SCYYF 10-K & 10-Q changes, risk factors and insider trading
Scandium International Mining Corp. · OTC · Metal Mining · CIK 1408146 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
Largest changes
“Risks Related to the COVID-19 Pandemic. The current outbreak of the novel coronavirus (COVID-19) that was first reported from Wuhan, China in December 2019, and the spread of this virus could continue to have a material adverse effect on global economic conditions which may adversely impact our business. The World Health Organization (WHO) declared a global emergency on January 30, 2020 with respect to the outbreak and characterized it as a pandemic on March 11, 2020. …”see in full comparison
“Risks Related to the COVID-19 Pandemic. In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and related adverse public health developments, have adversely affected workforces, economies, and financial markets globally, leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or ability to raise funds.”see in full comparison
Full comparison: every changed paragraph (2)
Risks Related to the COVID-19 Pandemic. In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and related adverse public health developments, have adversely affected workforces, economies, and financial markets globally, leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or ability to raise funds.
Risks Related to the COVID-19 Pandemic. The current outbreak of the novel coronavirus (COVID-19) that was first reported from Wuhan, China in December 2019, and the spread of this virus could continue to have a material adverse effect on global economic conditions which may adversely impact our business. The World Health Organization (WHO) declared a global emergency on January 30, 2020 with respect to the outbreak and characterized it as a pandemic on March 11, 2020. Cases of COVID-19 have been reported in 223 countries, areas or territories as of February 17, 2021, including China, Australia, the United States, Canada and countries in the European Union. The extent to which the outbreak impacts the Company’s business will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and the actions to contain the outbreak or treat its impact, among others. Moreover, the actual and threatened spread of the coronavirus globally could also have a material adverse effect on the regional economies in which the Company intends to operate, continue to negatively impact stock markets and adversely impact the Company’s ability to raise capital. Any of these developments, and others, could have a material adverse effect on the Company’s business. In particular, the COVID-19 pandemic has resulted in restrictions including quarantines, closures, cancellations and travel restrictions, which may have a material adverse effect on the Company’s business including delays or disruptions in regulatory submissions, exploration activities on the Nyngan Scandium Project and CMR Project development.
Management's Discussion & Analysis (MD&A)
New heading “Cash flow discussion for the year ended December 31, 2023, compared to December 31, 2022”
Removed heading “Results of Operations for the Year ended December 31, 2022”
Removed heading “Property, plant and equipment”
Largest changes
“Cash flow discussion for the year ended December 31, 2023, compared to December 31, 2022”see in full comparison
“In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or ability to raise funds.”see in full comparison
see in full comparisonCashResultsflowofdiscussionOperations for theyearYear ended December 31,2022, compared to December 31, 20212023
Accounting Standards Updatesee in full comparison2021-042023-07-–EarningsSegmentPer ShareReporting (Topic260), Debt Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging Contracts in Entity’s Own Equity (Subtopic 815-40280). This update is toprovideimproveclaritythearounddisclosuresearningsaboutperasharepubliccalculationsentity’s reportable segments through enhanced disclosures about significant segment expenses and is effective for fiscal years beginning after December 15,2021,2023,includingand interim periods withinthosefiscalyears.years beginning after December 15, 2024. The Companyhasisreviewedreviewing this standardandbutdeterminedanticipatesthere is nolittle impact on its financial statements.
Full comparison: every changed paragraph (27)
The outbreak of COVID-19 and political upheavals in various countries have caused significant volatility in commodity prices. While these effects are expected to be temporary, the duration of the business disruptions internationally and related financial impact cannot be reasonably estimated at this time.
In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or ability to raise funds.
On December 31, 2023, we had working capital of $712,908 including cash of $1,021,956 and current liabilities of $349,259 as compared to working capital of $378,527 including cash of $1,852,710 at December 31, 2022.
On December 31, 2022, we had working capital of $378,527 including cash of $1,852,710 and current liabilities of $1,507,724 as compared to working capital of $(1,598,778) including cash of $93,894 at December 31, 2021.
On December 31, 2022,2023, we had a total of 34,665,00040,015,000 (20212022 – 34,615,00034,665,000) stock options exercisable between C$0.065C$0.035 and C$0.225C$0.180 (20212022 – between C$0.065 and C$0.37C$0.225) which have the potential upon exercise to generate a total of C$4,753,500C$3,833,750 (20212022 – C$5,962,625C$4,753,500) in cash over the next four and a half years. On December 31, 2022,2023, we had a total of 37,803,218 (20212022 – Nil37,803,218) warrants exercisable at C$0.1075 which have the potential upon exercise to generate a total of C$4,063,218.C$4,063,846. There is no assurance that these securities will be exercised.
