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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2017

[   ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to __________________

000-54416
(Commission File Number)

SCANDIUM INTERNATIONAL MINING CORP.
(Exact name of registrant as specified in its charter)

British Columbia, Canada	98-1009717
(State or other jurisdiction	(IRS Employer
of incorporation or organization)	Identification No.)

1430 Greg Street, Suite 501, Sparks, Nevada 89431
(Address of principal executive offices) (Zip Code)

(775) 355-9500
(Registrant’s telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) filed all reports required to be filed by sections 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [   ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. Large accelerated filer [ ] Accelerated filer [   ]    Non-accelerated filed [   ]    Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company, as defined in Rule 12b-2 of the Exchange Act. Yes [ ] No [X]

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: As of May 12, 2017, the registrant’s outstanding common stock consisted of 229,486,261 shares.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

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UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2017

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Scandium International Mining Corp.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Expressed in US Dollars) (Unaudited)

As at:		March 31, 2017			December 31, 2016
ASSETS
Current
Cash	$	798,037		$	615,234
Prepaid expenses and receivables		36,011			51,227
Total Current Assets		834,048			666,461
Equipment (Note 3)		2,643			2,918
Mineral property interests (Note 4)		704,053			704,053
Total Assets	$	1,540,744		$	1,373,432
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current
Accounts payable and accrued liabilities	$	39,015		$	27,649
Accounts payable with related parties (Note 5)		-			13,704
Total Liabilities		39,015			41,353
Stockholders’ Equity
Capital stock (Note 6) (Authorized: Unlimited number of common shares;    Issued and outstanding: 229,151,261 (2016 – 225,047,200))		91,766,489			91,142,335
Treasury stock (Note 7) (1,033,333 common shares)(2016 – 1,033,333)		(1,264,194	)		(1,264,194	)
Additional paid in capital (Note 6)		7,728,451			6,844,671
Accumulated other comprehensive loss		(853,400	)		(853,400	)
Deficit		(94,774,376	)		(93,446,610	)
Total Stockholders’ Equity		2,602,970			2,422,802
Non-controlling Interest in a Subsidiary (Note 9)		(1,101,241	)		(1,090,723	)
Total Equity		1,501,729			1,332,079
Total Liabilities and Equity	$	1,540,744		$	1,373,432

Nature and continuance of operations (Note 1)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Scandium International Mining Corp.

CONDENSED CONSOLIDATED STATEMENTS OF

OPERATIONS AND COMPREHENSIVE LOSS

(Expressed in US Dollars) (Unaudited)

3 month period ended		March 31, 2017			March 31, 2016
EXPENSES
Amortization (Note 3)	$	275		$	1,064
Consulting		26,400			25,500
Exploration		14,525			512,289
General and administrative		58,422			78,986
Insurance		7,191			8,551
Professional fees		2,645			26,269
Salaries and benefits		151,643			115,924
Stock-based compensation (Note 6)		1,075,968			395,813
Travel and entertainment		21,677			15,997
		(1,358,746	)		(1,180,393	)
Foreign exchange gain		20,462			137
Loss and comprehensive loss for the period		(1,338,284	)		(1,180,256	)
Costs allocable to non-controlling interest in a subsidiary		10,518			99,160
Loss and comprehensive loss for the period attributable to Scandium International Mining Corp.	$	(1,327,766	)	$	(1,081,096	)
Basic and diluted loss and comprehensive loss per common share attributable to Scandium International Mining Corp.	$	(0.01	)	$	(0.01	)
Weighted average number of common shares outstanding		226,296,998			225,047,200

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Scandium International Mining Corp.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in US Dollars) (Unaudited)

3-month period ended		March 31,			March 31,
		2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period	$	(1,338,284	)	$	(1,180,256	)
Items not affecting cash:
Amortization		275			1,064
Stock-based compensation		1,075,968			395,813
Changes in non-cash working capital items:
Decrease (increase) in prepaids and receivables		15,216			(15,676	)
Decrease in accounts payable, accrued liabilities and accounts payable with related parties		(2,338	)		(115,733	)
		(249,163	)		(914,788	)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to fixed assets		-			(3,157	)
		-			(3,157	)
CASH FLOWS FROM FINANCING ACTIVITIES
Common shares issued		261,375			-
Options exercised for common shares		170,591			-
		431,966			-
Change in cash during the period		182,803			(917,945	)
Cash, beginning of period		615,234			2,249,676
Cash, end of period	$	798,037		$	1,131,731
		2017			2016
Cash paid during the 3 month period for interest	$	-		$	-
Cash paid during the 3 month period for taxes	$	-		$	-

There were no significant non-cash investing and financing activities during the periods ended March 31, 2017 and 2016.

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Scandium International Mining Corp.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN

EQUITY

(Expressed in US Dollars) (Unaudited)

														Accumulated						Total			Non-
								Additional			Treasury			Other						Stockholders’			controlling
		Number of						Paid in			Stock			Comprehensive			Deficit			Equity			Interest in a
		Shares			Capital Stock			Capital						Loss									Subsidiary			Total Equity
Balance, December 31, 2015		225,047,200		$	91,142,335		$	6,375,237		$	(1,264,194	)	$	(853,400	)	$	(91,338,182	)	$	4,061,796		$	(966,588	)	$	3,095,208
Stock-based compensation		-			-			469,434			-			-			-			469,434			-			469,434
Loss for the year		-			-			-			-			-			(2,108,428	)		(2,108,428	)		(124,135	)		(2,232,563	)
Balance, December 31, 2016		225,047,200			91,142,335			6,844,671			(1,264,194	)		(853,400	)		(93,446,610	)		2,422,802			(1,090,723	)		1,332,079
Private placement		1,179,061			261,375			-			-			-			-			261,375			-			261,375
Options exercised		2,925,000			362,779			(192,188	)		-			-			-			170,591			-			170,591
Stock-based compensation		-			-			1,075,968			-			-			-			1,075,968			-			1,075,968
Loss for the period		-			-			-			-			-			(1,327,766	)		(1,327,766	)		(10,518	)		(1,338,284	)
Balance, March 31, 2017		229,151,261		$	91,766,489		$	7,728,451		$	(1,264,194	)	$	(853,400	)	$	(94,774,376	)	$	2,602,970		$	(1,101,241	)	$	1,501,729

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Scandium International Mining Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017

(Expressed in US Dollars) (Unaudited)

