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Friday, 04/29/2022 9:29:52 AM

Friday, April 29, 2022 9:29:52 AM

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Jervois releases BFS for São Miguel Paulista refinery restart

April 29, 2022

Jervois Global Limited (“Jervois”) completes Bankable Feasibility Study (“BFS”) for Stage 1 of São Miguel Paulista Nickel and Cobalt refinery (“SMP”) restart to process mixed nickel hydroxide (“MHP”) and cobalt hydroxide through to metal.

Initial Stage 1 forecast production of 10,000mtpa1 and 2,000mtpa of refined nickel and cobalt metal cathode respectively. Stage 2 BFS regarding a return to full 25,000mtpa refined nickel production capacity expected to be finalized in 2H 2022.

Net Present Value (“NPV”) for Stage 1 restart of US$228 million and US$141 million at an 8% (real) discount rate on a pre-tax and post-tax basis respectively; nominal Internal Rate of Return (“IRR”) of 47% (pre tax) and 35% (post tax).

At US$8.00/lb nickel and US$25.00/lb cobalt, post ramp up of Stage 1 to BFS production rates, average annual EBITDA in real terms projected to be over US$30 million. Refinery economics resilient to a range of market scenarios, including current spot market conditions for refined and intermediate products.

Total project capital cost of US$55 million, representing a competitive refurbishment of an existing brownfield nickel and cobalt refinery. SMP has a long operating history, most recently placed into care and maintenance managed by current owner Companhia Brasil de Alumino (“CBA”).

Restarting the only electrolytic nickel-cobalt refinery in South and Latin America will deliver significant local and regional economic and social benefits to the São Miguel Paulista area of São Paulo city, Brazil.

SMP benefits from competitive low carbon energy (predominantly hydropower), skilled workforce, existing infrastructure including main arterial roads and ~120km from Brazil’s largest container port at Santos.

Jervois is advancing discussions on commercial supply contracts of MHP and cobalt hydroxide to underpin SMP restart. Work continues on design of an autoclave to process cobalt concentrates from Jervois’s 100%-owned Idaho Cobalt Operations (“ICO”); once available, this will be incorporated into the Stage 1 BFS.

Execution planning has commenced and a final investment decision for Stage 1 is anticipated to occur in parallel to closing of the SMP acquisition. Jervois continues to advance operating permit renewal process with the São Paulo City Hall, a condition precedent to closing, before 31 August 2022.

First commercial production from SMP’s Stage 1 restart is expected during 2023.

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