Business news Metals Global

Jervois is undertaking a US$150 million equity capital raising in which Mercuria will invest US$10.5 million

9th November 2022

Proceeds will be used to restart the SMP nickel-cobalt refinery in São Paulo, Brazil and capital expenditure for Idaho Cobalt Operations

Jervois Global Ltd. has made its final investment decision (FID) on the restart of the SMP nickel-cobalt refinery in Sao Paulo, Brazil.

Jervois has continued to advance the restart pathway since Ausenco completed a bankable feasibility study (BFS) in April, 2022. Restart capital deployment is already under way at SMP with an initial $1-million (U.S.) of the previously estimated $55-million (U.S.) total capital cost approved by the Jervois board in September, 2022. Ausenco is currently mobilized at site, undertaking detailed engineering and construction execution planning, as well as advanced procurement. Jervois’s commercial executives are negotiating refinery feed sourcing arrangements, and product sale discussions are also under way.

Jervois has added $10-million (U.S.) contingency to the earlier $55-million (U.S.) estimate to address the potential for capital expenditure escalation. This takes the total budgeted capital project financing to replace and refurbish plant and equipment at SMP, and restart the plant, to $65-million (U.S.).

Restart capital spending is planned across 2023 with production expected to commence in first quarter 2024, with initial production forecast of 10 million tonnes per year nickel and two million tonnes per year cobalt metal cathode.

While not part of the restart, over time, Jervois will target the historic nameplate SMP capacity of 25,000 mtpa nickel through debottlenecking, including further investment. Assessment of the potential addition of a pressure oxidative autoclave (POX) is in progress, with its scope and potential release linked with third party concentrate sale negotiations.

SMP is within the Sao Paulo city limits with ready access to labour and services, 120 kilometres from the largest container port in Brazil (Santos), ensuring it is well located to serve export markets. SMP previously produced Tocantins nickel and cobalt products, which are well established domestically in Brazil and key western export markets.

Jervois has appointed an experienced leadership team to drive SMP project delivery, including recently appointed president and executive general manager, Jervois Brasil, Carlos Braga.

As a part of the equity raising, Mercuria, Jervois’s third-largest shareholder and one of the world’s largest integrated energy and commodity traders, will invest $16.2-million (Australian) ($10.5-million (U.S.)).

See full press release here

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