1.	NATURE AND CONTINUANCE OF OPERATIONS
	Scandium International Mining Corp. (the “Company”) is a specialty metals and alloys company focusing on scandium and other specialty metals.
	The Company was incorporated under the laws of the Province of British Columbia, Canada in 2006. The Company currently trades on the Toronto Stock Exchange under the symbol “SCY”.
	The Company’s focus is on the exploration and evaluation of its specialty metals assets, specifically the Nyngan scandium deposit located in New South Wales, Australia. The Company is an exploration stage company and anticipates incurring significant additional expenditures prior to production at any and all of its properties.
	These condensed consolidated financial statements have been prepared on a going concern basis that contemplates the realization of assets and discharge of liabilities at their carrying values in the normal course of business for the foreseeable future. These financial statements do not reflect any adjustments that may be necessary if the Company is unable to continue as a going concern.
	The Company currently earns no operating revenues and will require additional capital in order to advance the Nyngan property. The Company’s ability to continue as a going concern is uncertain and is dependent upon the generation of profits from mineral properties, obtaining additional financing and maintaining continued support from its shareholders and creditors. These are material uncertainties that raise substantial doubt about the Company’s ability to continue as a going concern. In the event that additional financial support is not received or operating profits are not generated, the carrying values of the Company’s assets may be adversely affected.
2.	BASIS OF PRESENTATION

Basis of presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). The interim condensed consolidated financial statements include the consolidated accounts of the Company and its wholly-owned subsidiaries with all significant intercompany transactions eliminated. In the opinion of management, all adjustments necessary for a fair statement of the consolidated financial position, results of operations and cash flows for the interim periods have been made. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with generally accepted accounting principles of the United States of America (“US GAAP”) have been condensed or omitted pursuant to such SEC rules and regulations. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2016 and with our Annual Report on Form 10-K filed with the SEC on March 16, 2017. Operating results for the three-month period ended March 31, 2017 may not necessarily be indicative of the results for the year ending December 31, 2017.

These unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, EMC Metals USA Inc., Wolfram Jack Mining Corp., and The Technology Store, Inc. Non-controlling interest represents the minority shareholders’ 20% proportionate share of the net assets and results of the Company’s majority-owned Australian subsidiary, EMC Metals Australia Pty Ltd., from the date the 20% interest was disposed by the Company (Note 9). All significant intercompany accounts and transactions have been eliminated on consolidation.

Use of estimates

The preparation of unaudited interim condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the deferred income tax asset valuations, asset impairment, stock-based compensation and loss contingencies. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between estimates and the actual results, future results of operations will be affected.

The Company considers itself to be an exploration stage company and will consider the transition to development stage after it receives a mining lease for its Nyngan Scandium project from the Mines Department of New South Wales, Australia, funding to begin mine construction, and board approval.

Fair value of financial assets and liabilities

The Company measures the fair value of financial assets and liabilities based on US GAAP guidance which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

The Company classifies financial assets and liabilities as held-for-trading, available-for-sale, held-to-maturity, loans and receivables or other financial liabilities depending on their nature. Financial assets and financial liabilities are recognized at fair value on their initial recognition, except for those arising from certain related party transactions which are accounted for at the transferor’s carrying amount or exchange amount.

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Scandium International Mining Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017

(Expressed in US Dollars) (Unaudited)

2.	BASIS OF PRESENTATION (cont’d…)
	Financial assets and liabilities classified as held-for-trading are measured at fair value, with gains and losses recognized in net income. Financial assets classified as held-to-maturity, loans and receivables, and financial liabilities other than those classified as held-for-trading are measured at amortized cost, using the effective interest method of amortization. Financial assets classified as available-for-sale are measured at fair value, with unrealized gains and losses being recognized as other comprehensive income until realized, or if an unrealized loss is considered other than temporary, the unrealized loss is recorded in income.
	Financial instruments, including receivables, accounts payable and accrued liabilities, and accounts payable with related parties are carried at amortized cost, which management believes approximates fair value due to the short-term nature of these instruments.
	The following table presents information about the assets that are measured at fair value on a recurring basis as at March 31, 2017, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and included situations where there is little, if any, market activity for the asset:

						Quoted Prices			Significant Other			Significant
			March 31,			in Active Markets			Observable Inputs			Unobservable Inputs
			2017			(Level 1)			(Level 2)			(Level 3)
	Assets:
	Cash	$	798,037		$	798,037		$	—		$	—
	Total	$	798,037		$	798,037		$	—		$	—

The carrying value of receivables, accounts payable and accrued liabilities, and accounts payable with related parties approximate their fair value due to their short-term nature.

The fair value of cash is determined through market, observable and corroborated sources.

Recently Adopted and Recently Issued Accounting Standards

Accounting Standards Update 2016-09 – Compensation—Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting. This accounting pronouncement, which goes into effect for annual periods beginning after December 16, 2016, addresses the simplification of several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company has reviewed this update and determined there was no impact on its financial statements.

Accounting Standards Update 2016-02 - Leases (Topic 842). This accounting pronouncement allows lessees to make an accounting policy election to not recognize a lease asset and liability for leases with a term of 12 months or less and do not have a purchase option that is expected to be exercised. This standard is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the impact this guidance will have on its financial statements.

Accounting Standards Update 2016-01 – Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This accounting pronouncement, which goes into effect for annual periods beginning after December 12, 2017, is far reaching and covers several presentation areas dealing with measurement, impairment, assumptions used in estimating fair value and several other areas. The Company is reviewing this update to determine the impact it may have on its financial statements.

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Scandium International Mining Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017

(Expressed in US Dollars) (Unaudited)

3.

EQUIPMENT

			December 31,			Additions
			2016 Net Book			(disposals)						March 31, 2017
			Value			(write-offs)			Amortization			Net Book Value
	Computer equipment	$	2,918		$	-		$	(275	)	$	2,643

			December 31,			Additions						December 31,
			2015 Net Book			(disposals)						2016 Net Book
			Value			(write-offs)			Amortization			Value
	Computer equipment	$	1,017		$	3,157		$	(1,256	)	$	2,918
	Office equipment		1,594			-			(1,594	)		-
		$	2,611		$	3,157		$	(2,850	)	$	2,918

4.	MINERAL PROPERTY INTERESTS

Title to mineral property interests involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the frequently ambiguous conveyancing history characteristic of many mineral property interests. The Company has investigated title to all of its mineral property interests and, to the best of its knowledge, title to all of its properties is in good standing.