The net profit for the quarter increased by $443,482 to $228,371 from a loss of $215,111 in the prior year. Details of the individual items contributing to the decreased loss are as follows:
Results of Operations for the Year ended December 31, 2022
The net profitloss for the yearquarter increaseddecreased by $2,417,628$362,143 to $850,596$133,772 from a lossprofit of $1,567,032$228,371 in the priorquarter year,ended December 31, 2022. Details of the individual items contributing to the decreased net loss are as follows:
CashResults flowof discussionOperations for the yearYear ended December 31, 2022, compared to December 31, 20212023
The net profit for the year decreased by $803,392 to $47,204 from a profit of $850,596 in the prior year, Details of the individual items contributing to the decreased net loss are as follows:
Cash flow discussion for the year ended December 31, 2023, compared to December 31, 2022
The cash outflow from operating activities increaseddecreased by $573,510$116,961 to $947,715$830,754 (20212022 – $374,205$947,715) due mainly to due mainly to payment of accrued salaries in 2022.
Cash inflows from financing activities of $2,706,531 reflect the private placement and options being exercised in the current nine-month period$Nil when compared to the year ended December 30, 2021,2022, in which private placement and options being exercised brought in $297,815.$2,706,531.
YearendYear-end Cashcash increaseddecreased by $1,758,816$830,754 to $1,852,710$1,021,956 (20212022 - $93,894$1,852,710) due mainly to a privatereduction placementin accounts payable and exploration activities carried out in Q2 20222022.
Prepaid expenses and receivables have decreasedincreased by $1,501$6,670 to $33,541$40,211 (20212022 - $35,042$33,541) due to lowerincreased activity levels in 2022.
Property, plant and equipment
Property plant and equipment consists of office furniture and computer equipment at the Sparks, Nevada office. The decrease of $2,932 to $Nil at December 31, 2022 (2021 - $2,932) is due to the disposal of that office furniture and computer equipment in the nine-month period.
Accounts payable, accounts payable with related parties, accrued liabilities and Derivative liability – warrants have decreased by $219,990$1,158,465 to $1,507,724$349,259 at December 31, 20222023 (20212022 – $1,727,714$1,507,724) due to revaluation of warrant derivative liability beingand classed as a current liability which was partially offset by the write offpayment of certainaccrued salary deferrals.salaries.
Capital stock did not change in 2023 - $111,144,603 (2022 - $111,144,603).
Capital stock increased by $995,426 to $111,144,603 (2021 - $110,149,177) due to a private placement in Q2 of 2022 and stock option exercises.
Additional paid-in capital increased by $127,606$287,515 to $7,019,116$7,306,631 (20212022 - $6,891,510$7,019,116) as a result of stock option expensing which was partially offset by stock option exercises.expensing.
Treasury shares remained at $1,264,194 through the 2023 and 2022 fiscal period.periods.
During the year ended December 31, 2022,2023, the Company expensed a consulting fee of $Nil (2022 - $17,000) to one of its directors. During the year ended December 31, 2021, the Company expensed a consulting fee of $102,000 to one of its directors.
During the year ended December 31, 2022,2023, the Company reversed $669,723$Nil (20212022 - $Nil$669,733) of accruals to related parties, pursuant to settlement agreements.
At March XX26, 2, 20232024 we had 355,860,144355,860,813 issued and outstanding common shares and 28,965,00040,015,000 outstanding stock options at a weighted average exercise price of C$0.121.C$0.10. Also, there were 37,803,218 warrants outstanding at C$10.75 at March 7,26, 2023.2024.
Accounting Standards Update 2021-042023-07 -– EarningsSegment Per ShareReporting (Topic 260), Debt Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging Contracts in Entity’s Own Equity (Subtopic 815-40280). This update is to provideimprove claritythe arounddisclosures earningsabout pera sharepublic calculationsentity’s reportable segments through enhanced disclosures about significant segment expenses and is effective for fiscal years beginning after December 15, 2021,2023, includingand interim periods within those fiscal years.years beginning after December 15, 2024. The Company hasis reviewedreviewing this standard andbut determinedanticipates there is nolittle impact on its financial statements.
