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Australian Mines Limited (ASX:AUZ) has initiated an expedited Pre-Feasibility Study (PFS) for its Flemington Scandium Project in New South Wales, now expanding the evaluation to consider increasing annual scandium oxide output from 60 tonnes to as much as 180 tonnes. This follows a compelling Scoping Study completed in April 2026 that revealed strong project economics, including a post-tax net present value (NPV8) near US$860 million under market-aligned pricing scenarios. The PFS is expected to take 6–9 months and will run concurrently with a new drilling campaign aimed at testing resource extensions and supplying additional material for metallurgical testing.
Key Highlights
- Australian Mines Limited (ASX:AUZ) has fast-tracked the Pre-Feasibility Study for the Flemington Scandium Project in NSW
- PFS scope expanded to assess scaling annual scandium oxide production from 60 tpa to up to 180 tpa in response to rising market demand
- Scoping Study demonstrated a post-tax NPV8 of approximately US$860 million and IRR of 74% at US$3,000/kg Sc₂O₃ pricing, with initial capital costs estimated at US$125 million for 60 tpa production
- Concurrent drilling program will evaluate resource extensions and provide material for metallurgical testing
- PFS completion anticipated within 6–9 months, including environmental baseline studies, hydrogeological investigations, and permitting activities
Flemington Scandium Project: Strategic Location in NSW’s Scandium Hub
Australian Mines Limited operates the Flemington Scandium Project, a high-grade primary scandium resource strategically situated within a recognized scandium hub in New South Wales, Australia. Adjacent to Sunrise Energy Metals' (ASX:SRL) Syerston Scandium Project, Flemington benefits from its position in an established scandium production region. It boasts one of the highest-grade primary scandium Mineral Resources globally, offering a competitive edge in production economics and operational efficiency.
The project’s mineral resource totals 6.3 million tonnes at 446 ppm scandium (Sc), based on the January 2025 update. This includes 3.12 million tonnes Measured, 3.02 million tonnes Indicated, and 0.15 million tonnes Inferred resources. The initial 60 tpa production target is based on processing 2.09 million tonnes of ore, comprising approximately 55.8% Measured, 43.6% Indicated, and 0.6% Inferred resources. Located in NSW, the project benefits from established mining infrastructure and regulatory frameworks relevant to scandium development.
Scoping Study Financials and Pricing Scenarios
The May 2026 Scoping Study showcased robust economics across multiple pricing scenarios. At a market-aligned price of US$3,000/kg scandium oxide (Sc₂O₃), the project achieved a post-tax NPV8 of about US$860 million and an IRR of 74%, reflecting optimistic market conditions and upside potential. The study confirms strong financial leverage to higher scandium prices, maintaining economic attractiveness across a range of price points.
At a conservative mine design price of US$1,500/kg Sc₂O₃, the project still delivered solid economics with a post-tax NPV8 of approximately US$270 million and an IRR of 32%. Initial capital expenditure for the 60 tpa operation is estimated at US$125 million, with cash operating costs around US$561/kg Sc₂O₃. The financial model assumes a 28-year mine life and an average feed grade of 573 ppm Sc over the first 15 years, underscoring the project’s viability under various market conditions and supporting advancement to the pre-feasibility stage.
Expanded Pre-Feasibility Study to Assess Production Scale-Up to 180 Tonnes Per Year
The PFS scope has been broadened beyond the original study to evaluate the technical and economic feasibility of tripling annual scandium oxide production from 60 tpa to 180 tpa. This threefold increase aligns with market signals indicating potential supply shortages and rising demand for scandium. The scale-up assessment will analyze the viability and economics of this production increase to meet anticipated market needs. Australian Mines Managing Director Andrew Nesbitt highlighted that recent growth prospects in the scandium market, particularly linked to Bloom Energy’s expanding solid oxide fuel cell (SOFC) deployments, emphasize the strategic importance of developing scalable Western scandium sources.
The PFS, expected to take 6–9 months, will include expanded metallurgical testing, environmental baseline studies to establish current conditions and potential impacts, hydrogeological assessments to evaluate water resources and management, permitting processes to advance approvals, and enhanced market engagement to validate demand assumptions. This expanded scope demonstrates the company’s commitment to maximizing Flemington’s value by thoroughly exploring the feasibility of increased production.
