Metals explorer Australian Mines (ASX: AUZ) will be able to fast-track development of its $1.4 billion Sconi cobalt-nickel-scandium asset in north Queensland after the state government deemed it a prescribed project.
The declaration from State Development, Manufacturing, Infrastructure and Planning Minister Cameron Dick will enable the final stages of regulatory approvals for the Sconi project to be streamlined.
Australian Mines managing director Benjamin Bell welcomed the Queensland Government’s decision to endorse Sconi.
“I am delighted that Minister Cameron Dick has formally recognised the regional economic development potential of our Sconi project in regional north Queensland with this decision,” he said.
Mr Bell said the project endorsement would provide the company with “co-ordinated agency support from the state government” as it moves into the final stages of approvals.
Sconi a boost for regional Queensland
The Sconi cobalt-nickel-scandium project is located 225 kilometres inland from Townsville in northern Queensland.
As the largest city in northern Australia, Townsville is considered the gateway to mining and agricultural hubs in the region.
The development of Sconi is set to be provide a boost for the local economy, with Australian Mines aiming to allocate 90% of the ongoing annual operational expenditure to local businesses from the surrounding Charters Towers and Townsville area.
According to Sconi’s bankable feasibility study, released last November, $922 million of the project’s total capital expenditure is anticipated to be spent with Australian businesses, with a preference for north Queensland companies.
Queensland Premier Annastacia Palaszczuk said the project would deliver much-needed jobs for the region and make significant contributions to the local economy.
“It’s a very happy new year for north Queensland,” she said.
“We’re talking about a project set to create up to 500 jobs during its two-year construction period and we’ll see more than 300 full-time equivalent jobs for the 18-year operational period.”
Construction set to kick off
Construction for the Sconi project is anticipated to start in 2019, with Australian Mines also set to open an office in the regional towns of Townsville, Charters Towers or Greenvale.
Sconi’s proposed development is based on three pits and a 2 million tonne-per-annum processing plant, with an 18-year mine life and average annual revenue from production estimated at $512 million.
The Sconi project has a proven ore reserve of 6.93Mt grading 0.79% nickel and 0.1% cobalt.
Earlier this week, the company announced it has engaged an independent resource consultant to immediately begin a re-estimation of the Sconi mineral resource after the latest round of drilling returned intersections grading as high as 3.4% cobalt.
Australian Mines also recently announced the purchase of a 13-acre parcel of freehold land within Greenvale, which is located just 10km from Sconi.
Shares in Australian Mines soared 15.7% on the news to $0.044.