Accounting Standards Update 2023-09 – Income Taxes (Topic 740). This update is to enhance the transparency and decision usefulness of income tax disclosures for fiscal years beginning after December 15, 2024. The Company is reviewing this standard to determine the impact on its financial statements.
What changed in the latest 10-Q
Risk Factors
We could not find a separate Risk Factors item in the latest 10-Q. Some companies leave it out of quarterly reports; see the annual 10-K risk factors and the original filing. Open the filing on SEC.gov.
Management's Discussion & Analysis (MD&A)
Removed heading “Downstream Scandium Products”
Removed heading “Master Alloy Capability Demonstrated”
Removed heading “Focus on Aluminum Alloy Applications for Scandium Products”
Removed heading “Cerium-Scandium Aluminum Alloy Program Agreement”
Largest changes
“During the 2015-2017 timeframe, we continued our own internal laboratory-scale investigations into the production of aluminum-scandium master alloys, furthering our understanding of commercial processes, and achievable recoveries. We also advanced our abilities to make a commercial-grade 2% scandium master alloy product.”see in full comparison
“On March 2, 2017, we announced the signing of a Memorandum of Understanding ("MOU") with Weston Aluminium Pty Ltd. ("Weston") of Chatswood, NSW, Australia. The MOU defines a cooperative commercial alliance to jointly develop the capability to manufacture aluminum-scandium master alloy. The intended outcome of this alliance will be to develop the capability to offer Nyngan Scandium Project aluminum alloy customers scandium in form of Al-Sc master alloy, should customers prefer that product form.”see in full comparison
Full comparison: every changed paragraph (44)
The following discussion of the operating results, corporate activities and financial condition of Scandium International Mining Corp. (hereinafter referred to as “we”, “us”, “Scandium International”, “SCY”, or the “Company”) and its subsidiaries provides an analysis of the operating and financial results between December 31, 2023, and JuneSeptember 30, 2024, and a comparison of the material changes in our results of operations and financial condition between the three and sixnine month periods ended JuneSeptember 30, 2024, and the three and sixnine month periods ended JuneSeptember 30, 2023. This discussion should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2023.
The information contained within this report is current as of AugustNovember XX,13, 2024, unless otherwise noted. Additional information relevant to the Company’s activities can be found on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
Our most advanced project is the Nyngan Scandium Project, located in New South Wales, Australia (the “Nyngan Scandium Project”), on which we hold a mine lease grant and a development consent. We also hold an exploration license on a scandium mineral property located near Nyngan known as the “Honeybugle Scandium property.” We did not renew an exploration license on a scandium mineral property in Finland, known as the “Kiviniemi Scandium property.”
As its first priority, the new management completed a C$3.4 million non-brokered equity private placement which replenished cash balances and eliminated negative working capital. The second priority was to reduce costs, and the Company has been successful in reducing corporate G&A costs, including for example, that our CEO and CFO agreed to receive no cash compensation from their appointment in 2022 until present. Our plan of operation for 2024 is to continue to advance commercial discussions with potential offtake partners. The completion of a sufficient number of offtake agreements totalling a minimum quantity is the critical factor to enable the Company to be in a position to consider taking a Final Investment Decision to put the Nyngan Scandium Project into production. At the same time, the capital raise in 2022, positive working capital and no debt, and the reduction of operating costs have given the Company time to be in a position to benefit from the growing market adoption of scandium.
Our plan of operation for 2024 is to continue to advance commercial discussions with potential offtake partners. The completion of a sufficient number of offtake agreements totalling a minimum quantity is the critical factor to enable the Company to be in a position to consider taking a Final Investment Decision to put the Nyngan Scandium Project into production. At the same time, the capital raise in 2022, positive working capital and no debt, and the reduction of operating costs have given the Company time to be in a position to benefit from the growing market adoption of scandium.
Cautionary Note to U.S. Investors Regarding Resource Estimates The Company’s technical disclosure in this section uses certain terms which are defined by the Canadian Institute of Mining, Metallurgy and Petroleum, and required to be disclosed in accordance with Canadian National Instrument 43-101 (“NI 43-101”). The disclosure standards in the United States Securities and Exchange Commission’s (the “SEC”) Subpart 1300 of Regulation S-K contain significant differences from the disclosure requirements of NI 43-101 and information presented in this section may not be comparable with United States standards in documents filed with the SEC. Accordingly, information concerning mineral deposits set forth in this section may not be comparable with information presented by companies using only United States standards in their public disclosures.
