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Jervois Global Ltd
Symbol JRV
Shares Issued 1,519,750,961
Close 2022-06-23 C$ 0.465
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Jervois to begin ICO plant commissioning in September

2022-06-23 21:54 ET - News Release

Mr. Bryce Crocker reports

JERVOIS' ICO ON TRACK FOR Q3 2022 COMMISSIONING

Jervois Global Ltd. has provided an update on progress at its Idaho cobalt operations (ICO) in Idaho, United States.

Jervois expects to commence commissioning the plant at ICO in September, 2022, with first ore through the mill in October, 2022, and sustainable, full-rate ore processing now forecast by February, 2023.

With detailed engineering, procurement and commitments all over 90 per cent complete, final forecast capital expenditure to bring ICO into production has been revised to $107.5-million (U.S.) (from $99.1-million (U.S.)), an increase of 7.5 per cent. Project construction has experienced cost pressures due to the significant U.S. inflationary environment, which has been compounded in recent months due to contractor shortages, continued delays in the operability of an accommodation camp at site, and poor weather conditions across May and June. Due primarily to weather-related delays affecting site installation, the accommodation camp will now only be operable in August.

ICO's adjusted final forecast capital expenditure and schedule will form the basis of the cost to complete a test by independent engineer RPM Global, engaged by the trustee acting for bondholders under the terms of Jervois's $100.0-million (U.S.) senior secured bonds (refer to press release dated July 5, 2021). Jervois completed the first $50.0-million (U.S.) drawdown (50 per cent) of the Nordic bonds on Feb. 7, 2022. RPM Global is scheduled to visit the site in early July to undertake the final cost to complete the test ahead of the planned second tranche bond drawdown of $50.0-million (U.S.) later that month.

ICO construction progress

Mine development continues at approximately 25 feet per day. Planned increases to underground working faces, improved water management and road conditions, as well as additional personnel and mining equipment on site, are expected to increase mine development productivity. Jervois and its mining contractor Small Mine Development remain confident in the revised mining production targets that underpin the capital cost update.

Jervois is achieving infill drilling rates of over 200 feet per day as part of a 19,000-foot underground campaign to decrease hole space aiming to enhance orebody knowledge. The drilling is improving the robustness of the resource model to generate a production block model for mining.

The SAG (semi-autogenous grinding) mill, ball mill and crusher are each in place, and work continues with facility construction and equipment placement.

An official opening ceremony is scheduled at the site for Oct. 7, 2022, with expected participation of U.S. political leadership and Australian government delegates.

Mercuria Energy Trading SA facility drawdown

As announced on June 6, 2022, Mercuria has committed an additional $75.0-million (U.S.) under a secured loan facility, taking the total facility limit to $150.0-million (U.S.). Jervois has elected to draw $25.0-million (U.S.) of this additional facility, taking the total balance out to $100.0-million (U.S.). The balance remains less than the maximum available amount currently available under the terms of the facility, which is based on Jervois Finland's eligible inventories and receivables. A maximum of $50.0-million (U.S.) is permitted to be transferred out of the Jervois Finland group of companies for other general purposes in the Jervois global group, including, for example, for financing of the group's development activities in the United States and Brazil.

As of May 31, 2022, Jervois's balance sheet flexibility remains strong, with an unrestricted cash position of $57.1-million (U.S.) and a total cash position (including the Nordic bond restricted account, escrowed pending second drawdown) of $114.4-million (U.S.).

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