Australian Mines Announces Preliminary Findings Indicate Additional Mineralisation

Australian Mines Limited (ASX: AUZ) advises that a review of the sterilisation drilling1 completed across the proposed processing infrastructure sites at Sconi, as part of the Company’s Bankable Feasibility Study (BFS), has indicated that high grade cobalt and nickel mineralisation2 extends across the sites proposed for the processing plant and haul roads.

The sterilisation drilling, undertaken by Metallica Minerals Limited in the lead-up to the project’s Pre-Feasibility Study3 (PFS), identified a preferred site for the processing plant at Sconi. This location appears primarily designed to optimise scandium production from the ore body and did not comprehensively sterilise the cobalt and nickel prospectivity of the proposed mining and processing area.

Since acquiring a 100%-interest in the Sconi Project from Metallica Minerals in 2017, and having signed a binding off-take agreement with SK Innovation1 , Australian Mines has been focused on optimising the Sconi BFS for cobalt and nickel production to maximise economic returns from the Project.

This finding by Australian Mines’ Studies Team that the previous sterilisation drilling intersected similar grades to those included in the project’s current Mineral Resource5 indicates that the overall footprint of cobalt and nickel mineralisation at the Company’s 100%- owned Sconi Project may be significantly larger than previously indicated by both the PreFeasibility Study6 (PFS) for Sconi and the project’s existing Mineral Resource Statement.

As a result, Australian Mines, in collaboration with lead engineering firm Ausenco7 , are presently re-evaluating the location and layout of the full-scale cobalt-nickel-scandium processing plant, and associated non-processing infrastructure to ensure the final site design enables maximum operational efficiency (and, thus, the lowest possible operating costs for the project) in tandem with optimising the Sconi Project’s Life-of-Mine.

The current optimisation process for the Sconi BFS, which is appropriate in light of the additional cobalt and nickel mineralisation within sites earmarked for the processing plant and supporting infrastructure8 , will necessarily result in a slight adjustment to the proposed BFS timetable. The Company now expects to receive the draft version of the report by the end of July 2018, with the final Board-approved version subsequently released to the market in September 2018

This adjusted timing of the BFS is not expected to have any effect on the construction date for the project given that both SK and the financial institutions engaged in negotiations with Australian Mines are imbedded in the Company’s current BFS process.


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