Downstream Scandium Products
In February 2011, we announced the results of a series of laboratory-scale tests investigating the production of aluminum-scandium master alloys directly from aluminum oxide and scandium oxide feed materials. The overall objective of this research was to demonstrate and commercialize the production of aluminum-scandium master alloy using impure scandium oxide as the scandium source, potentially significantly improving the economics of aluminum-scandium master alloy production. In October 2019, the Company was granted Patent No. 10450634, titled “Scandium-Containing Master Alloys And Method For Making The Same.”
During the 2015-2017 timeframe, we continued our own internal laboratory-scale investigations into the production of aluminum-scandium master alloys, furthering our understanding of commercial processes, and achievable recoveries. We also advanced our abilities to make a commercial-grade 2% scandium master alloy product.
On March 2, 2017, we announced the signing of a Memorandum of Understanding ("MOU") with Weston Aluminium Pty Ltd. ("Weston") of Chatswood, NSW, Australia. The MOU defines a cooperative commercial alliance to jointly develop the capability to manufacture aluminum-scandium master alloy. The intended outcome of this alliance will be to develop the capability to offer Nyngan Scandium Project aluminum alloy customers scandium in form of Al-Sc master alloy, should customers prefer that product form.
The MOU outlines steps to jointly establish the manufacturing parameters, metallurgical processes, and capital requirements to convert Nyngan Scandium Project scandium product into Master Alloy, at Weston's existing production site in NSW. The MOU does not include a binding contract with commercial terms at this stage, although the intent is to pursue the necessary technical elements to arrive at a commercial contract for conversion of scandium oxide to master alloy, and to do so prior to first mine production from the Nyngan Scandium Project.
On March 5, 2018, the Company announced that it had initiated a small scale pilot program (4kg scale) at the Alcereco Inc. metallurgical research facilities in Kingston, Ontario, to confirm and refine previous lab-scale work on the manufacture of aluminum-scandium 2% master alloy (MA). The program advanced the process understanding for commercial scale upgrade of Nyngan scandium oxide product to master alloy product.
The 2018 pilot program consisted of 5 separate trials on two MA product types, production of MA in various forms, and dross analysis to ascertain scandium recoveries to product. The mass of master alloy and product variants produced in the program totaled approximately 20kg and was completed in December of 2018. The results of the program included the successful production of 2% grade MA, with recoveries of scandium to product of 85%.
A second phase of the small-scale pilot program was initiated in the first half of 2019, again at 4kg scale, building on the work done in phase I. The results of this second program included successful production of 2% grade MA, with improvements in form of rapid kinetics, and recoveries of scandium to product of +90%.
On March 5, 2018, the Company also announced that it filed for patent protection on certain process refinements for master alloy manufacture that it believes are novel methods, and also on certain product variants that it believes represent novel forms of introducing scandium more directly into aluminum alloys. In April of 2021, the Company was granted Patent No. 10,988,830, titled “Scandium Master Alloy Production.”
Master Alloy Capability Demonstrated
On February 24, 2020, the Company announced the completion of a three year, three stage program to demonstrate the capability to manufacture aluminum-scandium master alloy (Al-Sc2%), from scandium oxide, using a patent pending melt process involving aluminothermic reactions.
This master alloy capability will allow the Company to offer scandium product from the Nyngan Scandium Project in a form that is used directly by aluminum alloy manufacturers globally, either major integrated manufacturers or smaller wrought or casting alloy consumers.
Research Highlights:
Focus on Aluminum Alloy Applications for Scandium Products
Our focus is on the use of scandium as an alloying ingredient in aluminum-based products. The specific scandium product forms we intend to sell from the Nyngan project include both scandium oxide (Sc2O3) and aluminum-scandium master alloys (Al-Sc 2%).
Scandium as an alloying agent in aluminum allows for aluminum metal products that are much stronger, more easily weldable and exhibit improved performance at higher temperatures than current aluminum-based materials. This means lighter structures, lower manufacturing costs and improved performance in areas that aluminum alloys do not currently compete.
Cerium-Scandium Aluminum Alloy Program Agreement
On February 27, 2020, the Company announced signing a Program Agreement with Eck Industries (“ECK”) located in Manitowoc, Wisconsin, to pursue novel alloy development of a combined cerium-scandium aluminum alloy, based on previous work done independently by the companies in this area.
The companies intend to pursue alloy refinements in both wrought and cast alloy applications, specifically targeting property improvements related to strength, corrosion resistance, and heat-working tolerance, principally in A5000 series alloys.
