Australian Mines said that through its subsidiary Flemington Mining Operations, it has exercised its option to acquire 100% of the Flemington Cobalt-Nickel-Scandium Project, located in central New South Wales from Jervois Mining.
According to Australian Mines, the Flemington project is among the more advanced cobalt-nickel-scandium projects in Australia. The project has an existing maiden mineral resource of 2.5 million tonnes at 0.103% cobalt and 403ppm scandium in the Measured category; and 0.2 million tonnes at 0.076% cobalt and 408ppm scandium in the Indicated category.
The company believes that there is considerable potential to expand the current mineral resource materially, considering that only 1% of the prospective geology at the cobalt-nickel-scandium project has been tested comprehensively to date.
A completed scoping study indicates the project to have the potential to produce an after-tax cash flow of A$677m ($495.11m) for first 18 years of production based on the existing mineral resource.
Currently, a mining lease is pending with the New South Wales Department of Planning.
Australian Mines expects to begin drilling at the Flemington project right away after completing an ongoing 50,000m resource expansion drilling program at its 100%-owned Sconi Cobalt-Nickel-Scandium Project in Queensland.
The company said that it will come up with an updated mineral resource estimate on the Flemington Project after the results from the proposed drilling are received and modeled. It also expects to quickly launch a pre-feasibility study (PFS) on the cobalt-nickel-scandium project.
Australian Mines managing director Benjamin Bell said: “Our early modelling of the cobalt grade, host geology and potential mineral resource tonnage at Flemington has demonstrated significant exploration potential.
“We look forward to getting a drill rig back out on the ground at the Project to further evaluate the scale of the opportunity we have with Flemington and potentially develop it into a valuable second production source of cobalt, nickel and scandium for Australian Mines, following our flagship Sconi Project in Queensland where we are nearing completion of a Bankable Feasibility Study.”
In May, Cobalt 27 Capital signed a deal to acquire a 1.5% gross revenue royalty on the Flemington project from Jervois Mining.