SCANDIUM PROPERTIES

Nyngan, New South Wales Property

The Company holds a 80% interest in its Australian subsidiary which holds title to the Nyngan property (Note 9).

Royalties attached to the Nyngan property include, a 0.7% royalty on gross mineral sales on the property, a 1.5% Net Profits Interest royalty to private parties involved with the early exploration on the property, and a 1.7% Net Smelter Returns royalty payable to Jervois for 12 years after production commences, subject to terms in the settlement agreement. Another revenue royalty is payable to private interests of 0.2%, subject to a $370,000 cap. A NSW minerals royalty will also be levied on the project, subject to negotiation, currently 4% on revenue.

Honeybugle property, Australia

The Company holds a 80% interest in its Australian subsidiary which holds title to the Honeybugle properties (Note 9).

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Scandium International Mining Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017

(Expressed in US Dollars) (Unaudited)

4.	MINERAL PROPERTY INTERESTS (cont’d…)
	Tørdal and Evje-Iveland properties, Norway
	In December 2016, it was decided to write-off the Company’s interest, $238,670, in the Tordal property.
5.	RELATED PARTY TRANSACTIONS
	During the 3-month period ended March 31, 2017, the Company expensed $841,930 for stock-based compensation for stock options issued to Company directors. During the 3-month period ended March 31, 2016, the Company expensed $301,363 for stock-based compensation for stock options issued to Company directors.
	During the 3-month period ended March 31, 2017, the Company paid a consulting fee of $25,500 to one of its directors. During the 3-month period ended March 31, 2016, the Company paid a consulting fee of $25,500 to one of its directors.
	As at March 31, 2017, the Company owed $Nil to various directors and officers of the Company. (December 31, 2016 - $13,704)
6.	CAPITAL STOCK AND ADDITIONAL PAID IN CAPITAL
	On March 17, 2017, the Company issued 1,179,061 common shares at a value of C$0.29 per common share for total proceeds of C$341,928 ($261,375).
	Stock Options
	The Company established a stock option plan (the “Plan”) under which it is authorized to grant options to executive officers and directors, employees and consultants and the number of options granted under the Plan shall not exceed 15% of the shares outstanding. Under the Plan, the exercise period of the options may not exceed ten years from the date of grant and vesting is determined by the Board of Directors.
	Stock option transactions are summarized as follows:

			Stock Options
						Weighted average
			Number			exercise price in Canadian $
	Outstanding, December 31, 2015		17,610,000		$	0.12
	Granted		5,260,000			0.14
	Exercised		(1,050,000	)		0.24
	Outstanding, December 31, 2016		21,820,000			0.11
	Granted		5,100,000			0.37
	Exercised		(2,925,000	)		0.08
	Outstanding, March 31, 2017		23,995,000		$	0.17
	Number currently exercisable		22,436,000		$	0.16

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Scandium International Mining Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017

(Expressed in US Dollars) (Unaudited)

6.	CAPITAL STOCK AND ADDITIONAL PAID IN CAPITAL (cont’d…) As at March 31, 2017, incentive stock options were outstanding as follows:

			Number of			Number of			Exercise
			Options			Options			Price in			Expiry Date
			Outstanding			Exercisable			Canadian $
	Options
			4,300,000			4,300,000			0.100			November 5, 2020
			385,000			385,000			0.080			April 24, 2017**
			125,000			125,000			0.120			July 25, 2017***
			400,000			400,000			0.070			August 8, 2017
			1,000,000			1,000,000			0.100			May 9, 2018
			3,375,000			3,375,000			0.120			July 25, 2019
			200,000			200,000			0.100			December 30, 2019
			3,450,000			3,260,000			0.140			April 17, 2020
			400,000			400,000			0.115			August 28, 2020
			4,860,000			4,711,000			0.130			February 8, 2021
			400,000			160,000			0.200			June 14, 2021
			5,100,000			4,120,000			0.370			February 21, 2022
			23,995,000			22,436,000

** 260,000 of these options were exercised prior to April 24, 2017. The remaining 125,000 expired unexercised.
***50,000 of these options were exercised in April 2017.

As at March 31, 2017 the Company’s outstanding and exercisable stock options have an aggregate intrinsic value of $3,620,064 (December 31,2016 - $922,412).

Stock-based compensation

During the 3-month period ended March 31, 2017, the Company recognized stock-based compensation of $1,075,968 (March 31, 2016 - $395,813) in the statement of operations and comprehensive loss as a result of incentive stock options granted, vested and extended in the current period. There were 5,100,000 stock options issued during the 3-month period ended March 31, 2017 (March 31, 2016 – 4,860,000).

The weighted average fair value of the options granted in the quarter was C$0.37 (2016 - C$0.13) .

The fair value of all compensatory options granted is estimated on grant date using the Black-Scholes option pricing model. The weighted average assumptions used in calculating the fair values are as follows:

7.	TREASURY STOCK

			Number			Amount
	Treasury shares, March 31, 2017 and December 31 2016		1,033,333		$	1,264,194
			1,033,333		$	1,264,194

Treasury shares comprise shares of the Company which cannot be sold without the prior approval of the TSX.

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Scandium International Mining Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017

(Expressed in US Dollars) (Unaudited)

8.	SEGMENTED INFORMATION
	The Company’s mineral properties are located in Australia. The Company’s capital assets’ geographic information is as follows:

	March 31, 2017		Australia			United States			Total
	Equipment	$	-		$	2,643		$	2,643
	Mineral property interests		704,053			-			704,053
		$	704,053		$	2,643		$	706,696

	December 31, 2016		Australia			United States			Total
	Equipment	$	-		$	2,918		$	2,918
	Mineral property interests		704,053			-			704,053
		$	704,053		$	2,918		$	706,971

9.	EMC METALS AUSTRALIA PTY LTD
	On August 24, 2015, the Company’s $2,500,000 promissory note payable converted into a 20% ownership interest in EMC Metals Australia Pty Ltd (“EMC Australia”), with the Company holding an 80% ownership interest. EMC Australia holds the Company’s interests in the Nyngan Scandium Project and Honeybugle Scandium property. Upon conversion of the promissory note payable, EMC Australia is now operated as a joint venture between Scandium Investments LLC (“SIL”) and the Company. SIL holds a carried interest in the Nyngan Scandium Project and is not required to contribute cash for the operation of EMC Australia until the Company meets two development milestones: (1) filing a feasibility study on SEDAR, and (2) receiving a mining license on either joint venture property. As both of these two development milestones are now met, SIL has become fully participating as to their share of project costs.
	Completion of the development milestones by the Company, as described above, activates a second one-time, limited period option for SIL to elect to convert the fair market value of its 20% joint venture interest in the Nyngan Scandium Project and Honeybugle Scandium property into an equivalent value of the Company’s common shares, at then prevailing market prices, rather than continue with ownership at the project level. Conversion has not been elected as of May 9, 2017.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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, 2016 and March 31, 2017 and a comparison of the material changes in our results of operations and financial condition between the three-month period ended March 31, 2016 and the three-month period ended March 31, 2017. 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, 2016.

