Mines (ASX: AUZ) is advancing the review of a historic scoping study for the high-grade Flemington scandium project in New South Wales.

The 2017 study will be subject to capital, operating and revenue estimate updates, which indicated a net present value of up to A$255 million and a 37.3% internal rate of return using a scandium oxide price of US$1.5m per tonne.

The figures were based on the processing of 100,000tpa to produce an annual 50t of scandium oxide from an 18-year operation, with the potential to extend the life of the mine up to 45 years.

Drill hole data

Australian Mines will review data from approximately 500 extensional drill holes completed between 2019 and 2020 that produced a number of intercepts not incorporated into the original resource estimate of 2.7Mt grading 403 grams per tonne of scandium, including 12 metres at 402 parts per million scandium from 9m and 20m at 425ppm from 8m.

The incorporation of the historic drilling data is expected to significantly increase the original resource estimate, which also included near-surface intercepts of 16m at 556ppm scandium, 21m at 577ppm and 17m at 547ppm.

The resource remains open in multiple directions and covers only 1% of the prospective geology.

APO submission

Australian Mines is progressing an assessable prospecting operation (APO) submission (including an environmental review) with the NSW mining regulator to allow for additional infill and lateral extensional drilling at Flemington.

Flemington is one of the world’s highest-grade scandium deposits and sits in close proximity to the Burra project owned by Rio Tinto (ASX: RIO) and Fifield and Avondale critical minerals partnerships between Rimfire Pacific Mining (ASX: RIM) and Golden Plains Resources.

The proposed scoping study review was prompted by significant interest in the hydrogen economy and advancements in Australian Mines’ solid-state hydrogen storage technology.

Essential role

Scandium plays an essential role in highly-efficient solid oxide fuel cell technology, used in power generation to reduce carbon footprints.

It is lightweight, strong and highly resistant to corrosion and is used in the manufacture of vehicles, aeroplanes, spacecraft and rocket cones to reduce weight, improve fuel efficiency and reduce emissions for increased sustainability.

The critical mineral is also used in electronics to improve the performance of semiconductors and advanced communications technologies such as 5G.

Currently, 80% of global scandium production is generated in China.

According to US Geological Survey estimates, scandium supply and demand increased from 25t in 2021 to 40t in 2023 and it is expected to have a compound annual growth rate of 14.7% through to 2030.