A leading cobalt company with significant nickel and copper exposure, with strong development stage assets, growth opportunities and exploration projects.
Jervois Mining (ASX: JRV) (TSX-V: JRV) (OTC: JRVMF) is focused on becoming a global supplier in the emerging battery metals market.
Jervois acquired Freeport Cobalt (renamed Jervois Finland) in 2021. Jervois Finland is a Kokkola, Finland-based cobalt refining and specialty products business and consists of:
- a long-term refining capacity agreement with Umicore for the cobalt refinery in Kokkola, Finland (operated by Umicore) under which Jervois Finland has contractual rights to toll refine cobalt;
- long-term contracts with leading global suppliers of cobalt hydroxide, consistent with commitment to best practice responsible sourcing framework; and
- a downstream cobalt products manufacturing facility with an established marketing platform and long-term global customer base servicing clients primarily across Europe, the United States and Japan.
Jervois acquired the Idaho Cobalt Operations (“ICO”) in 2019. ICO comprises the largest National Instrument (“NI”) 43-101 compliant cobalt Mineral Resource Estimate in the United States. Jervois is finalizing construction of ICO, which is on track to commence commercial production by the end of 2022.
Jervois completed its acquisition of the São Miguel Paulista (“SMP”) nickel and cobalt refinery (“SMP Refinery”) in São Paulo, Brazil from Companhia Brasileira de Alumíno (“CBA”) in July 2022. SMP Refinery had annual refined production capacity of 25,000 metric tonnes of nickel and 2,000 metric tonnes of cobalt. Jervois has completed a Bankable Feasibility Study (BFS) for a Stage 1 restart at SMP, with forecast production of 10,000mpta and 2,000mpta of refined nickel and cobalt metal respectively. Jervois expects achieve first commercial production from the Stage 1 restart at SMP in 2023.
Sao Miguel Paulista Refinery
Jervois acquired 100% of the São Miguel Paulista nickel and cobalt refinery (“SMP Refinery”) in São Paulo, Brazil from Companhia Brasileira de Alumínio (“CBA”) (an investee company of Votorantim) as part of its goal to become a vertically integrated producer, capable of supplying refined nickel and cobalt products to customers across a range of industries including specialty stainless steels, nickel and cobalt superalloys, cathode precursor, lithium ion battery and electric vehicles manufacturers.
In April 2022, Jervois completed a Bankable Feasibility Study (BFS) for a Stage 1 restart at SMP, with forecast production of 10,000 metric tonnes per annum and 2,000mpta of refined nickel and cobalt metal respectively. A Stage 2 BFS regarding return to full 25,000mpta refined nickel production capacity is due for release by the end of 2022.
Restarting the only electrolytic nickel-cobalt refinery in South and Latin America will deliver significant local and regional economic and social benefits to the São Miguel Paulista area.
First commercial production from SMP’s Stage 1 restart is expected in 2023.
Idaho Cobalt Operations
Since acquiring the Idaho Cobalt Operations (“ICO”) in Idaho, USA, in mid-2019, Jervois has increased confidence in its ability to successfully bring the site into commercial production. In September 2020, Jervois completed an updated Bankable Feasibility Study (the “BFS”) for ICO.
Jervois’ technical quality, rigour and conservatism applied in the BFS confirmed the uniqueness of ICO in its ability to become the only source of domestic cobalt supply in the USA. The BFS confirmed the potential of ICO to establish a near-term, low-cost cobalt-copper-gold mine, with significant opportunity to increase the mineral resource and extend mine reserves once mining commences.
Key technical outputs from the BFS are summarised in Table 1 below:
|Assumed operating life||20 years||NPV (@ 8% real post-tax)||US$141 million|
|Capital cost||US$54.8 million||IRR (nominal post-tax)||35%|
|Nickel price1||US$8.00/lb||EBITDA3,4||US$33 million per annnum|
|Cobalt price2||US$25.00/lb||Payback (post-tax)||3.3 years|
|MHP payability||75% CIF Santos||Production rate||10,000 mtpa Nickel metal|
|2,00 mtpa Cobalt metal|
|Brazilian real: US dollar||5.30||10,740 mtpa Ammonium Sulphate|
- LME Cash in real 2022 dollars.
- Fastmarkets Metal Bulletin (”MB”) Standard Grade (“SG”) in real 2022 dollars.
- Average life of operations, in real 2022 dollars.
- EBITDA is a non-IRFS measure but is commonly used in evaluating financial performance. While the common definition of EBITDA is “Earnings Before Interest Expense, Taxes, Depreciation and Amortization”, EBITDA used in this news release may not be comparable to EBITDA presented by other companies.
Jervois approved the final construction of ICO in July 2021 following completion of a US$100 million bond offering, which Jervois is using to pay capital expenditures, operating costs and other costs associated with the construction of ICO and bringing it into production. First production is expected in August 2022, and Jervois expects to achieve commercial production by the end of CY2022.
ICO will create approximately 200 local construction jobs and 180 operational positions once the site transitions into commercial operation.
ICO Environmental Social Governance
At ICO, Jervois will apply best-in-class environmental and safety standards, systems, and techniques in the production of cobalt in Idaho as part of its overarching environmental, social and governance (“ESG”) policies. Key activities related to both the regulatory requirements at ICO as well as voluntary activities form the basis of our aim to be a positive contributor to the local and regional communities, businesses and environments.
Jervois is working with the Idaho Conservation League to develop the Upper Salmon Conservation Action Program (“Program”) to protect and restore fish, water quality, wildlife habitat, and biodiversity within the Upper Salmon River basin. This innovative and voluntary partnership, formalised in February 2021, will fund projects to protect and enhance this ecologically important region of Idaho. Jervois Mining USA Limited will contribute US$150,000 per year into a dedicated fund through the operational life of the ICO mine. The Program is separate from and unrelated to the mitigation measures and other regulatory requirements applicable to ICO. The Program will also include an ongoing dialogue with communities in the area, including the Shoshone-Bannock and Nez Perce Tribes, as well and local, state, and federal agencies, about investment priorities for the Program.
During the COVID-19 pandemic, Jervois provided a cash donation to the Idaho Foodbank’s Backpack program. This program ensures that students who are chronically hungry have access to adequate food by providing food caches all over town, full of nutritious, kid-friendly food.
ICO power will be provided by Idaho Power, an Idaho corporation. In 2019 (last published data), 64.1% of Idaho Power’s energy mix came from renewables (including hydro) and 11.4% from natural gas. The utility has plans to further increase the share of renewables and eliminate coal-fired energy. Idaho Power has set a goal to be 100 percent clean energy by 2045 and offers additional green-energy solutions for more renewable, carbon-free electricity. ICO continues to discuss future opportunities with Idaho Power that may allow ICO to take advantage of Idaho Power’s innovative approach toward clean energy; continuing to reduce ICO’s already industry leading carbon footprint.