Scandium International Mining Corp. (SCY.TO) is focused on developing its Nyngan Scandium Project, located in New South Wales (NSW), Australia, Coverage was initiated in May 2017, with additional notes in September 2017, February 2018, and August 2018.
Here's an update on recent activities:
Aug. 15 - LOI with Impression Technologies Ltd (ITL) To test scandium-containing alloys in proprietary aluminum sheet forming applications. ITL develops and licenses advanced aluminum forming technology to automotive, aerospace, rail and electronics industries, globally.
Aug. 16 - LOI with PAB Coventry Ltd. To test scandium-containing alloys in aluminum sheet forming applications. PAB manufactures and prototypes offering specialty metal parts and design capabilities to the automotive, aerospace, defense and HVAC industries.
Nov. 20 - Signs Letter of Intent with Austal Ltd. To test scandium-containing aluminum alloys in marine applications. Austal is an Australian-based global shipbuilding company that specializes in the design, construction and support of both defense and commercial vessels.
Nov. 27 - Results from Eck Industries Trials of Scandium in Alloys David Weiss (VP Engineering/R&D for Eck) presented at the Materials Science and Technology ("MST") conference in Columbus, Ohio (October 18 -24th, 2018) on the results of preliminary tests with scandium.
Conclusion from MST Conference Presentation - "The Al/Ce/Mg/Sc system is a promising alloy path for very high-performance applications.
Jan. 2 - Scandium International Receives Notice of Mine Lease Review. SCY.V received the final signed ML grant in October 2017. This review is in response to an objection by a landowner who holds freehold surface ownership over a portion of the total 874 hectare mine lease area. SCY.TO was advised that the objection was investigated prior to the award of the Mining Lease grant (late 2017).
The NSW Department of Planning and Environment has recently sought and received independent input that the landowner objection should qualify as “Agricultural Land”, as defined in the relevant law. The Company has rights of comment, rebuttal and appeal on that finding, which it fully intends to make to the Department. With receipt and consideration of appeal documents, from the parties, and further Department input, the Department Secretary will make a new determination on the validity of the affected portion of the ML
In the last six months, SCY.TO added three more Letters of Intent (LOI) in addition to reporting results with with Elk Industries' LOI. While the "promising" results were welcomed by the market, the release was issued one month after the actual presentation!
The subsequent news about the "Notice of Mine Lease Review" definitely had an impact on valuation. SCY.TO did make the case for why it believes that outcome of this review will not "delay or prevent" the Nygam Project even if the NSW Department sides with the landowner. However, SCY.TO has not returned above $0.20 cents ever since. Of concern, the uncertainty about potential economic impact on the Nygam project.
Indeed, questions remain. How did SCY.TO responded to the NSW Department? Did it comment, rebut or appeal? How long will the NSW Department need to make a decision? Should the ruling be not favourable for SCY.TO, is it binding? What are the subsequent options (if any)?
One thing is clear at this point in the process, SCY.TO does not seem to have access to the "Landowner". The dealings are with the NSW Department which already has sought and received independent input which seemingly favouring the "Landowner" claim.
The optics and timing of the last two releases are not becoming. At issue is whether SCY.TO is fully transparent or timing communications with the market? The plans for the construction of the mine have already have been delayed (2019). The current Investor Presentation (p.4) now refers to 2020.
RE: "Goal is completion of offtake agreements as top priority for team in 2018." One Offtake was communicated in 2018. However, there is no doubt that SCY.TO did move forward on at least seven letter of intent (LOI) with various industry partners.
Again the date of these releases suggests a pattern. Out of the six releases, three clusters of two releases with seven, three, and two days apart.
Setting that aside, the company has engaged with a wide range of industry partners to test applications of its product. SCY.TO also has disclosed that there are more partners as some have requested to remain anonymous. Knowing this, how many more LOI are in scope? When will SCY.TO be satisfied with their off-take portfolio to start to raise funds towards building the Nygam Project? SCY.TO may be wise to specify these with the market.
SCY.TO continue to make progress on delivering new partnerships. Many are aware of the scale of this opportunity and that valuation can change overnight with a significant off-take. Nonetheless, the timing of communications, and scheduling of Nygam is of concern while SCY.TO is under review.
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