Jervois Mining on lookout for growth opportunities, begins hunt for Nico Young offtake and investment partners
While at the International Nickel and Cobalt Industry Forum in China, Jervois attracted “exceptionally strong” interest in its planned mixed nickel-cobalt hydroxide and cobalt and nickel sulphate products from Nico Young.
As it looks to take advantage of growth opportunities, Jervois Mining (ASX: JRV) has begun the hunt for a minority investor and offtake partner to fast-track its wholly-owned flagship Nico Young nickel and cobalt project in New South Wales.
According to Jervois, as the pre-feasibility study on Nico Young nears completion this quarter, it has become evident the production scale will be larger than originally envisaged.
As a result, Jervois has revised its strategy and is now seeking to lock-in part of its planned offtake and find a minority partner to fast-track the project through development and commissioning.
Jervois said introducing a partner will de-risk Nico Young and enable Jervois to take advantage of other growth opportunities as they arise.
To steer the company into production, Jervois has a highly experienced board at the helm, with extensive operational capabilities.
Ex-Glencore executive Peter Johnston was appointed Jervois’ board in June and brings vast knowledge from his time as Glencore’s Head of Global Nickel Assets.
Jervois’ chief executive officer Bryce Crocker said he’d intentionally brought on board members he’d worked with before, with all possessing “first-hand operational experience”.
Unlike other juniors, that aren’t set up to execute a project, Mr Crocker said Jervois’ board, which is made up of ex-Xstrata and Glencore executives, is more than capable of bringing Nico Young and any new acquisition into production and generating cash flow.
Nico Young nickel and cobalt project
Nico Young has a JORC mineral resource of 167.8 million tonnes grading 0.59% nickel and 0.06% cobalt for 996,700t of contained nickel and 96,600t of contained cobalt.
The project has two distinct deposits known as Ardnaree and Thuddungra and is close to key infrastructure including rail and major roads.
In the current pre-feasibility study, Jervois is evaluating a 3Mt per annum production scenario, which it says is “on a scale similar to other major east coast Australian nickel laterite projects” but at a “significantly lower capital”.
Meanwhile heap leach metallurgical test work on the ore has revealed “strong cobalt recoveries” between 80% and 85%, while nickel recoveries were between 70% to 75%.
Heap leach processing generally requires a lower capital outlay and is less energy intensive than high pressure leaching.
Additionally, Jervois has already secured heap leach equipment in anticipation of fast-tracking to production.
Strong interest in Nico Young
Today’s news follows Jervois’ presence at the International Nickel and Cobalt Industry Forum in China last week.
The company said that while at the forum, it attracted “exceptionally strong” preliminary interest in its planned mixed nickel-cobalt hydroxide and cobalt and nickel sulphate products.
“Jervois will now broaden formal discussions on Nico Young to other geographic regions where customer demand for nickel and cobalt units is equally robust,” the company stated.
The company has established a data room and will allow third parties to review its pre-feasibility study for the project, which is due for release before the end of the year.
Cashed up to pursue growth opportunities
To fund its plans, Jervois expects an injection of about $10 million in cash and liquid securities before the year is out from the sale of its Flemington and royalty assets.
Additionally, Jervois has a 4.5% stake in Canadian-listed eCobalt Solutions and put in a prospecting licence application for the Kabanga nickel-cobalt deposit in Tanzania.
Glencore and Barrick gold previously operated Kabanga and spent more than US$250 million on exploration and pre-development activities before shelving the project when the nickel price plunged.
The Tanzanian Government cancelled several retention licences earlier this year, giving Jervois a narrow window of opportunity to apply for prospecting and exploration permits over Kabanga.
Glencore and Barrick have also applied for a prospecting licence for Kabanga. However, Jervois’ experienced board members Mr Crocker and Mr Johnston have intimate knowledge of the asset and are believed well-positioned to develop the project.
Jervois said it was also at an “advanced stage of review and negotiation on other transactions to materially enhance shareholder value”.