2022-06-23 | TSXV: JRV | Press release
Idaho Cobalt Operations’ (“ICO”) capital project schedule and cost review led the Jervois Board of Directors to approve a revised construction budget of $107.5 million, up from $99, $1 million This includes an increase in remaining (unused) contingencies to $3.8 million.
Once in production, ICO will be the only primary cobalt mine in the United States and will supply an essential metal needed for electric vehicles, power generation and distribution, defense and other industries and play a key role in the transition to a low-carbon economy.
Mercuria’s working capital facility of US$150.0 million drawn from an additional US$25.0 million, to US$100.0 million, underpinned by higher inventory and receivables at Jervois Finland, providing a financial flexibility to the entire Jervois group, including for potential financing of development activities in the United States and Brazil
Jervois Global Limited (“Jervois”) (ASX:JRV) (TSXV:JRV) (OTC:JRVMF) is pleased to provide an update on the progress of its Idaho Cobalt operations (“ICO”) in Idaho, USA.
Jervois expects to begin plant commissioning at ICO in September 2022 with first ore passing through the plant in October 2022 and full-scale sustainable ore processing now expected by February 2023.
With detailed engineering, procurement and commitments over 90% complete, planned capital expenditures to bring ICO into production have been revised to $107.5 million (from $99.1 million), an increase of approximately 7.5%. Construction of the project has been under cost pressure due to the significant inflationary environment in the United States, which has worsened in recent months due to contractor shortages, ongoing delays in the operability of an on-site accommodation camp, and poor weather conditions in May and June. Mainly due to weather-related delays affecting site setup, the accommodation camp will now only be operational in August.
The final adjusted forecast of capital expenditure and ICO timing will form the basis of the cost-to-completion test by independent engineer RPM Global, engaged by the trustee acting for the bondholders under Jervois’ US$100.0 million of senior secured bonds (“Nordic Bonds”) (see press release of July 5, 2021). Jervois completed the first drawdown of US$50.0 million (50%) of the Nordic Bonds on February 7, 2022. RPM Global is expected to visit the site in early July to undertake final cost-to-completion testing prior to drawdown expected second tranche of US$50.0 million. later that month.
ICO construction progress
Mine development continues at approximately 25 feet per day. Planned increases in underground working faces, improved water management and road conditions, and the addition of personnel and mining equipment to the site are expected to increase mine development productivity. Jervois and his mining contractor Small Mine Development (“CMS”) remain confident in the revised mine production targets that underpin the capital cost update.
Jervois is achieving infill drilling rates of over 200 feet per day in a 19,000 foot underground campaign aimed at reducing hole space in an effort to improve knowledge of the ore body. Drilling improves the robustness of the resource model to generate a production block model for mining.
The SAG mill, ball mill and crusher are all in place, and work continues with plant construction and equipment placement.
An official opening ceremony is scheduled at the site on October 7, 2022 with the expected attendance of US political leaders and Australian government delegates.
Installing the SAG mill shroud
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ICO surface facility progress
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ICO TWSF Operations and Construction
Mercuria Facility Drawdown
As announced on June 6, 2022, Mercuria Energy Trading SA (“Mercury”) has committed an additional $75.0 million under a secured loan facility (the “Ease”), bringing the total limit of the facility to US$150.0 million. Jervois elected to draw US$25.0 million from this additional facility, bringing the total balance to US$100.0 million. The balance remains below the maximum available amount currently available under the facility, which is based on Jervois Finland’s eligible inventory and receivables. A maximum of US$50.0 million is permitted to be transferred out of the group of companies. Jervois Finland, for other general purposes within the Jervois Global group, including, for example, to fund the group’s development activities in the United States and Brazil.
As of May 31, 2022, Jervois’ balance sheet flexibility remains strong, with an unrestricted cash position of US$57.1 million and a full cash position (including the Nordic Bond Restricted Account, locked pending the second drawing ) of US$114.4 million.
On behalf of Jervois Global Limited
Bryce Crocker, General Manager
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This press release may contain certain “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. When used in this press release, the words “anticipate”, “believe”, “estimate”, “expect”, “target”, “plan”, “expect”, “may”, “plan” and d other similar words or expressions identify forward-looking statements or information. Such forward-looking statements or information may relate to capital costs to ICO, timing of plant commissioning, ore throughput and sustainable ore production at ICO, timing of drawdown of the second tranche of the senior secured obligation, use of facility funds, timing of grand opening and certain other factors or information. Such statements represent Jervois’ current views regarding future events and are necessarily based on a number of assumptions and estimates which, while considered reasonable by Jervois, are inherently subject to business risks, contingencies and uncertainties, important economic, competitive, political and social. Many factors, known and unknown, could cause actual results, performance or achievements to differ materially from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements. Jervois does not intend, and undertakes no obligation, to update such forward-looking statements or information to reflect changes in assumptions or changes in circumstances or any other event affecting such statements and information other than as required. by applicable laws, rules and regulations. .
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