ASX-, TSX-V- and OTCQX-listed Jervois Global has said that it expects to start commissioning the plant at its Idaho Cobalt Operations (ICO), in the US, in September, with first ore through the mill in October.
The company said on Friday that sustainable, full-rate ore processing was forecast to be achieved by February next year.
An official onsite opening ceremony has been planned for October 7, with US political leadership and Australian government delegates expected to participate.
With detailed engineering, procurement and commitments all more than 90% complete, the final forecast capital expenditure (capex) to bring ICO into production has been revised to $107.5-million, up from the previous capex estimate of $99.1-million, reflecting an increase of about 7.5%.
Jervois said that the construction of the project had experienced cost pressures owing to the significant inflationary environment in the US, which had been compounded by contractor shortages, continued delays in the operability of an accommodation camp at site, and poor weather conditions throughout May and June.
These weather-related delays have affected the site installation, which means that the accommodation camp will now only be operable in August.
Jervois said that mine development continued to progress at a rate of about 25 ft/day. The company believed that the planned increases to underground working faces, improved water management and road conditions, as well as additional personnel and mining equipment being brought on site, were expected to increase mine development productivity.
Meanwhile, the semi-autogenous grinding mill, ball mill and crusher were each in place, with work continuing on facilities construction and equipment placement.
Jervois and its mining contractor Small Mine Development indicated that they were confident in the revised mining production targets that underpinned the capital cost update.
In terms of infill drilling rates, more than 200 ft/day was being achieved as part of an initial 19 000 ft underground campaign to decrease hole space for the enhancement of orebody knowledge. This $1.2-million programme was approved in February and is set to be completed in August.
Jervois said that this programme was aimed at improving ICO’s resource model and would be used to develop a production block model for both short- and medium-term mining operations.
On Friday, however, the Jervois board of directors approved an additional $3.6-million for drilling to complete additional infill and first expansion drilling from both surface and underground platforms to further define and expand its Ram deposit within ICO. This will take total planned drilling footage this year to 46 000 ft.
The company said that the RAM deposit remained open at depth and along strike, giving Jervois confidence that there was significant potential for both resource and reserve expansion.
This extended drilling campaign is expected to be completed by the fourth quarter and will continue to reduce drill hole spacing in the resource planned for early production. It will target expansion down dip of the currently defined and known deposit.
The company said that the expansion of the resource was important if ICO was to operate for longer than its initial mine life, or at higher production rates than contained in the ICO bankable feasibility study.
Jervois noted that ICO’s adjusted final forecast capex and schedule would form the basis of the cost-to-complete test, to be completed by independent engineer RPM Global which was engaged by the trustee acting for bondholders under the terms of Jervois’ $100-million senior secured bonds (Nordic Bonds).
Jervois completed the first $50-million drawdown, amounting to 50% of the Nordic Bonds, on February 7.
RPM Global is scheduled to visit the site in early July to undertake the final cost-to-complete test ahead of the planned second tranche bond drawdown of $50-million later next month.
Meanwhile, it was announced on June 6 that commodity trading company Mercuria Energy Trading had committed an additional $75-million under a secured loan facility, taking the total facility limit to $150-million.
Jervois said that it had elected to draw $25-million of this additional facility, taking the total balance out to $100-million, which remained 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-million was permitted to be transferred out of the Jervois Finland group of companies for other general purposes in the Jervois Global group. This included, for example, the funding of development activities in the US and Brazil.
As of May 31, Jervois had an unrestricted cash position of $57.1-million and a total cash position – including the Nordic Bond restricted account, escrowed pending second drawdown – of $114.4-million.