Jervois Global Limited Quarterly Activities Report to 30 June 2023
Australia - 27 July 2023 - Jervois Global Ltd. (OTC:JRVMF) (TSX-V:JRV) (ASX:JRV)
Delivering on business priorities
Against a backdrop of an improving cobalt market outlook, Jervois has made significant progress delivering on the near-term priorities set out in the March 2023 Quarterly Activities Report. Priorities and key milestones delivered in the quarter are as follows:
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Maximise margin and cash flow at Jervois Finland:
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US$2.6 million Adjusted EBITDA and US$31.9 million cash flow from operations in the quarter
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Deliver a cost-effective suspension phase at ICO and maximise restart optionality:
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ICO demobilisation and transition to suspension complete
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Execute government (DoD) funded ICO drilling programme and U.S. refinery studies:
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US$15.0 million agreement with DoD, Jervois commencing work
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U.S. Export Credit Agency EXIM confirms ICO eligibility for domestic financing
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Advance debt and partner financing process at SMP:
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Multiple parties engaged in due diligence
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Review partnership opportunities at each asset to crystalise and demonstrate value:
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Broader partnership process underway
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Jervois' US$50.0 million capital raise announced in June provides the financial strength to navigate the price cycle and continue to deliver the business plan. The capital raise and substantially completed in July with the 2nd tranche of UCN expected in August. Management continues to focus on the priority activities that provide a solid foundation for the medium- to long-term future of the Company, with a goal of establishing multiple operating assets and generating sustainable cash flow through commodity cycles.
Jervois Finland
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Quarterly revenue US$56.6 million (Q1 2023: US$57.6 million)
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Cash flow from operations US$31.9 million (Q1 2023: US$1.3 million)
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Adjusted EBITDA1 US$2.6 million (Q1 2023: -US$10.4 million)
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Sales volume 1,602 metric tonnes (Q1 2023: 1,558 metric tonnes)
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Production volume: 1,367 metric tonnes (Q1 2023: 1,082 metric tonnes)
Jervois Finland returned to positive Adjusted EBITDA and unlocked significant cash flow in the period, including through a release of working capital. The working capital release resulted from inventory reductions, optimisation initiatives, and the residual working capital benefits of cobalt price declines since the beginning of the year.
Sales and marketing
Jervois Finland produced 1,367 metric tonnes and sold 1,602 metric tonnes of cobalt in the quarter. Sales were broadly in line with the prior quarter and reflective of a stable outlook for demand. The annual maintenance shutdown of the plant was successfully completed in May, with impacts on production levels in line with expectations during the period.
Click Image To View Full Size
Global alloy grade metal demand continues to be strong, on the back of rising aerospace and defence spending. Chinese metal prices are strong, at around US$18 per lb, supported by its government owned State Reserve Board decision to invite tenders of 5,000 metric tonnes for its stockpile, believed to support Chinese military investment. Chinese producers have also switched into metal production as a result, with this trend expected to rise across the remainder of 2023 due to tight physical metal markets.
Metal Bulletin ("MB") Fastmarkets alloy grade pricing is US$18.35 to US$19.50 per lb, with standard grade ("SG") currently US$16.50 to US$18.00 per lb, as of Wednesday, 26 July. Cobalt hydroxide payables are also rising in conjunction an improving market backdrop, at 65% to 67% of the MB Fastmarkets SG low price.
Further background on Jervois Finland's customer industry groups is outlined below.
Batteries:
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Whilst destocking has occurred in battery supply chains, inventory levels for Jervois Finland's existing customers today remains above normal levels; recovery still expected in Q4 2023 or early 2024.
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Continued interest from electric vehicle ("EV") OEMs (automakers) both European and U.S. based, for long-term cobalt supply contracts starting in 2024 and expected to grow significantly in future years.
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U.S. Inflation Reduction Act ("IRA") continues to drive interest in U.S. and other Western supply of battery raw materials; recent introduction of Japanese eligibility under domestic U.S. EV credit viewed as positive by Jervois Finland's customers.
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South Korean customers continue to advance qualification of Jervois Finland products with a view to support Jervois' 2024 re-entry into this market; significant focus on non-Chinese supply for IRA compliance.
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Chemicals, Catalysts and Ceramics:
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Catalysts: cobalt consumption is good, up versus 2022. Initial customer forecasts for 2024 are strong.
