Published: March 31, 2023 |

[Click image to enlarge]

Jervois Global Limited said it will suspend final construction and full concentrator commissioning at its 100 percent owned Idaho Cobalt Operations mine (ICO) in Idaho, due to continuing low cobalt prices and U.S. inflationary impacts on construction costs. 

Its expects cobalt prices to recover over the medium term, including from the influences of the energy transition (EVs etc) and the company’s expectation that Western cobalt purchasers will increasingly prefer to buy from sources with Western ESG credentials, such as ICO .

The company expects to complete construction of and commission ICO when cobalt prices recover, which it also expects will align with cobalt refining capacity in the U.S. brought into operation by Jervois and/or third parties .

Jervois applied for U.S. Government grant monies to accelerate drilling aimed at increasing ICO mineral resource and reserve, and for studies to assess construction of a cobalt refinery in the U.S. Both can proceed as planned despite ICO’s suspension. The company said it is optimistic that it can benefit from recently announced U.S. Government programs to financially support the development of U.S. supply chains of critical minerals including cobalt

ICO’s mineral resource and reserve is the largest and highest grade confirmed cobalt orebody in the U.S., and when commissioned will represent the country’s only primary cobalt mine supply. Cobalt is a critical mineral as declared by the U.S. Government. Jervois has determined that not mining ICO cobalt at cyclically low prices, will preserve the optionality and inherent strategic value of ICO for shareholders and key stakeholders including local communities and the State of Idaho. The company also views not mining ICO at current prices is consistent with U.S. Government critical mineral policy objectives.

The U.S. Department of Defense (DOD) has advised that it intends to award Jervois an immediate need for Defense Production Act (DPA) Title III with US$15 million of funding through a Not to Exceed Technology Investment Agreement. The DOD award would be subject to Jervois successfully completing required documentary steps including agreement to terms and conditions of the award. 

Jervois applied for the DOD award monies to accelerate its drilling aimed at increasing the ICO mineral resource and reserve, and for studies to assess construction of a U.S. cobalt refinery. Both can proceed despite ICO’s suspension.

Jervois views the DOD’s intention to issue its award as an indication of the importance to the U.S. Government of securing its cobalt supply chain. The company continues to engage with the U.S. Department of Energy and EXIM, the official export credit agency of the U.S., on further financing initiatives.

ICO continues to be a key part of delivering Jervois’ strategy of acquiring and operating geopolitically strategic mining and critical mineral processing assets important to energy transition and the defense industry. 

Jervois will immediately commence an orderly and rapid demobilization of construction contractors from ICO’s site which is expected to be completed in the coming weeks. Total workforce including contractors will reduce from approximately 280 to under 30, which represents a fit-for-purpose workforce to maintain the site in compliance with its regulatory requirements. Where practical, Jervois will look to reassign local ICO employees to the activities to be funded by the DOD award.

The mine component of ICO’s construction has been completed, with a successful start to underground stoping and more than 30,000 short tons of ore ready for processing. However, the current U.S. inflationary construction and cost environment, particularly at ICO’s remote location, has proven challenging for Jervois to manage effectively. Jervois remains in compliance with its bond covenants and there is no expected adverse impact on the bonds to Jervois from ICO’s suspension.

About Jervois Global
Jervois Global Ltd is a cobalt company with nickel and copper exposure, refinery assets, and growth opportunities. The company’s project includes Idaho Cobalt, Sao Miguel Paulista Refinery, Nico Young, and other non-core assets.

To stop by Jervois Global’s website, CLICK HERE

Be in-the-know when you’re on-the-go!

CLICK HERE to register your email address.

Copyright © 2023 Mining Connection LLC. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.

For licensing permission, .(JavaScript must be enabled to view this email address)