This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including, but not limited to, those set forth under the heading “Risk Factors and Uncertainties” in our Annual Report on Form 10-K for the year ended December 31, 2016, and elsewhere in this Quarterly Report on Form 10-Q.

The interim statements have been prepared in accordance with US Generally Accepted Accounting Principles, as required under U.S. federal securities laws applicable to the Company, and as permitted under applicable Canadian securities laws. The Company is a reporting company under applicable securities laws in Canada and the United States. The reporting currency used in our financial statements is the United States Dollar.

The information contained within this report is current as of May 9, 2017 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.

Technical information in this MD&A has been reviewed and approved by Willem Duyvesteyn, a Qualified Person as defined by Canadian National Instrument 43-101 (“NI 43-101”). Mr. Duyvesteyn is a director and consultant of Scandium International.

Cautionary Note to U.S. Investors Regarding Reserve and Resource Estimates

The Company uses Canadian Institute of Mining, Metallurgy and Petroleum definitions for the terms “proven reserves”, “probable reserves”, “measured resources” and “indicated resources”. U.S. investors are cautioned that while these terms are recognized and required by Canadian regulations, including National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”), the U.S. Securities and Exchange Commission (“SEC”) does not recognize them. Canadian mining disclosure standards differ from the requirements of the SEC under SEC Industry Guide 7, and reserve and resource information referenced in this Form 10-Q may not be comparable to similar information disclosed by companies reporting under U.S. standards. In particular, and without limiting the generality of the foregoing, the term “resource” does not equate to the term “reserve”. Under United States standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. The SEC’s disclosure standards normally do not permit the inclusion of information concerning “measured mineral resources” or “indicated mineral resources” or other descriptions of the amount of mineralization in mineral deposits that do not constitute “reserves” by U.S. standards in documents filed with the SEC. Disclosure of “contained ounces” in a resource estimate is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC standards as tonnage and grade without reference to unit measures. The requirements of NI 43-101 for identification of “reserves” are also not the same as those of the SEC, and reserves in compliance with NI 43-101 may not qualify as “reserves” under SEC standards.

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Cautionary Note Regarding Forward-Looking Statements

Certain statements made in this Quarterly Report on Form 10-Q may constitute forward-looking statements about the Company and its business. Forward looking statements are statements that are not historical facts and include, but are not limited to, reserve and resource estimates, estimated value of the project, projected investment returns, anticipated mining and processing methods for the project, the estimated economics of the project, anticipated Scandium recoveries, production rates, Scandium grades, estimated capital costs, operating cash costs and total production costs, planned additional processing work and environmental permitting. The forward-looking statements in this report are subject to various risks, uncertainties and other factors that could cause the Company's actual results or achievements to differ materially from those expressed in or implied by forward looking statements. These risks, uncertainties and other factors include, without limitation, risks related to uncertainty in the demand for Scandium and pricing assumptions; uncertainties related to raising sufficient financing to fund the Nyngan Scandium Project in a timely manner and on acceptable terms; changes in planned work resulting from logistical, technical or other factors; the possibility that results of work will not fulfill expectations and realize the perceived potential of the Company's properties; uncertainties involved in the estimation of Scandium reserves and resources; the possibility that required permits may not be obtained on a timely manner or at all; the possibility that capital and operating costs may be higher than currently estimated and may preclude commercial development or render operations uneconomic; the possibility that the estimated recovery rates may not be achieved; risk of accidents, equipment breakdowns and labor disputes or other unanticipated difficulties or interruptions; the possibility of cost overruns or unanticipated expenses in the work program; risks related to projected project economics, recovery rates, and estimated NPV and anticipated IRR and other factors identified in the Company's SEC filings and its filings with Canadian securities regulatory authorities. Forward-looking statements are based on the beliefs, opinions and expectations of the Company's management at the time they are made, and other than as required by applicable securities laws, the Company does not assume any obligation to update its forward-looking statements if those beliefs, opinions or expectations, or other circumstances, should change.

Scandium International Corporate Overview

Scandium International is a specialty metals and alloys company focused on developing the production and sales of scandium and other specialty metals. The Company intends to utilize its knowhow and, in certain instances, patented technologies to maximize opportunities in scandium and other specialty metals.

The Company was formed in 2006, under the name Golden Predator Mines Inc. As part of a reorganization and spin-out of the Company’s precious metals portfolio in March 2009, the Company changed its name to EMC Metals Corp. In order to reflect our emphasis on mining for scandium minerals, effective November 19, 2014, we changed our name to Scandium International Mining Corp. The Company currently trades on the Toronto Stock Exchange under the symbol “SCY”.

Our focus of operations is the exploration and development of the Nyngan scandium deposit located in New South Wales (“NSW”), Australia (“Nyngan” or the “Nyngan Scandium Project”). We also hold an exploration stage property in Australia, known as the “Honeybugle scandium property”.

We acquired a 100% interest in the Nyngan Scandium Project in June of 2014 pursuant to the terms of a settlement agreement with Jervois Mining Ltd. of Melbourne, Australia. The project is held through our Australian subsidiary, EMC Metals Australia Pty Ltd. (“EMC Australia”), which also holds the Honeybugle scandium property.

During Q3 of 2015, the Company converted a $2,500,000 loan from Scandium Investments LLC (“SIL”), an unrelated investment company, into a 20% minority interest in EMC Australia. As a result, the Company currently holds an 80% equity interest in its Australian subsidiary, with SIL holding a 20% interest. EMC Australia is operated as a joint venture between SIL and SCY with SIL holding a carried interest in the Nyngan Scandium Project until the Company meets two development milestones: (1) filing a feasibility study on SEDAR (the report was filed on May 6, 2016), and (2) receiving a Mining lease on either joint venture property). As both of these two development milestones are now met, SIL becomes fully participating as to their share of project cost.

