In September 2020, Jervois announced completion of an updated Bankable Feasibility Study (the “BFS”) for ICO in the United States. Since acquiring ICO in mid-2019, Jervois has increased confidence in its ability to successfully bring the site into commercial production.
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 United States.
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. Jervois’ January 2020 updated Mineral Resource Estimate was integrated into a revised mine plan and mining reserve, together with design of the metallurgical plant and final infrastructure requirements.
Key drivers for development of ICO was Jervois’ recognition that incorporating flexibility in design to enable a final investment decision to be undertaken on either bulk or separated cobalt and copper concentrates, together with potential concentrate roasting or calcination, had the greatest potential to enhance off-take negotiations and underpin an economically optimised operation.
The BFS is based upon design of a concentrator producing a cobalt-copper bulk concentrate with gold credits. Jervois also completed engineering design and costing, flowsheets to produce separated cobalt and copper concentrates, and calcined (roasted) cobalt concentrate as part of the preparation of the BFS. It has received off-take offers from potential customers for a variety of products to support economic trade-offs between flowsheet alternatives. With the recently announced acquisition of the SMP Refinery, Jervois is moving ahead with construction of a flowsheet based on separated concentrates, with the cobalt concentrate (containing gold) to be refined in Brazil, and the copper concentrate to be placed with customers in North America
The BFS was managed by a joint team of DRA Global (“DRA”) and M3 Engineering (“M3”), with the latter headquartered in Tucson, Arizona. Input was obtained from specialised North American contractors across mineral resource and reserve estimation and audit, mine design and scheduling including mine rock waste and underground paste fill pump and placement / scheduling, metallurgical testwork and laboratory management, process plant and engineering design including site infrastructure and dry stack tailings, together with capital and operating costing. The study was prepared in accordance with both the Australian JORC Code 2012 Edition (“JORC”) and Canadian National Instrument 43-101 (“NI 43-101”), the latter of which Jervois published on SEDAR in mid-November 2020.
Key technical outputs from the BFS are summarised in Table 1 below:
|Production rate||1,200 stpd ore||NPV (@ 8% real post-tax)1||US$95.7 million|
|1,090 mtpd ore|
|Mine life||7 years||IRR (nom. post-tax)1||40.60%|
|Capital cost1||US$78.4 million||EBITDA2,5||US$54.8 million per annum|
|Operating cost2||US$7.45/lb payable Co (post credits)||EBITDA margin2||52%|
|Cobalt price3||US$25.00/lb||Cobalt in conc. (contained)2||1,915 metric tonnes per annum|
|Copper price4||US$3.00/lb||Copper in conc. (contained)2||2,900 metric tonnes per annum|
|Gold price||US$1,750/os||old in conc. (contained)2||6,700 oz per annum|