Sunrise Energy Metals (ASX:SRL,OTCQX:SREMF) has received commitments to raise AU$45.6 million to fund pre-construction activities at its Syerston scandium project, the company said on Monday (November 17).
The conditional placement is for 10.7 million fully paid ordinary shares priced at AU$4.25 each. Participants have also subscribed to unlisted options on a one-for-one basis. They are exercisable at AU$4.25 per share over two years.
In September, Sunrise received a letter of interest from the Export-Import Bank of the US (EXIM) for up to AU$103 million in financing for the asset. The amount would cover about half of Sunrise’s expected development costs.
Robert Friedland, co-chair of Sunrise and a well-known mining industry financier, said at the time that the letter highlights the importance of scandium to the US as it looks for secure sources of critical minerals.
This week’s financing further clears the path forward for the company.
“This raising and the potential proceeds from the future exercise of options, combined with the letter of conditional funding support from (EXIM) for up to US$67 million, gives us excellent line of sight to a comprehensive financing package for the Syerston Project,” said Managing Director Sam Riggall in the firm’s release.
“Most importantly, it allows us to start work on delivering a new primary source of scandium at a time of significant supply risk given disruption to international trade flows in the metal,” he added.
Funds raised from the placement will be used to advance on-site work at Syerston, including pre-construction activities such as engineering. Water and power connection, as well as infill drilling for the mine plan, are on deck as well.
Sunrise will also pursue early works contracting to secure equipment on long lead times.
Located about 450 kilometres west of Sydney in New South Wales, Syerston hosts nearly 46 million tonnes of measured and indicated resources grading 414 parts per million scandium for more than 19,000 tonnes of the metal.
Sunrise says the project could produce around 60 tonnes of scandium a year over a 32 year mine life.
Construction and commissioning of the scandium operation are expected to take up to two years.
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Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.