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Completion of the development milestones by the Company, as described above, has triggered a limited period option whereby SIL can elect to convert the fair market value of its 20% interest in EMC Australia into an equivalent value of SCY common shares, at then prevailing market prices. Conversion has not been elected as of May 9, 2017.

During the first quarter of 2017, we focused on Nyngan Scandium Project activities including scandium marketing arrangements and application for a mining lease with NSW Mines Department.

Principal Properties Review

Nyngan Scandium Project (NSW, Australia)

Nyngan Property Description and Location

The Nyngan Scandium Project site is located approximately 450 kilometers northwest of Sydney, NSW, Australia and approximately 20 kilometres due west of the town of Nyngan, a rural town of approximately 2900 people. The general area can be characterized as flat countryside and is classified as agricultural land, used predominantly for wheat farming and livestock grazing.

The specific location of the exploration licenses that we may earn an interest in are provided in Figure 2 below.

Figure 1: Location of Nyngan Project

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Figure 2: Location of the Exploration Licenses

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Nyngan Feasibility Study

On April 18, 2016 the Company announced the results of an independently prepared feasibility study on the Nyngan Scandium Project. The technical report on the feasibility study entitled “Feasibility Study – Nyngan Scandium Project, Bogan Shire, NSW, Australia” is dated May 4, 2016 and was independently compiled pursuant to the requirements of NI 43-101 (the “Feasibility Study”). The report was filed on May 6, 2016 and is available on SEDAR (www.sedar.com) and on the Company’s website (www.scandiummining.com) and the SEC’s website (www.sec.gov). A full discussion on the technical report was provided in the Company’s Form 10Q for the quarterly period ending March 31, 2016, as filed with the SEC and on SEDAR on May 13, 2016.

The Feasibility Study concluded that the Nyngan Scandium Project has the potential to produce an average of 37,690 kilograms of scandium oxide (scandia) per year, at grades of 98.0% -99.8%, generating an after tax cumulative cash flow over a 20 year Project life of US$629 million, with an ^NPV10% ^of US$177 million. The average process plant feed grade over the 20 year Project life is 409ppm of scandium.

The financial results of the Feasibility Study are based on a conventional flow sheet, employing continuous high pressure acid leach (HPAL) and solvent extraction (SX) techniques. The flow sheet was modeled and validated from METSIM modeling and considerable bench scale/pilot scale metallurgical test work utilising Nyngan resource material. A number of the key elements of this flowsheet work have been protected by the Company under US Patent Applications.

The Feasibility Study has been developed and compiled to an accuracy level of +15%/-5%, by a globally recognized engineering firm that has considerable expertise in laterite deposits and process facilities, as well as in smaller mining and processing projects, and has excellent familiarity with the Nyngan Scandium Project location and environment.

Nyngan Scandium Project Highlights

• Capital cost estimate for the Project is US$87.1 million,
• Annual scandium oxide product volume averages 37,690 kg per year, over 20 years,
• Annual revenue of US$75.4 million (oxide price assumption of US$2,000/kg),
• Operating cost estimate for the Project is US$557/kg scandium oxide,
• Project Constant Dollar NPV10% is US$177 million, (NPV8% is US$225 million),
• Project Constant Dollar IRR is 33.1%,
• Oxide product grades of 98-99.8%, as based on customer requirements,
• Project resource increases by 40% to 16.9 million tonnes, grading 235ppm Sc, at a 100ppm cut- off in the measured and indicated categories, and
• Project Reserve totalling 1.43 million tonnes, grading 409ppm Sc was established on part of the resource.

DFS Conclusions and Recommendations

The production assumptions in the Feasibility Study are backed by solid independent flow sheet test work on the planned process for scandium recovery. The Feasibility Study consolidates a significant amount of metallurgical test work and prior study on the Nyngan Scandium Project, including important test work results completed since the PEA was generated in 2014. The entire body of work demonstrates a viable, conventional process flow sheet utilizing a continuous-system HPAL leaching process, and good metallurgical recoveries of scandium from the resource. The metallurgical assumptions are supported by various bench and pilot scale independent test work programs that are consistent with known outcomes in other laterite resources. The continuous autoclave configuration, as opposed to batch systems explored in previous flow sheets, is also a more conventional and current design choice.

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The level of accuracy established in the Feasibility Study substantially reduces the uncertainty levels inherent in earlier studies, specifically the PEA. The greater confidence intervals around the Feasibility Study were achieved by reliance on significant project engineering work, a capital and operating cost estimate supported by detailed requirements and vendor pricing, plus one offtake agreement and an independent marketing assessment, both supportive of the marketing assumptions on the business.

The Feasibility Study delivered a positive result on the Nyngan Scandium Project, and recommends the Nyngan Scandium Project owners seek finance and proceed to construction. Recommendations were made therein for additional immediate work, notably to win additional offtake agreements with customers, complete some optimizing flow sheet studies, and to initiate as early as possible detailed engineering required on certain long-lead capital items.

Confirmatory Metallurgical Test Results

On June 29, 2016 we announced the results of a confirmatory metallurgical test work report from Altrius Engineering Services (AES) of Brisbane, Australia. The test work results directly relate to the list of recommended programs included in the Feasibility Study. AES devised and supervised these test work programs at the SGS laboratory in Perth, Australia and at the Nagrom laboratory in Brisbane, Australia.

The project DFS recommended a number of process flowsheet test work programs be investigated prior to commencing detailed engineering and construction. Those study areas included pressure leach (“HPAL”), counter-current decant circuits, solvent extraction (“SX”), and oxalate precipitation, with specific work steps suggested in each area. This latest test work program addresses all of these recommended areas, and the results confirm recoveries and efficiencies that either meet or exceed the parameters used in the DFS. Highlights of the testing are:

• Pressure leach test work achieved 88% recoveries, from larger volume tests,
• Settling characteristics of leach discharge slurry show substantial improvement,
• Residue neutralization work meets or exceeds all environmental requirements as presented in the DFS and the environmental impact statement,
• Solvent extraction circuit optimization tests generated improved performance, exceeding 99% recovery in single pass systems, and
• Product finish circuits produced 99.8% scandium oxide, completing the recovery process from Nyngan ore to finished scandia product.

