Australian Mines Limited announced the results from a Scoping Study conducted by independent engineering firm, Ausenco, into the production of Precursor Cathode Active Material (P-CAM) products by Australian Mines at its Sconi Project in North Queensland. The Scoping Study included an economic evaluation of incorporating a P-CAM production circuit into the proposed Sconi operation and follows a year of successful test production by Australian Mines of P-CAM products for the NCM (Nickel-Cobalt-Manganese) 523, NCM 622 and NCM 811 batteries chemistries used across the electric vehicle industry. The Scoping Study was carried out by Ausenco and covered, at a concept level, incorporating a P-CAM production facility as an alternative to the nickel and cobalt sulphate crystallisation process included in the Sconi Bankable Feasibility Study (BFS). Australian Mines is continuing to prioritise and progress the development of its 100%-owned Sconi Project in North Queensland. As part of this ongoing process the Company is continually evaluating new and innovative opportunities to improve the value to shareholders of the Sconi Project, particularly in the context of a rapidly evolving global battery market driven by green energy technology and the growth and evolution of electric vehicles. The pursuit of shareholder value accretion includes research and development into the production of higher value-add Precursor Cathode Active Material (P-CAM) for Nickel-Cobalt-Manganese (NCM) batteries, based on nickel, cobalt and manganese sourced exclusively from the Company's Sconi Project. Australian Mines has successful concluded preliminary test work to produce P-CAM products for NCM523, NCM622 and NCM811 batteries whose specifications mirror those sought by major electric vehicle battery manufacturers (or OEMs). The Scoping Study covers the evaluation of the economics of incorporating a P-CAM production facility as part of the Sconi Project, including the development of capital and operating cost estimates within a ±30% accuracy. The baseline for the Sconi Project was established by utilising the existing Sconi BFS, which was based on the production of nickel and cobalt sulphate. In Ausenco's Scoping Study, P-CAM production replaces the nickel and cobalt sulphate crystallisation stages of the Sconi processing flow chart. The Scoping Study includes a processing flow chart for producing P-CAM for NCM 622 and NCM 811 battery chemistries using nickel, cobalt and manganese sulphates derived exclusively from Sconi ore. This P-CAM processing flow chart is designed to be an extension of the proven industry standard processing technologies that underpinned the Sconi BFS. The process design utilised in the Scoping Study considered receipt of the following process streams at the P-CAM facility: 14,997 tonnes per year nickel (as 125 g/L nickel in a nickel sulphate solution); 2,279 tonnes per year cobalt (as 104 g/L cobalt in a cobalt sulphate solution); 2,124 tonnes per year manganese (as 104 g/L manganese in a manganese sulphate solution) and the production of: NCM 811: 25,708 tonnes per year plus; NCM 622: 4,778 tonnes per year. The capital cost of the nickel and cobalt sulphate crystalliser circuit in the BFS was estimated at AUD 49 million. The estimated capital cost of the P-CAM facility in the Scoping Study is AUD 153 million. Therefore, replacing the crystalliser circuit with the P-CAM facility would result in an uplift in capital cost estimates of AUD 104.6 million from the original BFS. The overall incremental operating cost for the P-CAM facility at Sconi is an increase of AUD 46.8 million per year. This is a result of the operating costs for the P-CAM facility of AUD 52.6 million per year less the takeout operating cost from the Sconi refinery for the removal of the nickel and cobalt sulphate crystalliser areas, estimated to be AUD 5.8 million per year. P-CAM Facility Economic Evaluation - The capital and operating costs in the previous section were used to conduct an economic evaluation of the P-CAM facility on a stand-alone basis. It is clear from the results below that the incorporation of a P-CAM process facility into the Sconi Project will have a positive economic impact, compared to the processing of nickel and cobalt sulphate, as outlined in the Sconi BFS. The product price assumptions used in the evaluation were provided by Australian Mines via an independent pricing report undertaken by CRU Consulting. The CRU pricing forecasts for the sale of the P-CAM products are: USD 16,500 per tonne for NCM 811 (25,708 average tonnes per annum Life-of-Mine Sconi); USD 18,800 per tonne for NCM 622 (4,778 average tonnes per annum Life-of-Mine Sconi) versus; USD 3,684 per tonne for nickel sulphate (46,800 average tonnes per annum Life-of-Mine); USD 15,540 per tonne for cobalt sulphate (7,000 average tonnes per annum Life-of-Mine). Operating costs outlined in the Scoping Study were AUD 1,717 per tonne of NCM P-CAM product produced at Sconi. The estimated annual cash flow over the initial 12 years of operating a P-CAM processing facility at Sconi indicates a simple payback period of 1.6 years and a discounted payback of 1.8 years. In addition, the Scoping Study assumes an 85% operating uptime for the Sconi facility which provides more than adequate time for routine maintenance and repairs. The Scoping Study also leverages Australian Mines' existing access agreement to the approved export port at Townsville. Australian Mines will ship Sconi P-CAM products, packed in 25-kilogram bags, stacked onto pallets and shrink wrapped with plastic to secure the load. The cost structure of the existing Sconi BFS was reviewed as part of the Scoping Study, which concluded costs for the front end of the plant may be escalated by 6.25% per annum since the release date of the BFS. This increase in the cost base is reflected in the project's economics. However, it should be noted that the increased cost is still well within the contingency allocated to the Sconi Project in the BFS, and it does not necessarily translate to any increase in the overall Sconi capital expenditure. Next Steps - Following the positive results returned from the initial Scoping Study, Australian Mines is seeking to move quickly to commence a more detailed Pre-Feasibility Study (PFS) in relation to the integration of a P-CAM production facility into the proposed Sconi refinery. The Company will provide further details, including the anticipated timeline of the PFS, during the September 2021 quarter.