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Chemicals: key application areas of copper electrowinning, coatings, and rubber adhesion remain solid and are tracking higher than last year.
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Ceramics: robust business with glass producers, and steady sales into liquid and powder pigments applications albeit activity moderating over July and August due to the European summer. Discounts have reduced, but strong competition from the Chinese into Europe continues given customer spot purchasing and flexible ESG standards.
Powder Metallurgy:
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Automotive production is variable with continued issues around semi-conductor supply. Expectations for improvement in 2024. Non-EV parts into combustion engines remain an important driver for at least the next decade. General engineering, including construction, remains soft.
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U.S. oil and gas production has fallen, due to lower natural gas prices, which is projected to continue for the remainder of 2023 as rig counts fall.
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Aerospace remains strong, with continued optimism and full order books going forward - customers looking to pivot their exposure to the extent that their production capacity and certification / qualification lead times permit. Aerospace outlook is underpinned by increased defence spending.
Financial performance
Jervois Finland achieved revenue of US$56.6 million in the quarter, broadly in line with the prior quarter, with both pricing and volumes remaining relatively stable.
Adjusted EBITDA
Adjusted EBITDA was US$2.6 million in the quarter. Margins stabilised in line with the relative stability in both cobalt prices and cobalt hydroxide raw materials during the period. Normalisation of feed pricing was a key factor that underpinned Jervois Finland's return to positive Adjusted EBITDA. Operating cost pressures also continued to ease in the quarter. Market pricing for key inputs such as caustic soda and oxalic acid have continued to decline. Freight rates and utility costs have also begun to normalise, further contributing to stabilisation and improvement in margins.
Jervois Finland continued to strengthen its management team as it continues to deliver its business turnaround, with operating and finance leadership roles appointed in the quarter.
Operationally, the plant performed well in the quarter with all key operational, environmental, and safety targets achieved in the period. The key near-term focus for Jervois Finland remains on operational performance, cash generation, and risk management.
Figure 2: Jervois Finland Adjusted EBITDA (US$M, unaudited)
A reconciliation between adjusted EBITDA, EBITDA, and net profit after tax ("NPAT") for Jervois and Jervois Finland is included on page 11. A revaluation of the contingent consideration liability associated with the acquisition of the Jervois Finland business from Freeport McMoRan Inc. in 2021 resulted in a US$10.0 million favourable adjustment to the statement of profit or loss at 30 June. This was principally due to the application of updated economic assumptions in the valuation at the reporting date. This adjustment has been excluded from Adjusted EBITDA.
Cash flow performance
Cash flow from operations (before interest payments) was US$31.9 million in the quarter. Positive cash flow resulted from the continued stabilisation of the Jervois Finland business, and material benefits from the release of working capital in the period. The planned unwind of inventory accelerated in the quarter with a reduction of 522 metric tonnes. Physical cobalt inventories reduced by US$17.4 million from US$66.0 million at 31 March to US$48.6 million at 30 June. This represented an improvement in the quarter from ~134 days at 31 March to ~100 days at 30 June. Jervois achieved its target of returning inventory to levels within the 90 to 110 days range and expects inventories to remain within the target range during the second half of 2023. Receivables also decreased in the period from US$40.4 million at 31 March to US$27.0 million at 30 June.
Jervois made partial repayment of the Mercuria working capital facility in the period in line with the reduction of the underlying collateral value. Payments of US$12.5 million and US$8.6 million were completed in June and July, respectively, in accordance with the terms of the facility agreement, with the current loan balance being US$48.9 million at the date of this report.
Kokkola refinery expansion awarded conditional €12.0 million grant
Jervois Finland was awarded a conditional €12.0 million in reimbursable cash funding from Business Finland, a Finnish State development body, for its potential future expansion of cobalt refining capacity at the Kokkola Industrial Park ("KIP"), subject to meeting certain conditions.
The Business Finland grant is expected to reimburse part of Jervois bankable feasibility study ("BFS") costs and costs of any future construction of a Finland cobalt refinery expansion. The award relates to Jervois' environmental, social, and governance ("ESG") strategies for the facility, namely for an intention to exceed the European Union's environmental protection standards and to reinforce Jervois Finland's existing position of ESG leadership in the cobalt industry.
