Jervois’ Idaho cobalt mine hit by inflation pressure
Jervois Mining Ltd. [JRV-TSXV, ASX, JRVMF-OTC, IHS-FRA] has updated its construction progress and released new cost forecasts for its 100%-owned Idaho cobalt operations in Idaho.
The company said its project team and EPCM M3 Engineering have completed a reforecast to schedule and budget based on current site efficiency and price submissions on all equipment and site construction contract work.
In July, 2021, the Jervois Board of Directors approved US$92.6 million capital for construction of the mine and process facility with a first ore commissioning date of July, 2022.
However, based on current pricing from the market for labour and materials, inflationary pressure has resulted in an updated capital cost of US$99.1 million.
First ore through the mill is now planned for August, 2022. The date for sustainable ore production remains unchanged, during December, 2022.
Jervois is focused on becoming a global supplier in the emerging battery metals market. In keeping with that focus, the company swallowed eCobalt Solutions Inc. last year in a $57.6 million deal, a move that gave Jervois Mining access to eCobalt’s Idaho Cobalt Project, a high-grade cobalt deposit located in Idaho.
Idaho Cobalt Operations (ICO) is now Jervois’ flagship primary cobalt deposit located in Idaho near the town of Salmon. Over the course of 20 years, approximately US$100 million has been invested in developing the mine.
It is fully environmentally permitted for ore processing capacity of up to 1,200 tons and has high cobalt and copper grades, with a gold by-product.
The ICO is located in the heart of the Idaho Cobalt Belt, a unique mineral rich, prolific metallogenic district unique to North America, which historically produced 2 million tons of contained cobalt between the early 1900s through to the 1960s.
In an update, the company said ore reserves now stand at 2.5 million tonnes at 0.55% cobalt, 0.80% copper and 0.64 g/t gold. As a result, it envisages average annual contained production of 1,915 tonnes of cobalt, 2,900 tonnes of copper and 6,700 ounces of gold.
Jervois has already announced the successful completion of an updated bankable feasibility study for the ICO. It said the study confirms the potential of the project to establish a near-term, low-cost cobalt-copper-gold mine, with significant opportunity to increase the mineral resource and extend mine reserves once mining commences.
On December 15, Jervois shares closed at 47 cents and now trade in a 52-week range of 61 cents and 33.5 cents.
On Thursday, the company said increased costs related to high density polyethylene (HDPE) for the waste storage facility, steel and cement supply, camp materials, construction and site labour cost have contributed to inflationary pressure on the project budget, and are incorporated into the revised forecast.