Sunrise Energy Metals Pursues US Location for Refinery to Unlock Government Funding

About Sunrise Energy Metals

Sunrise Energy Metals Limited (ASX:SRL) is an Australian company focused on developing its world-class Sunrise Nickel-Cobalt-Scandium Project in New South Wales, Australia. The Sunrise deposit is one of the largest and most cobalt-rich nickel laterite deposits globally and is considered development-ready, with all key permits and approvals secured. In addition to nickel and cobalt, Sunrise also owns one of the largest and highest-grade scandium deposits in the world.

Sunrise Pursuing US Location for RefineryIn a recent announcement on September 28, 2023, Sunrise Energy Metals revealed it is evaluating the potential to locate the planned nickel and cobalt refinery associated with its Sunrise Project in the United States rather than Australia.

The decision comes after extensive engagement with US electric vehicle manufacturers and US government agencies, which indicated strong demand for a US-based refinery to improve domestic supply of battery metals. A US location would potentially allow Sunrise to access grant funding under various US government programs aimed at developing critical mineral supply chains.

According to the announcement, the refinery would have capacity to produce up to 25,000 tonnes per annum of nickel and 7,000 tonnes per annum of cobalt, sufficient to support around 1 million electric vehicles annually. The estimated capital cost of the refinery is over US$200 million.

Strategic Significance for US Critical Mineral Supply

In a statement, Sunrise CEO Sam Riggall emphasized the strategic significance of the Sunrise deposit for the US and other western economies looking to diversify and strengthen critical mineral supply chains.

Feedback from recent meetings with auto manufacturers and government agencies in the US strongly supported relocating the refinery to satisfy eligibility criteria for government funding programs.

Key programs Sunrise could benefit from include:

• US Department of Energy funds under the Bipartisan Infrastructure Law
• Title III eligibility under the Defense Production Act
• US$20 billion Advanced Technology Vehicles Manufacturing loan program

Discussions Ongoing for US Scandium Refinery

In addition to nickel and cobalt, Sunrise indicated that constructive discussions are underway regarding construction of a stand-alone scandium refinery in the US.

Scandium is a critical metal used in aluminum alloys, fuel cells, electrolyzers, electronics, and telecommunications components. The US is the largest global consumer of scandium.

Sunrise owns one of the largest and highest-grade scandium deposits globally. The estimated capital cost for a US-based scandium refinery is US$24 million.

Ongoing Work to Secure Project Funding

The potential US relocation comes as Sunrise continues engagement with participants across the electric vehicle supply chain to secure complete financing for the Sunrise Project.

In addition to US government funding options, a US location for the refinery could attract interest and investment from US-based strategic partners. Sunrise has engaged a US advisor to assist with financing options.

The company emphasized that Project development will continue to be assessed to determine the optimal way to deliver the Project and finalize a comprehensive financing package.

Advancing a World-Class Battery Materials Project

Sunrise Energy Metals is focused on developing the Sunrise Battery Materials Complex in NSW, which will produce nickel, cobalt, and scandium to support the growing lithium-ion battery and electric vehicle market.

The Sunrise deposit is considered one of the largest and most cobalt-rich nickel laterite deposits globally. With over 1.65 million tonnes of contained nickel and 145,000 tonnes of contained cobalt, the project can support a long-life operation of more than 40 years.

Importantly, around 80% of Sunrise's nickel production over the first 10 years will be in the form of nickel sulfate, the premium product suited to lithium-ion batteries. The project is also unique with low levels of impurities, which will support production of high-purity battery materials.

With all major permits and approvals in place, Sunrise has completed extensive technical and feasibility studies which demonstrate a clear pathway to production. The project has robust economics, with competitive operating costs, low pre-production capital, and significant expansion potential.

Conclusion

Sunrise Energy Metals represents a promising opportunity for investors looking to gain exposure to the electric vehicle revolution. With a world-class project and strategic assets, the company is positioned to capitalize on strong demand growth for battery metals.

The potential US relocation of the refinery demonstrates Sunrise's proactive approach to securing optimal financing solutions and unlocking value. As Sunrise continues engaging with auto manufacturers, government agencies, and potential partners, investors can expect further positive developments.

With development-ready assets, a clear growth trajectory, and strategic significance to critical mineral supply chains, Sunrise Energy Metals ticks all the boxes for investors seeking battery metal exposure.