Environmental Permitting/Development Consent/Mining Lease

On May 2, 2016, the Company announced the filing of an Environmental Impact Statement (“EIS”) with the New South Wales, Australia, Department of Planning and Environment, (the “Department”) in support of the planned development of the Nyngan Scandium Project. The EIS was prepared by R.W. Corkery & Co. Pty. Limited, on behalf of the Company’s 80% owned subsidiary, EMC Australia, to support an application for Development Consent for the Nyngan Scandium Project. The EIS is a complete document, including a Specialist Consultants Study Compendium, and was submitted to the Department on Friday, April 29, 2016.

EIS Highlights:

• The EIS finds residual environmental impacts represent negligible risk.
• The proposed development design achieves sustainable environmental outcomes.
• The EIS finds net-positive social and economic outcomes for the community.
• Nine independent environmental consulting groups conducted analysis over five years, and contributed report findings to the EIS.
• The Nyngan Project development is estimated to contribute A$12.4M to the local and regional economies, and A$39M to the State and Federal economies, annually

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• The EIS is fully aligned with the DFS and with a NSW Mining License Application for the Nyngan Project.

Conclusion statement in the EIS:

“In light of the conclusions included throughout this Environmental Impact Statement, it is assessed that the Proposal could be constructed and operated in a manner that would satisfy all relevant statutory goals and criteria, environmental objectives and reasonable community expectations.”

EIS Discussion:

The EIS is the foundation document submitted by a developer intending to build a mine facility in Australia. The Nyngan Scandium Project is considered a State Significant Project, in that capital cost exceeds A$30 million, which means State agencies are designated to manage the investigation and approval process for granting a Development Consent, from the Minister of Planning and Environment. This Department will manage the review of the Proposal through a number of State and local governmental agencies.

The EIS is a self-contained set of documents used to seek a Development Consent. It is however, supported in many ways by the recently completed feasibility study.

On November 10, 2016 the Company announced that the Development Consent had been granted. This Development Consent represents an approval to develop the Nyngan Scandium Project and is based on the EIS. The Development Consent follows an in-depth review of the EIS, the project plan, community impact studies, public EIS exhibition and commentary, and economic viability, and involved more than 12 specialized governmental agencies and groups.

On May 5, 2017 the Company announced that EMC Metals Australia had been granted a Mining Lease. The Mining Lease (“ML”) overlays select areas previously covered by two Exploration Licenses. The ML was granted by the NSW Minister for Resource and Development on May 3, 2017, and represents the final major development approval required from the NSW Government to begin construction on the project. The ML is awarded after all environmental work has been completed and reviewed, all social implications of project development have been considered, and the NSW Environmental Minister has issued a Development Consent, received in November 2016. The ML grant reflects the further review that the State resource value has been considered and approved for extraction based on mine development plans. The ML is issued for a period of 21 years, and is based on the development plans and intent submitted in the ML Application. The ML can be modified by NSW regulatory agencies, as requested by EMC Australia over time, to reflect changing operating conditions.

In addition to these two key governmental approvals, other required licenses and permits must be aquired but are considered routine and require only compliance with fixed standards and objective measurements. These remaining key license approvals are:

• An Environment Protection License,
• Water Supply Works and Use Approval and Water Access License,
• A Section 138 Permit issued by the Bogan Shire Council, for construction of the intersection of the Site Access Road and Gilgai Road,
• An approval from the NSW Dams Safety Committee for the design and construction of the Residue Storage Facility, and
• A high voltage connection agreement with Essential Energy.

The Company intends to continue to follow and support the progress of governmental agency reviews.

ALCERECO MOU and Offtake Agreements

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On March 30, 2015, the Company announced that it had signed a memorandum of understanding (“ALCERECO MOU”) with ALCERECO Inc. of Kingston, Ontario (ALCERECO”), forming a strategic alliance to develop markets and applications for aluminum alloys containing scandium. To further that alliance, and to reinforce the capability of both companies to deliver product developed for Sc-Al alloy markets, Scandium International and ALCERECO also signed an offtake agreement governing sales terms of scandium oxide product (scandia) produced from the Nyngan Scandium Project. The offtake agreement specifies prices, delivery volumes and timeframes for commencement of delivery of scandium oxide product.

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 where aluminum alloys are used today, and in some cases where they cannot be used today.

• The ALCERECO MOU covers areas of joint cooperation and development of aluminum alloys that contain and are enhanced by the addition of scandium,
• The ALCERECO MOU recognizes the specialized capabilities ALCERECO holds for the design, manufacture, and testing of Sc-Al alloy materials,
• The offtake agreement outlines standard sale terms on 7,500 kg of scandia per annum, for a term of three years, which can be extended, and
• The offtake agreement contains both fixed and variable pricing components, which are subject to confidentiality.

ALCERECO is an advanced materials development company that provides services and specialty processing capabilities to companies innovating in a diverse range of markets, including aerospace, automotive, electronics and consumer/sporting goods. ALCERECO staff work with a range of materials and processes and have the tools and knowledge to take on leading-edge projects such as development of aluminum-scandium alloys, specialty ceramics, composites and graphene enhanced materials. The company has a particular focus on lightweight materials capable of delivering greater strength, functionality and exceptional performance.

ALCERECO operates out of the Grafoid Global Technology Centre in Kingston, Ontario that was originally founded by Alcan Aluminum in the 1940s. ALCERECO is a Canadian private company, and a wholly-owned subsidiary of Ottawa-based Grafoid Inc., a graphene application development company.

Nyngan Scandium Project - Planned Activities for 2017-2018

The following steps are planned for Nyngan during the 2017 and 2018 Calendar years:

• Obtain a Mining Lease pertaining to the Nyngan Scandium Project with NSW Department of Trade and industry (the ML was granted on May 3, 2017),
• Pursue additional offtake agreements in support of planned future scandium sales,
• Extend the start date on the ALCERECO offtake agreement, to correspond to delays in the original start date for Nyngan Project scandium oxide production,
• Seek project financing to fund the construction of the Nyngan Scandium Project for drawdown after the granting of a Mining Lease from NSW for the mine development,
• Commence site construction during in late 2017, with anticipated construction completion over 18 months, and
• Initiate project commissioning in Q4 2018, product production in Q1 2019, and with product available for sale by the end of Q1 2019.

