I ran the report through AI, and got the following fwiw -...

I ran the report through AI, and got the following fwiw - comments welcomed, this is not a commodity I'm completely familiar with in terms of resource / mining. Experts please weigh in as these seems bonkers. Please excuse erratic formatting

(1) Outline

The report details the maiden scandium resource estimates for the Melrose and Murga North areas, part of Rimfire Pacific Mining's Fifield Scandium Project in New South Wales. Some key points include:

1. Resource Estimates:

   • Melrose: 3 million tonnes (Mt) @ 240 ppm scandium (Sc), with a total of 1,120 tonnes of Sc oxide.
   • Murga North: 21 Mt @ 125 ppm Sc, translating to 4,050 tonnes of Sc oxide.

2. Exploration Target:

   • An exploration target for the broader Murga area has been set at 100–200 Mt with a scandium grade of 100–200 ppm. Further drilling will determine if it can be converted into a Mineral Resource.

3. Upside Potential:

   • There are plans to conduct infill drilling to potentially upgrade the resources and better define scandium mineralisation. The Murga North deposit remains open to the south and west.

4. Geological Context:

   • The scandium is hosted in flat-lying laterite (clay) horizons over ultramafic rock units (e.g., pyroxenite). The project is located in the highly prospective Lachlan Orogen.

5. Significance:

   • The scandium demand is expected to rise, with applications in high-strength aluminum alloys, hydrogen electrolysis, and solid oxide fuel cells. Scandium is on Australia's Critical Minerals List and the U.S. Geological Survey's 2022 list of critical minerals.

(2) Valuation

To estimate the potential value of the scandium resources from the Melrose and Murga North deposits, we need to consider the amount of scandium oxide (Sc₂O₃) in the resource and the market price of scandium oxide.

Resource Information:

• Melrose: 1,120 tonnes of Sc₂O₃
• Murga North: 4,050 tonnes of Sc₂O₃
• Total Sc₂O₃: 5,170 tonnes

Scandium Oxide Price:

• Scandium oxide prices range between US$2,100 to US$3,900 per kilogram according to recent data.

Tentative Valuation:

To estimate the value, we multiply the total scandium oxide resource by the price per kilogram:

• Lower Estimate (US$2,100/kg):
  5,170,000 kg × US$2,100 = US$10.86 billion

• Upper Estimate (US$3,900/kg):
  5,170,000 kg × US$3,900 = US$20.16 billion

(3) Potential Costs of Production

The report does not specify a direct estimate for the cost of production, but several factors influencing production costs were mentioned:

1. Mining Method: The deposit is expected to be mined using conventional shallow open-pit methods, with a truck and shovel operation potentially involving free digging of overburden without explosives. This could reduce mining costs for the laterite deposits .

2. Processing: The project considers two acid-leaching processes: high-pressure acid leaching (HPAL) or atmospheric pressure acid leaching (AL). The AL method is usually less costly than HPAL, but both processes are being evaluated for scandium extraction .

3. Toll Treatment: Rimfire is considering toll treating the mined material rather than building a stand-alone processing plant. This could significantly reduce upfront capital expenditure for processing infrastructure .

4. Recovery Rates: Metallurgical test work showed high recovery rates of up to 90.1% for scandium, 90.4% for nickel, and 92.5% for cobalt using an acid-leaching process . High recovery rates can enhance the economic viability of the project.

These elements suggest that while the processing costs might be moderate due to the planned methods, specific capital and operational cost estimates would require more detailed financial modeling.

The cost of production for scandium, cobalt, and nickel mines similar to the Melrose and Murga deposits can vary significantly depending on the mining method, geography, processing technology, and scale. However, a rough estimate for laterite-hosted scandium deposits would typically involve:

1. Mining Costs (Open-Pit)

• Shallow open-pit mining operations like the one proposed for Melrose and Murga are generally lower-cost compared to underground mining. Typical mining costs for open-pit operations range between:
  • US$5 to US$15 per tonne of ore mined.

2. Processing Costs (Acid Leaching)

• High-Pressure Acid Leaching (HPAL) and Atmospheric Leaching (AL) are the key processing methods for extracting scandium from laterite ores.
  • HPAL: Typically more expensive due to high energy and reagent costs, with processing costs ranging from US$30 to US$80 per tonne.
  • Atmospheric Leaching (AL): Lower energy costs compared to HPAL but still requires significant chemical inputs, with costs typically between US$20 to US$40 per tonne.

3. General & Administrative (G&A) and Sustaining Capital

• G&A and other sustaining costs usually add another US$10 to US$20 per tonne.

4. Total Operating Cost

• For scandium projects using open-pit mining and leaching methods, total operating costs can range from:
  • US$40 to US$100 per tonne of ore processed.

Example Projects for Reference

• Sunrise Energy Metals (formerly Clean TeQ) estimated their scandium oxide production cost at around US$557 per kg in their feasibility study for the Sunrise project, though that includes both mining and processing costs(ASX_ RIM@AU_090524_03442).
• Nyngan Scandium Project: Scandium International reported operating costs of US$557 to US$1,500 per kg of scandium oxide.

Estimated Costs for Melrose/Murga

Given these ranges, a rough estimate for production costs per tonne of ore processed at Melrose and Murga would be in the range of US$50 to US$100 per tonne, depending on which leaching process is chosen and the scale of the operation.