@tomsmithidg

Such a good question

I think most people here are more focused on cashflow, revenue and "the rule of 40" than the likelihood of a mining coy putting up a mine and generating cash for a finite period. Also Cashflow in perpetuity gives more investors a level of reassurance that their investment will pay off in time.

A mineral reserve or worse, resource, and NPV is only worth what it states "on paper" until the mine is built and actual money starts rolling in until the ore runs out and they need to do decommissioning.

I haven't really looked at mineral reserves and resources in ages.

@tomsmithidg @edgescape I recently took a look at Sunrise after Alan Kohler did an interview with the CEO (?last week, on Intelligent Investor). It's one of those companies that's been around for a decade or more, under different names (prev. Clean TeQ, a waste water company that had a nickel deposit on the side). It seemed as if the CEO Sam Riggall has a long history in Australian mining and the deposit at Syerston, near Fifield in NSW was originally in development for Nickel and Cobalt. We all know how the nickel story went, but more recently, they've realized they have a higher-than-usual concentration of Scandium in a specific area (the rim) of the deposit. Interesting chemistry leading to the concentration, and the amount they have is sizeable.

They've already got US EXIM backing for the project, conditional backing which they've provided a letter of support for about $67 million US which is a bit over half the 120 mil US capital needed to build a mine and processing plant and refinery. The refinery will produce scandium-oxide and scandium-oxide is perfectly fine to go into alloys, into fuel cells, into 3D printing applications. That proposed setup will produce 60 tonnes of scandium-oxide a year which is enough to completely replace 100 per cent of Chinese supply in the market today and enough to make the United States completely independent of China for scandium.

Sunrise still have to build it, so it's some way from actual production.

The thing about Scandium is that you cannot make aluminium alloys without it. At all. It's not surprising that Lockheed-Martin have signed a 15 tonnes per year offtake already.

SRL is now on my Watch List.

@Clio so I guess the big question is whether all the potential value is actually already priced into the stock and whether there is now more potential downside than upside. Any of our mining gurus got a view on this?

The resources sector is cyclical. In general, you have better odds of making money working out if it makes sense to buy when everyone is shitting on it not after its is up 20-30x in less than a year.

Attention and effort is better spent on finding the next SRL than working out if SRL makes sense after its gone up so much.

@Clio I think the amount of scandium used is variable depending on the application from my own reading.

Also I don't think manufacturers care where they get their scandium from as long as it's the cheapest and quickest option in my opinion. I heard this same view used by auto battery manufacturers when looking at nickel ie: they don't care if it's mined clean or honest as long as it's cheap and they won't pay a premium if it's mined clean.

The other concern is Scandium supply is dominated by China and we don't know if they have a hidden stash somewhere to dump on market and push prices artificially low. We hope they don't but with practically one country controlling price it's hard to know with pricing only viewed on the Shanghai metal exchange.