Friedland-backed Sunrise soars on US loan interest

Sunrise Energy Metals (ASX: SRL), which wants to mine Australia scandium in a project backed by billionaire Robert Friedland, is being lined up for a potential loan from the Export-Import Bank of the United States. The shares jumped. 

The bank said in a letter of interest it might provide debt financing of up to $67 million, about half the cost to develop the Syerston project hosting one of the world’s largest and highest-grade deposits of scandium. The mineral is vital for semiconductors that power mobile communications, aerospace and automotive applications. The U.S. accounts for about 90% of overall demand, but rival China controls most of the supply, making the mineral easily exposed to supply chain disruptions.

“This letter of interest underscores the importance of scandium to the United States, both as a critical component in wireless communications technologies, and advanced alloys supporting the civilian and defence sectors,” Friedland said in a news release. “As a key ally of the United States, Australia’s significant endowment of strategic metals positions it to be an important supplier in the future.”  

Shares in Sunrise Energy Metals rocketed 30% to close at A$4.35 apiece on Tuesday in Sydney after touching an all-time high of A$4.65. The company is now valued at nearly A$513 million. The stock has traded as low as 21¢ in the past 52 weeks. 

Feasibility

Should the company proceed with a formal loan application, the bank will conduct due diligence to determine if a final lending commitment would be made based on its criteria and the project’s eligibility. The bank’s interest may encourage offtake agreements as the company completes a feasibility study due by the end of October, Sunrise Managing Director Sam Riggall said in the same release. 

Located in New South Wales, about 450 km west of Sydney, Syerston has nearly 46 million measured and indicated tonnes grading 414 parts per million scandium, according to a resource update this month. The new figures doubled the contained metal in the project’s high-grade zones to 19,000 tonnes compared with a previous estimate from February. 

“The world’s largest and highest-grade primary scandium deposit is now estimated to be even bigger than previously thought following our most recent drilling,” Riggall said. “Global supply remains tight since China’s export controls were imposed in April.”

Sunrise also holds a nickel-cobalt project in New South Wales. The project, called Sunrise, hosts the largest cobalt deposit outside of world-leading supplier The Democratic Republic of Congo, with contained cobalt of 170,000 tonnes, according to the company.