Other Properties Review

Honeybugle Scandium Property (NSW, Australia)

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On April 2, 2014, the Company announced that it had secured a 100% interest in an exploration license (EL 7977) covering 34.7 square kilometers in New South Wales, Australia. The license area, we call the Honeybugle scandium exploration property, is located approximately 24 kilometers west-southwest from the Company’s Nyngan Scandium Project and approximately 36 kilometers southwest from the town of Nyngan, NSW.

Exploration rights for the Honeybugle property include certain minimum expenditure requirements. The Company intends to fulfill those minimum expenditure requirements.

Honeybugle Drill Results

On May 7, 2014, the Company announced completion of an initial program of 30 air core (“AC”) drill holes on the property, specifically at the Seaford anomaly, targeting scandium (Sc). Results on 13 of these holes are shown in detail, in the table below. These holes suggest the potential for scandium mineralization on the property similar to Nyngan.

	º	Highlights of initial drilling program results include the following: The highest 3-meter intercept graded 572 ppm scandium (hole EHAC 11),
	º	EHAC 11 also generated two additional high grade scandium intercepts, grading 510 ppm and 415 ppm, each over 3 meters,
	º	The program identified a 13-hole cluster which was of particular interest; intercepts on these 13 holes averaged 270 ppm scandium over a total 273 meters, at an average continuous thickness of 21 meters per hole, representing a total of 57% (354 meters) of total initial program drilling,
	º	The 13 holes produced 29 individual (3-meter) intercepts over 300 ppm, representing 31% of the mineralized intercepts in the 273 meters of interest, and
	º	This initial 30-hole AC exploratory drill program generated a total of 620 meters of scandium drill/assay results, over approximately 1 square kilometer on the property.

Other Developments – First Quarter 2017

Weston Master Alloy MOU: On March 2, 2017 we announced the signing of a Memorandum of Understanding (“Weston MOU”) with Weston Aluminium Pty Ltd ("Weston") of Chatswood, NSW, Australia. The Weston 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 Weston MOU outlines steps to jointly establish the manufacturing parameters, metallurgical processes, and capital requirements to convert Nyngan Scandium Project scandium product into Master Alloy, on Weston's existing production site in NSW. The Weston 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

Stock Option Grants: On February 21, 2017, the Company granted a total of 5,100,000 stock options at an exercise price of C$0.37 per share, exercisable until February 21, 2022, to directors, officers, employees and consultants of the Company.

Private Placements: On March 17, 2017, the Company completed a private placement of 1,179,061 common shares to three individuals for total gross proceeds of C$341,928. No broker fees were paid in connection with the private placement.

Nyngan Mining Lease: On May 5, 2017 the Company announced that EMC Metals Australia had been granted a Mining Lease for the Nyngan Scandium Project. For additional details see Item 2. Principal Properties Review - Nyngan Scandium Project (NSW, Australia) - Environmental Permitting/Development Consent/Mining Lease.

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Operating results - Revenues and Expenses

The Company’s results reflect higher operating costs due to the increase in stock-based compensation (a non-cash expense). Excluding non-cash costs, expenditures were down $501,013 due to the cessation of costs incurred in developing the definitive feasibility study which was completed in early Q2 2016.

Summary of quarterly results

A summary of the Company’s quarterly results are shown below at Table 10.

Table 10. Quarterly Results Summary

Results of Operations for the three months ended March 31, 2017

The net loss for the quarter was $1,327,766, an increase of $246,670 from $1,081,096 in the same quarter of the prior year. Details of the individual items contributing to the increased net loss are set out below at Table 11:

Table 11. Variance Analysis for Net Loss

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Cash flow discussion for the three-month period ended March 31, 2017 compared to March 31, 2016

The cash outflow for operating activities was $249,163, a decrease of $665,625 (March 31, 2016 – $914,788), due to lower activity levels as described in the variance analysis in addition to a decrease in accounts payable during the period.

Cash outflows for investing activities were $3,157 lower due to the purchase of computer equipment in Q1 2016 (March 31, 2017 - $Nil) (March 31, 2016 – $3,157).

Cash inflows from financing activities reflect the exercise of stock options as well as private placement resulting in an increase of $431,966 when compared to Q1 2016 (March 31, 2015 – (Nil).

Financial Position

Cash

The Company’s cash position increased during the three-month period by $182,803 to $798,037 (December 31, 2016 - $615,234) due to a private placement and the exercise of Company stock options.

Prepaid expenses and receivables

Prepaid expenses and accounts receivable decreased by $15,216 to $36,011 due to value added tax in Australia that was paid in Q1 2017 (December 31, 2016 - $51,227).

Property and equipment

Property and equipment consist of computer equipment at the Sparks, Nevada office. The decrease of $275 to $2,643 (December 2016 - $2,918) is due to amortization of that computer equipment in the quarter.

Mineral interests

Mineral interests remained the same at $704,053.

Accounts payable, accrued liabilities and accounts payable with related parties

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Accounts payable has decreased by $2,338 to $39,015 (December 2016 – $41,353) due to the normal business activities.

Capital Stock

Capital stock increased by $624,154 to $91,766,489 due to a private placement incurring in the quarter and the exercise of Company stock options (December 31, 2016 -$91,142,335).

Additional paid-in capital increased by $884,257, to $7,728,451 (December 31, 2016 - $6,844,671) as a result of expensing of stock options which was partially offset by the exercise of stock options.

Liquidity and Capital Resources

At March 31, 2017, the Company had a working capital of $795,033 including cash of $798,037 as compared to a working capital of $625,108 including cash of $615,234 at December 31, 2016.

At March 31, 2017, the Company had a total of 22,436,000 stock options exercisable between CAD$0.07 and CAD$0.37 that have the potential upon exercise to generate a total of C$3,700,030 in cash over the next five years. There is no assurance that these securities will be exercised. 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 cutting measures to conserve cash to meet its operational obligations.

Outstanding share data

At the date of this report, the Company has 229,486,261 issued and outstanding common shares and 23,535,000 stock options currently outstanding at a weighted average exercise price of CAD$0.17.

Off-balance sheet arrangements

At March 31, 2017, 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.

Transactions with related parties

During the 3-month period ended March 31, 2017, the Company expensed $841,930 for stock-based compensation for stock options issued to Company directors. During the 3-month period ended March 31, 2016, the Company expensed $301,363 for stock-based compensation for stock options issued to Company directors.

