SCY.TO - Let's see.


Scandium International Mining Corp. (SCY.TO) is focused on developing its Nyngan Scandium Project, located in New South Wales (NSW), Australia. To that effect, the Company has completed a Definitive Feasibility Study on its 100% owned Nyngan Scandium Project, located in NSW, Australia, and has received all key approvals, including a development consent and a mining lease, necessary to proceed with project construction.


SCY is currently seeking long term sales agreements with potential customers for scandium products, prior to finance and construction. The Company retains a portfolio of minerals processing patents relevant to base metals and specialty metals recoveries. While the primary patent focus is fundamentally on scandium recoveries, the associated technology and knowhow has direct application for critical metals recoveries. In addition, the Company has done extensive market development, application engineering and metallurgy work with many of the world's leading companies to accelerate the adoption of scandium into manufactured products, some of which also utilize other critical metals as well.


Prior coverage issued: May 2017, September 2017, February 2018, August 2018, and February 2018. and September 2019.

New Releases


Oct. 11 - Announces Resignation of Board Director.


Jan. 24 - Receives Royalty Pay-Out - Completed a NSR royalty buy-back arrangement with Osisko Mining Inc. on interests related to the Windfall Lake gold property in Quebec, Canada.The net amount retained was $0.5M.


Feb. 24 - Completes Program to Demonstrate AL-SC Master Alloy Manufacture Capability. A three year, three stage program to demonstrate the capability to manufacture aluminum-scandium master alloy (Al-Sc2%), from scandium oxide, using a patent pending melt process involving aluminothermic reactions.


This master alloy capability allow SCY to offer scandium product from the Nyngan Scandium Project in a usable form for aluminium alloy manufacturers globally; major manufacturers or smaller wrought or casting alloy consumers.


The next stage will be to consider a large-scale demonstration plant for conversion of oxide to master alloy.


Feb. 27 - Announces Joint Program With ECK Industries To Demonstrate Impacts Of Cerium And Scandium Additions In Aluminum Alloys. Program Agreement with Eck Industries to pursue novel alloy development of a combined cerium-scandium aluminum alloy, based on previous work done independently by the companies in this area.


The companies intend to pursue alloy refinements in both wrought and cast alloy applications, specifically targeting property improvements related to strength, corrosion resistance, and heat-working tolerance with A5000 series alloys.


Details of the program are specified as such: "a) Joint economic and technical support to alloy design, b) Joint sharing of previous data, and new data produced from this program, c) Samples production for customer trials, either as cast products, or wrought sample shapes for various potential customers and alloy manufacturers, d) Initial high value application expected to be in marine applications, and e) Program work is protected by existing patent applications filed by Eck". This current program represents a maturation of the thinking around how well cerium and scandium can be combined to both improve strength and properties beyond thresholds that effectively limit aluminum alloy use today.


Apr. 21 - Receives Favorable Government Notice on Nyngan Mining Lease Landowner Objection. The Notice addresses recent developments regarding resolution of a landowner objection filed in August 2016 against the grant of a mining lease relating to the Nyngan Scandium Project. The newly proposed decision, if finalized, would allow all of the measured and indicated resource included in the Nyngan Scandium Project DFS to be reinstated in a mining lease grant.


This Notice references new governmental findings regarding the ultimate determination of this outstanding landowner objection, and indicates that the Deputy Secretary now believes the objection has failed to meet key legal tests on major portions of the affected area, which are specifically defined.


The Notice also makes clear the advice is to be understood as a proposed decision, rather than a final decision. The affected parties have 21 days to file further information or arguments, at which time the Deputy Secretary will consider those submissions and render a final decision, as soon as practicable, on the outstanding 2016 objection.


May 13 - Seeks Copper Industry Partner To Demonstrate Scandium, Cobalt, And Other Critical Metals Recovery Technology. SCY to pursue copper industry interest in SCY ion exchange (IX) technology and know how to recover scandium, cobalt and other critical metals from solvent extraction (SX) raffinate and other acidic waste streams in certain acid leach copper operations. Recovery metals targeted by this application include cobalt, copper, nickel, scandium, and zinc, and possibly other metals and rare earth elements, depending on recovery economics.


IX technology offers rapid deployment to existing Cu operation waste streams, on the basis of this dynamic critical metals opportunity, and the fact that SCY has a significant capability to apply advanced mineral recovery technologies to the separation of critical metals from both ores and waste streams, the Company began a search for a North American scandium production source.


The potential new revenue stream of the combined metals residual varies by orebody, and also by the specifics of the mineral processing systems in place, but collectively the metals basket is more instantly marketable and shows superior economics to the solo scandium target we had in mind at the start.


