The White House Executive Order on critical materials heightens scandium interest
The September 30, 2020 White House Executive Order (‘EO’) on critical minerals is just what was needed to give a huge boost to the mining sector. Not sure why ‘scandium’ and the ‘rare earth group’ was listed separately in the EO, since scandium is considered a rare earth, but the end result is that this has escalated market interest in this critical material.
One of the 35 critical minerals is ‘scandium’, used mostly for the purpose of lightweighting, scandium-modified aluminum alloys have equivalent yield and tensile strength to steel and titanium alloy but are 1/3 the weight of steel and 40% lighter than titanium.
Declaring this “a national emergency“, the EO states that the US intends to support companies that have “projects that support domestic supply chains” and “the establishment of secure critical minerals supply chains”, which could reasonably be expected to include Canadian projects such as Imperial Mining Group Ltd. (TSXV: IPG).
Peter Cashin, President, CEO and Director of Imperial Mining Group, which own their flagship scandium-rare earth Crater Lake Property in northeastern Quebec, commented to InvestorIntel when asked on their thoughts on the EO with the following:
“President Trump’s Executive Order should force an orderly build-up of the necessary steps required to secure a domestic supply chain for rare earth materials. In addition to the European Unions expressed push to lessen Chinese import dependence, our hope is that the order will apply to development of the significant critical mineral resources that exist in Canada.”
What is driving this market demand? Available scandium oxide supply today is estimated at just 25 to 35 metric tonnes per year, insufficient for widespread adoption of scandium-aluminum (“Sc-Al”) alloys for automotive, aerospace and defense sectors where they can be used for high-strength applications and in sectors in which lightweighting is essential. In addition to Sc-Al alloys, scandium is used in the Solid Oxide Fuel Cell (“SOFC”) industry because of its heat stabilization and electrical conductivity characteristics. In essence, the competitive advantage of scandium is as a hardener in aluminum alloys, which is what renders them corrosion-and thermal-resistant.
If your not familiar with the Imperial Mining Group Ltd. (TSXV: IPG), Imperial’s Crater Lake Property has a large diameter complex which is host to high-grade scandium and niobium deposits. Scandium oxide grades to date have been very good ranging from 0.0235% to 0.0319% (235-319g/t). Other drill results have included 528g/t scandium oxide over 8.8 meters, showing the high grade potential of the Crater Lake Project.
The company expects the Crater Lake Project to be a small open-pit operation with an on-site magnetic concentrator and/or sensor-based sorting. It is anticipated that the project will be low CapEx, OpEx due to the higher grades and expected simple process recovery methods.
Imperial Mining is currently working to expand the resource and have recently discovered several new areas of scandium mineralization. These new showings lie within the same 14-km arcuate magnetic trend hosting the three previously defined mineralized zones (Boulder, TGZ and STG) on the property. Assay results are expected very soon.
Crater Lake’s 14-km arcuate magnetic trend hosting the three previously defined mineralized zones (Boulder, TGZ and STG)
Peter Cashin states: “The new discoveries are extremely positive news for Imperial in view of the rapidly growing demand and limited supply for this important new technology metal……Currently, scandium is only produced as a minor by-product in China and Russia and, with supplies limited, it is our belief that Crater Lake represents an important alternative, primary scandium supply source to serve western consuming markets.”
A new US Executive Order to boost critical mineral mining, strong management, a high grade growing scandium-rare earths asset in a good mining jurisdiction, and a growing need for scandium and rare earths elements all combine to support Imperial Mining Group. Due to the early stage the current market cap is only C$9m.
Matthew Bohlsen is a Senior Editor for InvestorIntel.com. With a Graduate Diploma in Applied Finance and Investment, and a Graduate Diploma in Financial Planning. He ... <Read more about Matthew Bohlsen>