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Australian Mines’ study indicates additional cobalt-nickel potential at Sconi Project

Progressing the cobalt-nickel-scandium project in Queensland toward major development milestones in 2018.

nickel on the elementary table
Shares closed about 4% higher on Friday, at 10 cents.

Australian Mines Limited’s (ASX:AUZ) (FRA:MJH) review of previous sterilisation drilling across the proposed processing infrastructure sites at Sconi has indicated the presence of high-grade cobalt and nickel.

Sterilisation drilling is undertaken during the pre-development phase of mining and mineral resource programs to ensure there is no mineralisation beneath the sites earmarked for buildings, roads and the like.

Australian Mines is continuing to advance the bankable feasibility study (BFS) of its flagship Sconi Cobalt-Nickel-Scandium Project in northern Queensland toward major development milestones in 2018.

The company has already secured an off-take agreement for the full planned production from Sconi.

The binding agreement with Korean-headquartered industrial conglomerate SK Innovation is for the sale of up to 12,000 tonnes of cobalt sulphate per year and up to 60,000 tonnes of nickel sulphate per year.

Re-evaluating the location of the processing plant

As part of its BFS, Australian Mines has now identified that previous sterilisation drilling intersected similar cobalt-nickel grades to those included in the project’s current mineral resource.

This indicates that the overall footprint of cobalt and nickel mineralisation at Sconi may be significantly larger than previously indicated by both the pre-feasibility study (PFS) and the existing mineral resource.

As a result, the company is presently re-evaluating the location and layout of the full-scale cobalt-nickel-scandium processing plant, and associated non-processing infrastructure.

This is to ensure the final site design enables maximum operational efficiency (and, thus, the lowest possible operating costs for the project) in tandem with optimising the Sconi Project’s life-of mine.

Objective is to maximise and sustain future production

Australian Mines managing director Benjamin Bell said: “Given this operation has the potential to run for several decades once commissioned it is imperative that we invest time at this critical planning stage to ensure the site is set-up to maximise and sustain future production.

“The results from sterilisation drilling at Sconi, along with the anticipated results from the upcoming resource expansion drill program will provide significant data for us to revisit the existing mineral resource estimate and assess potential future conversion of those resources to ore reserves.”

READ: Australian Mines identifies large scale cobalt-in-soil anomalies at Thackaringa

The company is also progressing the Thackaringa Project in New South Wales where it recently identified three zones of elevated levels of cobalt from surface geochemical sampling over Target Area A.

Interestingly, the cobalt content of these three anomalous zones is similar to that observed at surface over Cobalt Blue’s (ASX:COB) Pyrite Hill and Big Hill cobalt deposits.

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