Aluminum-scandium master alloys, changing the way the world flies.
Scandium has until now only been a niche metal with demand in high end products such as the aerospace industry and sports equipment (bicycle frames, fishing rods, golf iron shafts, tennis rackets and baseball bats). It has great potential as an alloy because it has almost as low a density as aluminum with a much higher melting point. Scandium, when added to aluminum, creates a strong lightweight alloy with excellent resistance to corrosion and good weldability. Aluminum-scandium alloy can be 10-100% stronger than conventional aluminum alloys and has been used in Russian MIG fighter planes. A new analysis shows that scandium-contained aluminum alloys can save airline operators approximately $9 million in net present value for a single B737 -sized jetliner, assuming scandium oxide pricing at $3,500/kg.
NioCorp Developments Ltd. (TSX: NB | OTCQX: NIOBF) is developing North America’s only niobium, scandium, titanium project. Located near Elk Creek, Nebraska, the Elk Creek Project is the highest grade niobium project in North America, as well as the largest prospective producer of scandium in the world. NioCorp is sitting on 250,000 tons of niobium pentoxide, 2,300 tons of scandium, and 891,000 tons of titanium dioxide, and is heading towards being the only producer of its kind in the USA.
In a joint project with IBC Advanced Alloys, NioCorp announced in October the successful production of an aluminum-scandium master alloy. NioCorp and IBC intend to utilize the master alloy from this program to further the companies’ ongoing efforts to develop specialty scandium containing alloys and/or prototype products for potential commercial use. This agreement is to investigate and develop applications for scandium-containing materials for a range of downstream markets.
Mark A. Smith, CEO and Executive Chair of NioCorp and Chairman of the Board of IBC, said: “This is almost certainly the first aluminum-scandium master alloy made in the United States in some years. We look forward to the possibilities presented by the establishment of a domestic U.S. production capacity for aluminum-scandium master alloys that utilize scandium mined and purified in the U.S.”
NioCorp is developing the Elk Creek Critical Minerals Mine and processing facility in southeast Nebraska, which is expected to produce more than 100 tonnes per year of scandium oxide when fully operational. As shown below the project has an impressive after-tax NPV8% of $1.7 billion, with after-tax IRR of 21.7%.
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Elk Creek Feasibility Study highlights
NioCorp has also signed a commercial sales agreement with Traxys North America LLC. Under the agreement, Traxys is obligated to purchase 12 tonnes per year of scandium trioxide for the first 10 years of the project’s production. Traxys can purchase more than 12 tonnes per year and can extend the 10-year term by mutual agreement. This annual amount represents approximately 10% of NioCorp’s planned annual production of scandium. According to estimates by the U.S. Geological Survey, 12 tonnes per year is approximately equivalent to all current global sales of scandium for 2018. Traxys will focus its scandium sales and marketing efforts to customers in the aerospace and sporting goods sectors, and it retains the exclusive right to sell NioCorp scandium to those sectors.
CEO Mark Smith continued: “We are very pleased with the size, term, and potential value of this contract. We look forward to working with the leadership at Traxys to build and grow markets for a variety of scandium materials.”
In May 2018, the Interior Department (US) moved to included niobium, scandium, and titanium on its list of critical minerals. NioCorp is very well placed to be a US leader in the above mentioned critical minerals.
All three of NioCorp’s products have targeted applications in clean energy, aerospace/commercial aviation, defense, automotive, with independent estimates of the latent demand for scandium being placed at several hundred tonnes per year in the aerospace sector alone. The Traxys contract now means scandium sales are largely taken care of. Added to this NioCorp has 75% of their primary product (ferroniobium) already under contract over the first 10 years of production.
Given the above off-take and sales contracts NioCorp is looking attractive for finding a project funding partner, especially given they already secured an in-principle eligibility from the German Government loan guarantee program.
Matthew Bohlsen holds a Graduate Diploma in Applied Finance and Investment (similar to CFA), and a Graduate Diploma in Financial Planning. He has 30 years ... <Read more about Matthew Bohlsen>