Jervois paused work on its BFS for a cobalt refinery expansion at KIP in April 2023 in favour of working on a BFS for a new cobalt refinery located in the U.S. to be fully funded by the U.S. Department of Defense ("DoD").
The grant will be released subject to the satisfaction of several conditions, including Jervois Board approval (or final investment decision) to construct the facility, securing financing, and receipt of certain environmental permits. The grant expires at the end of October 2024.
Idaho Cobalt Operations ("ICO"), United States
The demobilisation of the ICO construction project and transition to suspension mode was completed safely and cost effectively in the quarter. The US$15.0 million agreement with the U.S. DoD was finalised and announced in June, and Jervois is commencing work on the resource drilling programme and the U.S. refinery studies.
Drilling is expected to define and expand ICO's RAM deposit existing cobalt resources and delineate the adjacent Sunrise historic resource to modern geological standards.
A portion of the US$15.0 million will also fund a BFS for a cobalt refinery located in the U.S. to be completed by a Jervois subsidiary delegated by Jervois Mining USA.
Preparation of Jervois' U.S. refinery BFS will be expedited as it will benefit from efficiencies provided by the Company's efforts and work-in progress on a cobalt refinery expansion BFS at Jervois Finland. The Company pivotted to the U.S. refinery BFS from a cobalt refinery expansion BFS, as announced on 18 April 2023.
Jervois anticipates that the U.S. cobalt refinery would be funded under the U.S. Department of Energy Advanced Technology Vehicle Manufacturing Loan Program (the "ATVM Loan Program"), which provides loans to construct U.S. facilities to manufacture advanced technology vehicles and qualifying components used in those vehicles. Jervois has submitted an application under the ATVM Loan Program to fund its proposed U.S. cobalt refinery to produce cobalt sulphate for the nascent, but rapidly emerging, U.S. EV industry.
The U.S. Export-Import Bank ("EXIM") confirmed ICO's eligibility for domestic financing initiatives in April, and engagement continues to progress positively on ICO with the U.S. Government. Jervois believes this further highlights the strategic significance of ICO to the U.S. Government. EXIM notified Jervois that ICO qualifies under both its China and Transformational Exports Program and the Make More in America Initiative.
EXIM is the official export credit agency of the U.S. Government. It is an independent Executive Branch agency with a mission of supporting U.S. jobs by facilitating the export of U.S. goods and services.
São Miguel Paulista ("SMP") nickel and cobalt refinery, Brazil
Partner financing opportunities at SMP continue to progress, with several parties engaging with Jervois in due diligence, including through site visits to SMP. SMP's economic potential is strong based on prevailing market conditions, with market pricing for both nickel metal and mixed hydroxide precipitate intermediate feed trending favourably compared to the BFS assumptions published in 2022.
The SMP restart project tempo will resume following the outcome of the partnering process. Monthly costs are currently ~US$0.5 million. SMP continued to focus on establishing internal processes and project controls in preparation for a full reactivation expected to occur later in 2023 once financing is committed which is also expected later this year, and continued review of opportunities to optimise and de-risk the restart capital project.
Nico Young nickel-cobalt project, Australia
Jervois has commenced a divestment process to sell all or part of its interest in the Company's 100%-owned Nico Young nickel and cobalt project. Nico Young has had >A$20 million invested by Jervois since discovery and is a strategic future source of Western nickel and cobalt.
Corporate activities
Liquidity
In June, Jervois announced a US$50.0 million total capital raising, comprising:
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US$25.0 million unsecured convertible notes ("UCN") in 2 tranches maturing in July 2028 which are convertible into Jervois ordinary shares ("Convertible Notes Offer"). The initial conversion price for the UCN represents a 40% premium to the Entitlement Offer Theoretical Ex Rights Price ("TERP")2 and the UCN carry a 6.5% p.a. coupon; and
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US$25.0 million fully underwritten 1 for 3.34 accelerated non-renounceable entitlement offer (the "Entitlement Offer"), undertaken in parallel with the Convertible Notes Offer.
Net proceeds from the capital raising will strengthen Jervois' balance sheet, improve liquidity and working capital flexibility, with cash also being applied to debt reduction.
Tranche 1 of UCN of US$19.9 million was completed on 20 July 2023 and Tranche 2 of UCN of US$5.1 million is expected to be completed in August following a meeting of the Company's shareholders to consider it. Shareholders of the Company representing 21% of the Company's shares have committed to vote in favour of the issue of Tranche 2 of the UCN.
