AUZ appoints specialist team to fast-track scandium PFS - due Q1 2027

Our critical minerals Investment Australian Mines (ASX: AUZ) just appointed a specialist consultant team to complete the Pre-Feasibility Study (PFS) for its Flemington scandium project in NSW.

AUZ's project is one of the highest grade scandium projects in the world.

It also happens to sit right next door to, and on the same geological structure as, $3.5BN Sunrise Energy Metals' scandium project.

The project that secured a US$400M conditional loan commitment from the US Department of War and is chaired by mining billionaire Robert Friedland.

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AUZ’s integrated PFS is targeted for completion in mid-first quarter of 2027.

Importantly, much of the existing scoping study work will be validated and carried forward where appropriate which accelerates the study and avoids redoing some of the work already done.

That scoping study was completed by SRK Consulting in April 2026 and is also doing these works.

SRK is a familiar name in the space and is also currently doing development study work for our $315M capped developer SGQ.

Because AUZ's resource base is already large and well drilled out (~98% sits in the higher confidence Measured and Indicated categories), the PFS work can focus on the out of ground items.

The PFS will focus on:

1. Updated metallurgical testwork (designed to support production of greater than 99.9% purity scandium oxide)
2. Mine planning inputs
3. Water supply and infrastructure
4. Geotechnical and tailings assessment
5. Environmental and approvals work, rehabilitation and closure
6. Project costs, economics and risk

The base case remains 60 tonnes per annum of scandium oxide production, with higher production scenarios of up to 180tpa (the ~3x case) also being assessed.

We like this, because although the current scandium market is small, there are a few modern tech applications that would take any significant increase in production, if it were there.

Particularly $114BN capped Bloom Energy, which adds scandium to the fuel cells it creates, which are being used to power data centres, so currently in high demand.

There are also key defence uses, as scandium can be added to metal to create a lighter, stronger alloy.

We covered this in our recent Deep Dive here: AUZ: US Military industrial base quietly buying up future scandium production...

AUZ’s next door neighbour, sharing the same ore body

As we said above, AUZ sits next door, along the same orebody to $3.5BN capped Sunrise Energy Metals, one of the biggest movers on the ASX over the past ~18 months.

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AUZ’s resource grade is slightly higher than Sunrise overall, although Sunrise is more advanced down the path to mining:

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Because both projects share the same orebody, we think if AUZ can take the same steps as SRL, that the valuation gap could close, here is a comparison of the recent studies for each:

(source)

Sunrise already has the following:

• The US Department of War is giving a US$400M conditional loan to,
• Major US defence contractor Lockheed Martin signed an offtake option with,
• Is chaired and majority owned by mining billionaire Robert Friedland, AND
• Sits on the same geological structure as our Investment AUZ’s asset next door

There is also an interesting demand side playing out from $114BN capped, NYSE listed Bloom Energy, which was recently announced to be joining the S&P 500.

Bloom makes fuel cells and they are made up of ~10% scandium oxide (locked by Bloom’s patents). (source)

Bloom posted its first ever US$1BN+ quarter, has a US$20BN+ backlog that management says is now growing faster than revenue, and is doubling its manufacturing capacity to a ~2GW per year run-rate by the end of this year. (source)

Each gigawatt of Bloom fuel cells needs ~25-60 tonnes of scandium. (source)

The entire global production capacity was ~80 tonnes of scandium last year. (source)

At the moment, Bloom consumes ~74% of the world's scandium making fuel cells that power AI data centres (servicing customers like Amazon and Oracle).

We went deep into Bloom and the macro in our initiation note: Our Latest Investment is Australian Mines Ltd (ASX: AUZ)

What else do we want to see AUZ deliver?

Drilling to grow the scandium resource

We want to see AUZ drill out and grow its scandium resources - so that the market can start to make stronger comparisons between AUZ and Sunrise’s asset.

Here are the milestones we are tracking:

🔲 Drilling approvals

🔲 Drilling commences

🔲 Drilling results

Progress the scandium project through to development

We want to see AUZ progress its scandium project through to being development ready.

The next major catalyst being a Pre Feasibility Study (PFS)

Here are the milestones we are tracking:

✅ PFS formally commenced and fast-tracked (May 2026)

🔄 Mine optimisation, metallurgical testwork, infrastructure

🔄 Assessment of 180tpa scale-up case

🔲 PFS completed (~Q1/Q2 2027)

Commercial progress for scandium asset

We also want to see AUZ execute the Sunrise playbook and convert:

🔄 Offtake / strategic partner discussions

🔲 First offtake, MOU or government-linked funding

Corporate - progress toward a US facing listing

This one is all about building up the company to get listed on a major US stock exchange OR become a takeover target for one of the big US listed critical minerals players (OR SPAC’s).

This one is out of AUZ’s control to some extent but we would like to see some progress toward a listing.