This IX technology also represents a viable precursor for direct refining cobalt, nickel and potentially copper into high purity sulfate product forms, as required for battery manufacture, specifically in the electric vehicle (EV) industry.


The Company believes this work can be demonstrated with a working and successful copper plant installation, with proven know-how, and intends to pursue a copper industry partner to demonstrate the economic viability of this technology. It is the Company's intent to fully participate in the operation, ownership and production economics associated with a plant asset that is developed in concert with that partner.


June 9 - Announces Voting Results of Annual General Meeting.



Summary


LOI Partners Development.

Out of the nine LOI known to the market (ie. Weston Aluminium, AML Tech, Ohm & Haner Metallwerk, Grainger and Worrall LTD, Impression Technologies, PAB Conventry LTD, Austal LTD, Bronze-Alu Group) one was reported on.

In February 2020, one year after the last announcement, SCY disclosed a joint program with Eck Industries. The news is an evolution on earlier finding of combining cerium and scandium for aluminium alloy development.


Details shared about the Join Program makes it clear that the aim is to "specifically targeting property improvements related to strength, corrosion resistance, and heat-working tolerance with A5000 series alloys". Specifically for sample production for customer trials in "high value" marine applications.


The release concerning Eck Industries came exactly three days after SCY reveal the completion of a "A three year, three stage program to demonstrate the capability to manufacture aluminum-scandium master alloy" which SCY reports that the consideration of a large scale demonstration plant as the next step.


Patents

As per MD&A (April 27, 2020), "In October 2019 the Company was granted Patent No. 10450634, titled “Scandium-Containing Master Alloys And Method For Making The Same”.


In February 24, 2020 release, SCY discussed that it has a "patent pending melt process involving aluminothermic reactions". This is assumed to be part of the ten or so US Patent Application announced in February 2019.

Most of the current patents of SCY's current Chief Technology Officer can be found here.


Financing

There were no financing activity recorded in this period. However, SCY did receive income in the form of a royalty pay out from Osisko Mining for about $0.5M. As per MD&A (April 27, 2020): "The Company’s cash position increased during the three-month period by $195,061 to $310,629 (December 31, 2019 - $115,568) due to the sale of a royalty interest."


As a reminder, the last financing (March 2019) was at $0.18 cents for $1.06M with Rothschild Asset Management.


Nygam Scandium Project

Nine months after being granted a New Mine Lease for Nygam (ML , 1782), In April 2020, SCY disclosed that it received an encouraging notice regarding an outstanding landowner objection for Nygam. The notice indicates that the governmental authorities believes the landowners objection have failed to meet key legal tests on major portions of the affected area. While this is potentially good news for the company, it does not constitute a final decision on the issue.


At stake is a landowner objection which impact a significant portion of SCY's Nygam claims. Note that the current Licence (ML, 1782) is for 364.2 hectares vs. the original claims of 874 hectares. Because SCY has been unable to secure an off-take since the obtaining the new license, the scheduled date for the beginning construction for the mine continue to be pushed back to "earliest 2021" with a production date of 2022 as per latest (March 2020) investor presentation.

In short

SCY traded between $0.055 and $0.14 cents in the last period. The royalty pay out from Osiko Mining and the announcement with Eck Industries represents strong accomplishments.


The disclosed intent to use A5000 series alloy for marine application with Eck Industries is encouraging. Note that SCY signed a LOI with Austal Ltd also for Marine applications but no update has been provided to date on this front.


To date, the extent of the Eck Industries engagement is two years old. The initial LOI was announced on May 2018, preliminary results were delivered in February 2019, and formalized a Joint Program disclosed in February 2020.

There has not been any timeline provided for the completion of the Joint program.


Recently (May 13, 2020), a new proposed "ion exchange (IX) technology" was announced by the company toward the objective of providing services to the Copper industry. The technology would assist in critical metal recovery "from solvent extraction (SX) raffinate and other acidic waste streams in certain acid leach copper operations."


While the vertical is attractive, SCY has not provided the market with any white paper or prototype of the process and technology. In addition, SCY is entering a new line of business which it has no client experience as an organization.

SCY has roughly ten pending patents.


SCY recent re-valuation has been helped by news from Rio Tinto which is aligns with SCY's May 13th announcement. However, for valuation to sustain and augment, it will need to build on this.


SCY still represents an interesting opportunity but history has shown that the evolution of LOI to an off-take can be lengthy and the mine construction date is at best tentative. The new critical metal recovery venture is timely but SCY will need to deliver tangible technical and financial results for the current interest to grow meaningfully. Let's see.


DISCLAIMER: The work included in this article is based on current events, technical charts, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The content of rally is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions - rally cannot take responsibility for your investment decisions.

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