During the 3-month period ended March 31, 2017, the Company paid a consulting fee of $25,500 for one of its directors. During the 3-month period ended March 31, 2016, the Company paid a consulting fee of $25,500 for one of its directors.

As at March 31, 2017, the Company owed $Nil to various directors and officers of the Company. (December 31, 2016 - $13,704)

Proposed Transactions

There are no proposed transactions outstanding other than as disclosed.

Critical Accounting Estimates

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The preparation of financial statements in conformity with generally accepted accounting policies requires management of the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on past experience, industry trends and known commitments and events. By their nature, these estimates are subject to measurement uncertainty and the effects on the financial statements of changes in such estimates in future periods could be significant. Actual results will likely differ from those estimates.

Stock-based compensation

The Company uses the Black-Scholes option pricing model to calculate the fair value of stock options and compensatory warrants granted. This model is subject to various assumptions. The assumptions the Company makes will likely change from time to time. At the time the fair value is determined; the methodology the Company uses is based on historical information, as well as anticipated future events. The assumptions with the greatest impact on fair value are those for estimated stock volatility and for the expected life of the instrument.

Future income taxes

The Company accounts for tax consequences of the differences in the carrying amounts of assets and liabilities and their tax bases using tax rates expected to apply when these temporary differences are expected to be settled. When the future realization of income tax assets does not meet the test of being more likely than not to occur, a valuation allowance in the amount of the potential future benefit is taken and no future income tax asset is recognized. The Company has taken a valuation allowance against all such potential tax assets.

Mineral properties and exploration and development costs

The Company capitalizes the costs of acquiring mineral rights at the date of acquisition. After acquisition, various factors can affect the recoverability of the capitalized costs. The Company’s recoverability evaluation of our mineral properties and equipment is based on market conditions for minerals, underlying mineral resources associated with the assets and future costs that may be required for ultimate realization through mining operations or by sale. The Company is in an industry that is exposed to a number of risks and uncertainties, including exploration risk, development risk, commodity price risk, operating risk, ownership and political risk, funding and currency risk, as well as environmental risk. Bearing these risks in mind, the Company has assumed recent world commodity prices will be achievable. The Company has considered the mineral resource reports by independent engineers on the Nyngan Scandium Project in considering the recoverability of the carrying costs of the mineral properties. All of these assumptions are potentially subject to change, out of our control, however such changes are not determinable. Accordingly, there is always the potential for a material adjustment to the value assigned to mineral properties and equipment.

Recent Accounting Pronouncements

Accounting Standards Update 2016-09 – Compensation—Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting. This accounting pronouncement, which goes into effect for annual periods beginning after December 16, 2016, addresses the simplification of several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company is reviewing this update to determine the impact it will have on its financial statements.

Accounting Standards Update 2016-02 - Leases (Topic 842). This accounting pronouncement allows lessees to make an accounting policy election to not recognize a lease asset and liability for leases with a term of 12 months or less and do not have a purchase option that is expected to be exercised. This standard is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the impact this guidance will have on its financial statements.

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Accounting Standards Update 2016-01 – Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This accounting pronouncement, which goes into effect for annual periods beginning after December 12, 2017, is far reaching and covers several presentation areas dealing with measurement, impairment, assumptions used in estimating fair value and several other areas. The Company is reviewing this update to determine the impact it may have on its financial statements.

Financial instruments and other risks

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, one in Vancouver, British Columbia, Canada, one in Mackay, Queensland, Australia and in one in Chicago, Illinois.

Information Regarding Forward-Looking Statements

This Management’s Discussion and Analysis of Financial Condition and Results of Operations contain certain forward-looking statements. Forward-looking statements include but are not limited to those with respect to the prices of metals, the estimation of mineral resources and reserves, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of new deposits, success of exploration activities, permitting time lines, currency fluctuations, requirements for additional capital, Government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage and the timing and possible outcome of pending litigation. In certain cases, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes” or variations of such words and phrases, or statements that certain actions, events or results “may”, “could”, “would”, or “will” be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Scandium International to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the actual results of current exploration activities, conclusions or economic evaluations, changes in project parameters as plans continue to be refined, possible variations in grade and or recovery rates, failure of plant, equipment or processes to operate as anticipated, accidents, labor disputes or other risks of the mining industry, delays in obtaining government approvals or financing or incompletion of development or construction activities, risks relating to the integration of acquisitions, to international operations, and to the prices of metals. While Scandium International has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Scandium International expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4. Controls and Procedures

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Disclosure controls and procedures

The Company’s management is responsible for establishing and maintaining adequate disclosure controls and procedures. The Company’s management, including our principal executive officer and our principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the period covered by this report. Based on that evaluation, the principal executive officer and principal financial officer concluded that as of the end of the period covered by this report, the Company has maintained effective disclosure controls and procedures in all material respects, including those necessary to ensure that information required to be disclosed in reports filed or submitted with the SEC (i) is recorded, processed, and reported within the time periods specified by the SEC, and (ii) is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate to allow for timely decision regarding required disclosure.

Changes in Internal Control

There have been no changes in internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

On March 17, 2017, the Company completed a private placement of 1,179,061 shares of common stock at a price of C$0.29 per share for total proceeds of C$341,928. The securities were sold to two accredited investors pursuant to Rule 506 of Regulation D and to a non-US person pursuant to Regulation S under the United States Securities Act of 1933, as amended.

The proceeds from this financing will be used for general working capital.

Item 6. Exhibits

31.1	Certification of the Principal Executive Officer, pursuant to Rule 13a-14(a) or 15d-14(a) of the U.S. Securities Exchange Act of 1934 (filed herewith)
31.2	Certification of the Principal Financial Officer, pursuant to Rule 13a-14(a) or 15d-14(a) of the U.S. Securities Exchange Act of 1934 (filed herewith)
32.1	Section 1350 Certification of the Principal Executive Officer (filed herewith)
32.2	Section 1350 Certification of the Principal Financial Officer (filed herewith)
101	Financial Statements from the Quarterly Report on Form 10-Q of the Company for the three months ended March 31, 2017, formatted in XBRL (filed herewith)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: May 12, 2017

	SCANDIUM INTERNATIONAL MINING CORP.
	(Registrant)
	By:	/s/ George Putnam
		George Putnam
		Principal Executive Officer
	By:	/s/ Edward Dickinson
		Edward Dickinson
		Principal Financial Officer

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