Financing Challenges Cloud Outlook for Australian Mines’ Strategic Sconi Nickel-Cobalt Asset

Global Context and Strategic Positioning

Australian Mines Limited’s latest quarterly report underscores the company’s strategic alignment with the evolving global critical minerals landscape. Heightened geopolitical tensions, including China’s export restrictions on rare earth elements like scandium and the U.S. government’s national security investigation into critical mineral imports, have intensified the urgency for diversified and secure supply chains. Australia’s A$1.2 billion Critical Minerals Strategic Reserve initiative further signals government backing for domestic projects, positioning Australian Mines to capitalize on these shifts.

CEO Andrew Nesbitt emphasises the company’s commitment to advancing projects that meet the rising demand for ethically sourced and sustainable critical minerals, vital for defence, energy, and technology sectors worldwide.

Flemington Project: Expanding the Scoping Study

The Flemington Project remains a cornerstone asset, boasting one of the world’s highest-grade scandium resources. With a JORC-compliant resource of 6.3 million tonnes at 446 ppm scandium, potentially expandable to 28 million tonnes at a lower cut-off, the project is well placed amid constrained global scandium supply dominated by China.

In response to recent export restrictions and tariff pressures, Australian Mines is broadening its scoping study to incorporate updated metallurgical, processing, and environmental assessments. This expanded program aims to enhance project confidence and is slated for completion by the end of Q3 2025, potentially unlocking further value and investment appeal.

Jequie Project: Promising Rare Earth Element Exploration

Exploration at the Jequie Rare Earths Project in Bahia, Brazil, has yielded encouraging results from a 72-hole auger drilling campaign. Notably, 69% of samples at Jequie South returned total rare earth oxide (TREO) assays above 400 ppm, with standout intercepts such as 15 meters at 1720 ppm TREO.

Geological interpretation suggests that major regional fault structures have facilitated rare earth enrichment through weathering and groundwater transport, forming thick saprolite-clay regolith profiles. The observed cerium depletion indicates ionic clay adsorption processes, a hallmark of economically significant rare earth deposits.

Jequie North also showed anomalous mineralization, albeit with differing enrichment mechanisms, likely linked to physical concentration of monazite minerals. Australian Mines plans further geological mapping, geochemical sampling, and metallurgical test work to refine exploration targets.

Resende Project: Targeting Battery Minerals and Rare Earths

At the Resende Project in Minas Gerais, Brazil, systematic soil grid sampling has delineated two key follow-up areas for rare earth elements, both open to expansion. Concurrently, the company is preparing for an initial diamond drilling program targeting near-surface greisen zones associated with tin, tantalum, and lithium mineralization, drawing parallels to the nearby AMG Mibra Mine.

Auger drilling is also planned over the prospective rare earth areas to complement ongoing exploration efforts, aiming to build a comprehensive understanding of the project’s battery mineral potential.

Sconi Project: Strategic Asset Facing Financing Challenges

The Sconi Battery Minerals Project remains a strategically important nickel and cobalt asset with several competitive advantages, including its Australian location, granted mining licences, and well-understood technical risks due to its brownfields status. However, the current commodity price environment complicates securing financing for a final investment decision (FID).

Despite these challenges, renewed interest from European investors offers a potential pathway forward. The company continues to engage with stakeholders to advance the project, which promises ethical production of critical battery minerals within a low-risk jurisdiction.

Financial Position and Outlook

Australian Mines closed the quarter with a cash balance of approximately A$2.05 million. The company’s expenditure was focused on exploration and development activities across its portfolio, with detailed project-level spending disclosed. No new equity or debt financing was raised during the quarter, and payments to related parties were limited to standard director fees and reimbursements.

Looking ahead, the market will watch closely for the outcomes of the expanded Flemington scoping study, metallurgical test results from the scandium-magnesium metal hydride technology, and further exploration progress at Jequie and Resende. These developments will be critical in validating Australian Mines’ potential to become a key supplier in the global critical minerals supply chain.