Concurrent Drilling Program to Support Resource Expansion and Metallurgical Testing
Alongside the PFS, Australian Mines will conduct a drilling program at Flemington to provide additional material for metallurgical testing and to explore potential resource extensions. This drilling is a critical exploration component that will supply core samples and geological data to refine processing parameters for the proposed 180 tpa scale-up.
Given the current 6.3 million tonne resource at 446 ppm Sc ranks among the highest-grade primary scandium deposits worldwide, further drilling could extend mine life beyond the modeled 28 years or offer flexibility in mining and processing strategies. Integrating drilling results with metallurgical testing ensures technical and resource knowledge advances concurrently, enhancing study efficiency and minimizing risks of late-stage processing issues.
Market Dynamics Driving Increased Production and Scandium Demand
The decision to expand the PFS scope reflects strong market drivers in the scandium sector. Australian Mines noted that growth in Bloom Energy’s SOFC technology deployment is increasing demand for scandium, which enhances fuel cell performance and durability. As SOFC commercialisation expands globally, scandium demand is projected to rise, creating opportunities for new primary scandium supply from established Western producers.
The scale-up from 60 to 180 tpa addresses anticipated supply deficits and growing market demand. Australian Mines’ analysis indicates current and near-term global scandium supply is insufficient to meet emerging needs from fuel cells and other industrial applications. By evaluating the larger production scenario, Flemington is positioned to capture a share of this demand while supply remains constrained. The fast-tracked PFS demonstrates strategic responsiveness to evolving market dynamics and potential customer interest in securing reliable long-term scandium supply.
Mineral Resource Grade and Characteristics Supporting Strong Economics
The Flemington resource is characterized by a high grade of 446 ppm scandium with a 300 ppm cut-off. The total resource comprises 3.12 million tonnes Measured, 3.02 million tonnes Indicated, and 0.15 million tonnes Inferred categories. The initial 60 tpa production target involves processing 2.09 million tonnes, with an average feed grade of 573 ppm Sc over the first 15 years.
This high-grade profile underpins the project’s strong economics by reducing required ore volumes, lowering capital intensity, and improving cash operating costs per kilogram of scandium oxide produced. Flemington’s status as one of the world’s highest-grade primary scandium resources offers a significant competitive advantage, supporting confidence in advancing to the pre-feasibility stage based on a robust resource base and a projected 28-year mine life.
Technical and Permitting Workstreams Progressing Project Development
The PFS will incorporate multiple technical studies essential for project advancement. Environmental baseline studies will document current conditions, including water resources, vegetation, fauna habitats, and cultural heritage sites, forming the basis for impact assessments and management plans. Hydrogeological investigations will assess groundwater availability and aquifer properties critical for water management in processing and environmental mitigation.
Permitting activities are a key development milestone, involving engagement with New South Wales regulatory authorities to secure project approvals, environmental licenses, water extraction permits, and mining leases. The PFS will support permitting by delivering required technical data and impact assessments. Additionally, ongoing market and customer engagement will validate demand assumptions for the scaled-up production and potentially establish early commercial relationships, reducing risks ahead of development decisions.
Project Timeline and Upcoming Milestones
The PFS for Flemington is expected to complete within 6–9 months from its July 2026 start, targeting early to mid-2027. Results will determine the economic viability of the 180 tpa scale-up and provide the technical and financial foundation for subsequent development decisions, including potential progression to feasibility studies or permitting.
The concurrent drilling program will continue alongside PFS activities, with findings integrated into metallurgical testing and resource evaluations. These results may influence decisions on resource extensions, mine life, and production optimization. Combining drilling data with metallurgical and engineering work ensures detailed site-specific inputs for plant and mine design. Investors should watch for updates on PFS completion, drilling outcomes, and any revisions to resource estimates or project economics during the study period.
Scale-Up Scenario and Pre-Feasibility Study Disclosures
The company clarifies that the 180 tpa production scenario under evaluation in the PFS is exploratory and not a formal production target or financial forecast at this stage. The 60 tpa scenario from the Scoping Study remains the basis for previously reported financial metrics, including the US$860 million NPV8 and 74% IRR at US$3,000/kg pricing.
Financial results for the 180 tpa scenario will be disclosed upon PFS completion, following detailed engineering, capital cost estimation, and operating cost modelling. Scale-up may introduce different engineering requirements, capital intensity, and operating costs per unit, which could materially affect financial outcomes. The PFS will provide clarity on these factors and inform development decisions regarding the optimal production rate for Flemington.
