Update of Syerston Scandium Study to commence

Sunrise Energy Metals has announced that GR Engineering Services has been appointed to commence an update of the 2016 Feasibility Study for the Syerston Scandium Project at Fifield (around 53 kilometres from Condobolin).

The study will update the capital and operating cost estimates for the 2016 Syerston Scandium Project Feasibility Study, which highlighted the potential for annual production of 49.2 tonnes per annum of scandium oxide over a 20 year mine life.

In parallel, commercial pilot scale extrusion trials are expected to commence shortly in the United States, which will test the Company’s proprietary 6xxx-series aluminium-scandium alloys in a range of automotive components.

While Sunrise Energy Metals remains focused on the financing and development of the Sunrise Nickel-Cobalt Project, developments in the scandium market have necessitated a reassessment of a stand-alone, fully integrated scandium mining, processing and refining facility in Australia.

These market developments include the increasing adoption of scandium in specialty semiconductor applications, as well as an increased focus on scandium-containing alloys in the military and defence sectors.

“The potential for a small, high-grade, stand-alone scandium mine adjacent to the Sunrise Battery Material Complex provides a potential pathway to near-term operations and cashflow for the Company,” Sunrise CEO, Sam Riggall explained.

“With a considerable body of study work completed, we have a strong foundation to update the previous Syerston Project Feasibility Study, assess opportunities for funding support and rapidly move the project towards production.

“While the scandium market is still relatively small, we believe scandium will play an important role in semiconductor advances over the next decade, as the world transitions towards 5G and 6G communications infrastructure. In addition, the role that scandium-containing thin films may play in emerging flash memory chip applications, given its strong ferroelectric response and high remnant polarisation, is also highly encouraging.

“The real uplift in volume, however, will come from the development of a new generation of high-performance aluminium alloys for the aerospace and automotive sectors.”

Offtake discussions have recommenced with several counterparties across the speciality alloy, semiconductor and aerospace markets.

“The Company has received expressions of interest from a range of parties for scandium offtake. While the update of the Feasibility Study is underway, discussions with these parties will remain ongoing with a view to converting expressions of interest into firm offtake commitments,” a Sunrise Energy Metals Australian Stock Exchange (ASX) Announcement said.

“Like many rare earth markets, scandium supply is dominated by China. Regulations handed down only last week by China’s State Council have nationalised all of the country’s rare earth resources (including scandium), as well as banning the export of technology to extract and separate rare earths.

“This follows restrictions implemented last year on the export of germanium and gallium, used widely in the chip-making sector. It is worth noting that the American semiconductor industry’s dependence on China for scandium already exceeds its dependence on China for silicon, germanium and gallium.

“It is in this context that development of western sources of scandium supply – capable of competing with China on cost and quality – will become increasingly critical for a number of technology-driven industries.

“The recent designation by the United States of both Australia and the United Kingdom as ‘domestic sources’ of supply under the Defense Production Act is a welcome step in building a coordinated response to these strategic and emerging markets.

“In addition to the semiconductor market, the Company has continued to invest in scandium alloy development programs to service both the aerospace and automotive industries.

“We have been particularly encouraged by results of our product development work at Michigan Tech, which has demonstrated a range of unique 6xxx-series alloys that deliver yield strength improvements of circa 90 MPa (c. 33 per cent) over standard alloys.

“This opens up the possibility of using aluminium-scandium alloys in automotive applications where high-strength steels currently dominate.

“As a result of this development program, the Company is now engaged with partners in the United States to undertake commercial pilot scale extrusion trials to test these proprietary 6xxx-series alloys in a range of automotive components. This will be critical to establishing a long-term, viable market for scandium, as the volume requirements for alloys will far exceed all other markets.”

An approved Environmental Impact Statement (EIS) supports the Development Consent for the Project. Potential environmental impacts, impact assessments, mitigation measures and

environmental management, rehabilitation and monitoring strategies are documented in the EIS.

The Project was first granted Development Consent in May 2001, with several modifications to the Development Consent taking place in subsequent years.

The various modifications include approval to produce scandium oxide and a right to operate an initial smaller-scale scandium operation while preserving the approval for a larger nickel/cobalt operation, which may be considered in the future.

Sunrise Energy Metals completed construction of three approved water bores in June 2023, to the south of the project site. Monitoring wells were installed at three locations and pump testing was successfully completed under the terms of the Company’s water supply works approval.

Last Updated: 25/07/2024By

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