Australian Mines Faces Financing Hurdles Despite Scandium Resource Surge and Brazil Expansion

Significant Resource Upgrade at Flemington

Australian Mines Limited (ASX: AUZ) has announced a major uplift in its scandium mineral resources at the Flemington project in New South Wales. The updated 2025 JORC-compliant Mineral Resource Estimate (MRE) nearly doubles the high-grade scandium inventory from 3.7 million tonnes to 6.3 million tonnes, maintaining consistent scandium grades around 446 ppm. This revision reflects growing global demand for scandium, driven by its critical role in emerging technologies such as solid-state hydrogen storage and the broader hydrogen economy.

In addition, the resource model suggests substantial additional mineralisation at lower cut-offs, with a total mineralised inventory of 28 million tonnes at 217 ppm scandium when considering a 100 ppm cut-off. This expanded resource base enhances Flemington’s strategic value as a potential supplier of this rare metal, which is increasingly sought after for lightweight alloys and clean energy applications.

Brazilian Expansion: Jequie and Resende Projects

In a clear diversification move, Australian Mines has initiated its maiden drilling program at the Jequie Rare Earths and Niobium projects in Bahia, Brazil. The initial auger drilling targeted soil anomalies with Total Rare Earth Oxide (TREO) grades exceeding 500 ppm, including a notable assay of 3,107 ppm TREO at Jequie South. While assay results are pending, the company has already rationalised its tenement portfolio, retaining 17 high-priority tenements and releasing 28 lower-priority ones to focus exploration efforts.

Simultaneously, at the Resende Lithium project in Minas Gerais, systematic soil sampling has identified promising follow-up areas for rare earth elements and battery metals such as tin, tantalum, and lithium. Australian Mines plans to undertake diamond drilling to intersect fresh greisen zones analogous to those exploited by nearby producers, alongside further auger drilling to delineate REE targets.

Sconi Project and Market Challenges

Despite ongoing headwinds in nickel and cobalt markets, Australian Mines continues to maintain its Sconi Battery Minerals Project in Queensland in good standing. The board acknowledges the difficulty of securing financing for a final investment decision (FID) under current commodity prices but highlights Sconi’s competitive advantages: its Australian jurisdiction, granted mining licences, and brownfields status which reduces technical and mining risks. Efforts are underway to streamline expenditures towards environmental impact studies and to engage with government funding and potential joint venture partners to enhance project value.

Financial Position and Outlook

The company ended the quarter with a cash balance of approximately $2.46 million, supporting ongoing exploration and development activities across its portfolio. Operating cash outflows reflect continued investment in resource definition and project advancement. Australian Mines remains committed to monetising secondary assets, such as the Broken Hill tenements, through partnerships and exploration funding.

Looking ahead, the market will be watching closely for assay results from the Brazilian drilling programs, which could significantly influence the company’s resource base and strategic direction. The enhanced scandium resource at Flemington positions Australian Mines well to capitalize on the metal’s rising profile in clean energy and advanced materials sectors.