Jervois Mining gains exposure to advanced cobalt project in US via eCobalt Solutions

Jervois Mining ASX JRV TSX eCobalt Solutions Idaho cobalt project Nico-Young nickel cobalt
Jervois Mining has acquired a 4.54% stake in TSX-listed eCobalt Solutions, which owns the most advanced primary cobalt project in the US.

Jervois Mining (ASX: JRV) has hooked a 4.54% stake in TSX-listed eCobalt Solutions (TSXL: ECS), which owns 100% of the Idaho high-grade cobalt project – the most advanced primary cobalt project in the US.

Under the transaction, Jervois acquired 7.249 million shares in eCobalt for C$9.9 million and will offer support to eCobalt regarding advancing Idaho, which has secured necessary permits to develop the project.

According to Jervois, eCobalt’s project represents “the only near term domestic cobalt production potential” in the US.

A feasibility study was completed in late 2017 and estimates a 12.5-year mine life based on proven and probable reserves of 3.66 million tonnes grading 0.47% cobalt for 34.51 million pounds of contained cobalt.

The mine also hosts copper and gold with reserves of 49.75Mlb of contained copper and 53,286 ounces of gold.

Additional measured and indicated resources of 45.7Mlb cobalt, 65.8Mlb copper and 68,000oz gold have also been calculated.

Resources also remain open at depth and along strike.

eCobalt is targeting mine construction to begin early next year with commercial production by 2020.

Australian-based Tribeca Investment Partners and Regal Funds Management both hold around 6% in eCobalt and have called on the company’s board to act as a result of numerous delays to advancing Idaho, and eCobalt’s share price falling 58% this year compared to 2017 levels.

Regal Funds Management portfolio manager Julian Barbaczy told Reuters a change in strategy or the board was needed to accelerate Idaho’s development.

However, the eCobalt said its new plan will boosted the project’s economics.

As part of eCobalt’s new strategy and Jervois’ 4.5% shareholding, Jervois will provide advice and support to facilitate the project’s development.

Jervois believes its management team offers the right skills and experience Tribeca and Regal are chasing for the eCobalt to drive Idaho to production.

Royalty sale tops up cash

Meanwhile, the June quarter brought several milestones for Jervois including the sale of its Nyngan and Flemington royalties to Cobalt 27 Capital Corp (TSXV: KBLT).

The sale totals US$4.5 million. It will give Jervois US$1.5 million in cash and US$3 million worth of Cobalt 27 shares.

Jervois will also boost its coffers further with a A$4 million option payment by the end of the year from Australian Mines regarding the Flemington project.

The company ended the quarter with A$4.7 million in cash and a further A$8.4 million in public securities and no debt.

Nico-Young cobalt-nickel project

Jervois is focussed on bringing its New South Wales-based Nico-Young cobalt-nickel project into production.

A prefeasibility study is underway at Nico-Young and due for delivery in the December quarter along with a resource upgrade, with Nico-Young currently possessing an inferred resource of 167.8Mt grading 0.59% nickel and 0.06% cobalt.

Jervois is pursuing a lower-cost heap leach processing operation at Nico-Young, with metallurgical testwork to-date providing “encouraging” results regarding the cobalt and nickel solubility.

Preliminary metallurgical results are anticipated before the end of August.

Lorna has more than 10 years' experience as a finance journalist and editor. She has written for numerous industry publications reporting on various sectors, including: resources, energy, construction, biotech, pharma, science and technology, agriculture, and chemicals. Specialising in resources, Lorna has also covered a myriad of small and large cap ASX and dual-listed stocks.