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On-again-off-again market darling Sunrise Energy Metals (ASX:SRL) has soared to the second top gainer of the day – just behind Magellan, now merging with Barrenjoey – after it released a feasibility study outlining what it says is a realistic pathway towards having a producing scandium project.
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The somewhat obscure rare earth (though one which has been increasingly on the radar since it was deemed a critical mineral by multiple nations) has recently been the subject of Chinese export controls, outlining yet another much-needed metal which requires an ex-China supply chain.
And with that in mind – underscoring the strong market interest on Tuesday morning – the company says it can do just that (produce scandium) by mid-CY28. This would be a “fast track” plan in SRL’s own wordage.
To produce 60tpa of scandium by that point (or at least fire up working towards nameplate capacity), SRL perceives it would need no more than U$120M (A$170M) to get the project running with C1 cash operating costs of US$534/kg (A$752/kg).
SRL included on page nine of its DFS two of “the most recent publicly available reference points” for ex-China scandium oxide pricing. The first runs at up to US$6,250/kg based on “the U.S. Defence Logistics Agency’s bid for 6.4 tonnes of scandium oxide to be delivered over five years from Canada.”
The second reference point is lower at US$3,700/kg based on “project evaluation prices adopted by North American mining projects proposing to extract scandium, usually from hard rock sources.”
While the former figure is obviously more attractive from a project economics POV, at any rate, a cost-per-kg of US$534/kg remains relatively attractive – thus underscored in the market reaction to the news.
As for what scandium is needed for, Sunrise today pointed to “solid oxide fuel cells powering AI data centres” (described as a next-generation technology, for now, Big Tech are looking at nuclear power to that end) and aerospace alloys, as well as wireless semiconductors for 5G and 6G bands.
If that sounds pie-in-the-sky, reportedly, the US EXIM Bank doesn’t think so. It has provided a letter of interest stating it could fund the project up to US$67M.
“Syerston is one of the very few projects in the world capable of delivering scandium at the scale and unit cost needed to genuinely replace Chinese supply, and to do so in a way that gives Western industry the long-term supply security they are urgently seeking,” SRL CEO Sam Riggall said.
SRL last traded at $9.69/sh.
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