Program Highlights:
The Company’s results on a year-to-date basis reflect lower operating costs. Cash expenditures were $48,206$235,842 higherlower primarily due to higherlower exploration costs.and salaries and benefit costs when compared to the year-to-date cash expenditures of the nine-month period ended September 30, 2023.
Results of Operations for the three months ended JuneSeptember 30, 2024
The net loss for the quarter was $4,257,$79,620, a decrease of $125,499$154,352 from a lossnet profit of $129,756$74,732 in the same quarter of the prior year. Details of the individual items contributing to the net decrease are set out below at Table 2:
Results of Operations for the sixnine months ended JuneSeptember 30, 2024
The net loss for the six monthnine-month period was $155,453,$235,073, a decrease of $261,697$416,049 from a net profit of $106,244$180,976 in the same sixnine month period of the prior year. Details of the individual items contributing to the net decrease are set out below at Table 3.
Cash flow discussion for the six-monthnine-month period ended JuneSeptember 30, 2024, compared to JuneSeptember 30, 2023
The cash outflow for operating activities was $221,432,$303,482, a decrease of $270,464$414,208 (JuneSeptember 30, 20222023 – $491,896$717,690).
The Company’s cash position decreased during the six-monthnine-month period by $201,004$303,482 to $800,524$718,474 (December 31, 2023 - $1,021,956). due mainly to payments of accrued salaries.
Prepaid expenses and accounts receivable increaseddecreased by $19,783$26,765 to $20,428$13,446 during the six-monthnine-month period due to the accruingexpensing of interest earned on cash depositsprepaids (December 31, 2023 - $40,211).
Mineral interests remained the same at $704,053 (December 31, 2023 - $704,053).$704,053.
Current liabilities have decreased by $86,087$95,048 to $263,172$254,211 (December 31, 2023 – $349,29$349,259) due to the warrant derivative liability being decreased.decreased and the payment of accrued salaries. Excluding the derivative liability, ana increasedecrease of $939$11,666 took place for this item.
Additional paid-in capital remained at $7,306,631 (December 31, 2023 - $7,306,631).$853,400.
At JuneSeptember 30, 2024, the Company had a working capital of $557,780$477,709 including cash of $800,524,$718,474, as compared to a working capital of $712,908 including cash of $1,021,956 at December 31, 2023.
At JuneSeptember 30, 2024, the Company had a total of 36,725,000 stock options exercisable between C$0.065C$0.035 and C$0.350C$0.180 that have the potential upon exercise to generate a total of C$3,341,000C$3,312,750 in cash over the next four and a halfquarter years. There is no assurance that these securities will be exercised. At JuneSeptember 30, 2024, the Company had a total of 37,803,218 share purchase warrants exercisable at C$0.1075 that have the potential upon exercise to generate a total of C$4,063,846 in cash over the next three years. The Company’s continued development is contingent upon its ability to raise sufficient financing both in the short and long term. There are no guarantees that additional sources of funding will be available to the Company; however, management is committed to pursuing all possible sources of financing in order to execute its business plan. The Company continues its cost control measures to conserve cash to meet its operational obligations.
At JuneSeptember 30, 2024, the Company had no material off-balance sheet arrangements such as guarantee contracts, contingent interest in assets transferred to an entity, derivative instruments obligations or any obligations that trigger financing, liquidity, market or credit risk to the Company.
During the 6-month9-month period ended JuneSeptember 30, 2024, the Company expensed $Nil for stock-based compensation for stock options granted to Company directors. During the 6-month9-month period ended JuneSeptember 30, 2023, the Company expensed $44,367$54,317 for stock-based compensation for stock options issued to Company directors.
As at JuneSeptember 30, 2024, the Company owed $5,002$5,193 to an officer of the Company. (December 31, 2023 - $5,104).
The Company’s financial instruments consist of cash, receivables, accounts payable, accounts payable with related parties, accrued liabilities and promissory notes payable. It is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from its financial instruments. The fair values of these financial instruments approximate their carrying values unless otherwise noted. The Company has its cash primarily in three commercial banks: (i) one in Vancouver,Hamilton, British Columbia,Ontario, Canada, (ii) one in Mackay, Queensland, Australia, and (iii) one in Chicago,Los Illinois,Angeles, California, United States.
SCYYF insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding SCYYF (13F)
None of the 59 investors we track reported a position in their latest 13F.