Australian Mines Share Price Down: Investors Weigh BFS

At time of writing, the share price of Australian Mines Limited [ASX:AUZ] is down 16.39%, trading at $.051.

Australian Mines is a resource company that is focused on the production and supply of battery and technology metals.

It is developing three different cobalt/cobalt-nickel-scandium projects at Sconi, Flemington and Thackaringa.

The new Bankable Feasibility Study (BFS) comes in relation to its Sconi mine, its flagship project.

Learn about the role cobalt will play in the battery boom by downloading our free report.

Highlights of the BFS

As part of the BFS, one highlight was cash flow projections which can be seen below:

AUZ Share Price

Source: Australian Mines Limited

Also of particular interest was a chart mapping out total projected revenue and EBITDA of the project, with a breakdown of the ratio of revenue and earnings derived from the three different resources present at the Sconi project:

AUZ Share Price

Source: Australian Mines Limited

As you can see, nickel makes up the majority of revenue, throughout the duration of the mine’s life.

This could be concerning for some as nickel has been trading downwards for much of the last six months:

Price of Nickel

Source: infomine.com

Capital costs being assessed

Cobalt, on the other hand, looks somewhat more promising with concerns lingering over what could happen with the political situation in the Democratic Republic of Congo — a more in depth look at cobalt demand is available here.

As things stand, investors are digesting the latest report, assessing in particular the next phase of development for the Sconi project — finalising project financing.

The capital cost breakdown indicates the company is looking for US$974 million

With an off-take agreement with SK Innovations in hand, the company will now make the case for financing, hoping that the government will chip in as well.

The company is hoping the Northern Australia Infrastructure Facility (NAIF) provides funding in the Greenvale region of Northern Queensland.

So while the share price is down today, the point remains that Sconi could be a significant source of nickel and cobalt as soon as 2020.

Investors will be looking for updates on financing arrangements with what looks like a tough call to make at the moment.

Regards,

Lachlann Tierney,
For Markets & Money

PS: If you’re thinking of making a cobalt play, our free report on the battery boom is a must read. You can download it here.


Lachlann Tierney is a writer for Markets & Money. He has lived and studied in the US, the UK, and Australia. With an MSc from London School of Economics (LSE) he brings a strong grasp of geopolitics and world affairs to his analysis. Lachlann is always on the lookout for the news that will give you an edge in tomorrow’s markets.


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