Friedland-backed Clean TeQ Holdings debuts on TSX

Clean TeQ Holdings (TSX: CLQ; ASX: CLQ), which owns the Sunrise project in Australia, one of the highest-grade and largest nickel-cobalt deposits outside of Africa and one of the highest-grade scandium deposits in the world, has listed on the Toronto Stock Exchange since Dec. 15.

A definitive feasibility study on the fully permitted project, 350 km west of Sydney, is expected in the first quarter of 2018, and if a production decision is made by July, construction should start soon thereafter.

Sunrise will be the first mine dedicated to produce the raw materials needed to make nickel sulphate and cobalt sulphate, which are used in the cathodes of lithium ion batteries to power electric vehicles.

Given that 63% of the world’s cobalt is made in the Democratic Republic of the Congo, bringing a new conflict-free supply of the metal to market is appealing to many end users.

Perhaps just as important, currently 95% of global cobalt production is a by-product from copper and nickel mining, while at Sunrise, cobalt is a coproduct, not a by-product, and could make up 55% of Sunrise’s revenues at spot metal prices.

A drill rig at CleanTeq Holdings’ Syerston cobalt-nickel-scandium project in Australia’s New South Wales. Credit: CleanTeq Holdings.

Anticipation that electric vehicle production will surge over the next decade and warnings of limited cobalt metal supply from stable mining jurisdictions has made cobalt one of the best performing metals this year, with spot prices increasing from US$14.75 per lb. at the end of December 2016 to US$32.66 per lb. at press time — a 121% increase.

A prefeasibility study completed in 2016 estimated that Sunrise could process 2.5 million tonnes of mineralized material in its first 20 years, with material available for up to 19 more years of mine life.

Average C1 operating cash costs in years three to 20 were estimated at US$2.96 per lb. nickel, or US89¢ per lb. nickel after cobalt coproduct credits.

The lateritic, iron-hosted resource is shallow (from five metres to 40 metres) and extends over a 2 km horizon.

The average strip ratio is 0.8 times to 1 (waste to ore), meaning there would be more ore than waste.

The company has already signed a binding five-year offtake agreement with Beijing Easpring for 20% of future production. Mining magnate Robert Friedland owns 16.3% of the company and China’s Pengxin Mining owns 16%. Board and management own about 5.8%.

In addition to cobalt and nickel, Sunrise is one of the world’s largest and highest-grade scandium resources. Scandium oxide is used to make lighter and stronger aluminum alloys for the automotive and aerospace industries, and it could take a key role in the emerging field of 3-D printing.

Clean TeQ plans to extract scandium oxide as a by-product of cobalt sulphide and nickel sulphate.