Australian Mines (ASX: AUZ) has provisionally agreed a 19.9% sale (669 million shares at 0.12) to Korean petrochemical specialists SK Innovation as they begin to divest their portfolio from hydrocarbons. The deal includes a 7 year off-take arrangement for Co & Ni from its sole-owned Sconi cobalt, nickel and scandium project in Queensland.
Subject to shareholder approval and the completion of a feasibility study (due to be completed in April), SK Innovation will partner in the construction and development of Australian Mines’ advanced beneficiation and processing facility at the site 250km from Townsville, with nearby electricity, port and road facilities. The company’s maiden resource has a potential 20 year mine life and contains some 89 million tonnes with 0.11% Co and 0.80% Ni.
Benjamin Bell (Managing director for Australian Mines) said “This is a landmark occasion for the company and shareholders… …As the only Australian cobalt, nickel, scandium company to have secured an off-take for 100% of its expected cobalt and nickel output, the company has, once again, demonstrated the Sconi project in northern Queensland is the most advanced project of its type in Australia, and that Australian Mines is unequivocally a leader in Australia’s cobalt sector”.
The company are now looking to add value to the mine for its shareholders, with similar take-off agreements for its by-product scandium oxide.
Voluntary suspension of trading ends at open of the ASX tomorrow (20th February 2018).
Industry updates from Liam Hardy