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PROJECT|Refinery|Equipment|Operations
PROJECT|Refinery|Equipment|Operations
project|refinery|equipment|operations

Jervois pulls the trigger in Brazil, raises cash

An image of the Idaho mine

Proceeds of the A$231-million equity raise will be used for the Brazil refinery restart and for the ramp up of operations at the Idaho mine (pictured).

10th November 2022

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – Triple listed Jervois Global has taken a final investment decision on the restart of its São Miguel Paulista (SMP) nickel cobalt refinery in São Paulo, Brazil, while launching a A$231-million equity raise.

The company previously estimated that it would spend $55-million on the Stage 1 restart, aimed at producing 10 000 t/y of nickel and 2 000 t/y of cobalt metal cathode, with first production targeted for the first quarter of 2024.

The company has added a $10-million contingency to the capital estimate to address potential cost escalations at SMP, taking the total budgeted capital project funding to replace and refurbish plant and equipment, and to restart the plant, to $65-million.

While not part of the restart, over time, Jervois will target the historic nameplate SMP capacity of 25 000 t/y nickel via debottlenecking, including further investment.

Meanwhile, Jervois on Thursday also announced a A$231-million capital raise, consisting of a A$113-million institutional placement and an A$118-million 1-for-5.42 accelerated pro-rata non-renounceable entitlement offer.

The company would issue 550-million new shares under the equity raise, equating to around 36% of its current issued capital. The shares will be issued at a price of 42c each, representing a 16.8% discount to Jervois’ last trading price.

The company’s largest investor, AustralianSuper, has agreed to invest up to A$55.6-million to participate in up to 24% of the equity raising, including its full institutional offer entitlement, while its third-largest shareholder, Mercuria, will invest A$16.2-million.

Jervois will use proceeds from the equity raising to fully fund the restart of SMP, the Idaho Cobalt Operations (ICO) ramp-up and mine sustaining capital expenditure, and for general corporate purposes including Jervois Finland expansion bankable feasibility study (BFS).

The equity raising provides a fully funded, derisked restart model that is the simplest and lowest capital pathway to SMP production, Jervois told shareholders, adding that the equity raise was the preferred funding pathway as it ensured the company maintained a balanced capital structure.

Importantly, it allows Jervois to retain full ownership of its three geopolitically strategic assets in high-quality jurisdictions, producing critical minerals that will be delivered to Western markets.

“Macroeconomic tailwinds are strong, with nickel prices and premia significantly above assumptions applied in the SMP restart BFS. These trends are expected to continue into 2023 and beyond. Strengthening its balance sheet ahead of a key negotiating period with OEMs and other nickel and cobalt customers, Jervois is well-positioned to maximise commercial outcomes for the benefit of all shareholders,” the company said in a statement.

Edited by Creamer Media Reporter

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