The institutional component of the Entitlement Offer was successfully completed, as announced on 3 July 2023, and the retail component of the Entitlement Offer was successfully completed, as announced on 21 July 2023.
Jervois ended the June quarter with US$32.2 million in cash (which excludes any proceeds from the capital raising), US$48.6 million physical cobalt inventories in Jervois Finland, and total drawn debt of US$157.5 million3.
Environmental, social, governance, and compliance
Jervois delivered its 2022 Sustainability Report during the quarter, highlighting our progress on material ESG priorities and outlines our targets for continuous improvement as we strive to meet the current and future needs of our our business, our stakeholders, society, and the planet.
ESG activities in the quarter focussed on strengthening internal coordination and competence, as well as engagement with industry associations. Jervois continues to chair the Cobalt Institute's Responsible Sourcing and Sustainability Committee and actively engage in related working groups on ESG standards, the circular economy, and a range of other topics including its Cobalt Learning Group, focused on expanding due diligence programs to address broader environmental and human rights risks beyond OECD Due Diligence requirements for Responsible Mineral Supply Chains.
Presentations and events
Jervois' CEO, Bryce Crocker, participated in a critical minerals roundtable discussion titled 'Fostering Resilience in the Electric Vehicle Supply Chain Through Foreign Direct Investment' as part of the 2023 SelectUSA Investment Summit in Maryland, U.S. held in May 2023, after an invitation from the U.S. Department of Commerce. He also participated in the Jefferies Renewables & Clean Energy Virtual Conference and conducted 1:1 investor meetings at the conference.
Jervois' CFO, James May, participated in Canaccord Genuity's Global Metals and Mining Conference and conducted 1:1 investor meetings during the event in California in May.
Exploration and development expenditure
No material cash expenditure on exploration and development was incurred during the quarter.
Insider compensation reporting
During the quarter, US$0.1 million was paid to Non-Executive Directors and US$0.1 million was paid to the CEO (Executive Director).
Non-core assets
The non-core assets are summarised on the Company's website.
ASX waiver information
On 6 June 2019, the ASX granted a waiver to Jervois in respect of extending the period to 8 November 2023 in which it may issue new Jervois shares to the eCobalt option holders as part of the eCobalt transaction.
As at 30 June 2023, the following Jervois shares were issued in the quarter on exercise of eCobalt options and the following eCobalt options remain outstanding:
| Jervois shares issued in the quarter on exercise of eCobalt options: | Nil |
| eCobalt options remaining4 | |
| 1,980,000 | eCobalt options exercisable until 1 October 2023 at C$0.53 each |
By Order of the Board
Bryce Crocker
Chief Executive Officer
For further information, please contact:
| Investors and analysts: Alicia Brown Group Manager External Affairs alicia.brown@jervoisglobal.com | Media: Nathan Ryan NWR Communications nathan.ryan@nwrcommunications.com.au Mob: +61 420 582 887 |
Forward-Looking Statements
This news release may contain certain "Forward-Looking Statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. When used in this news release, the words "anticipate", "believe", "estimate", "expect", "target, "plan", "forecast", "may", "schedule" and other similar words or expressions identify forward-looking statements or information. These forward-looking statements or information may relate to partnership for group operations, operations at Jervois Finland, drilling to be undertaken at ICO, future funding from the U.S. Government, timing of restart of SMP, sale of Nico Young and the reliability of third-party information, and certain other factors or information. Such statements represent the Company's current views with respect to future events and are necessarily based upon a number of assumptions and estimates that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social risks, contingencies and uncertainties. Many factors, both known and unknown, could cause results, performance, or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements. The Company does not intend, and does not assume any obligation, to update these forward-looking statements or information to reflect changes in assumptions or changes in circumstances or any other events affections such statements and information other than as required by applicable laws, rules, and regulations.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Basis of preparation of financial information
Historical financial information
Financial information is prepared under Jervois Global Group accounting policies, which conform with Australian Accounting Standards ("AASBs") and International Financial Reporting Standards ("IFRS"). The Jervois Finland financial results for the period post-acquisition are consolidated into the Jervois Global Group consolidated financial statements. All information presented is unaudited.
Reconciliation of NPAT to EBITDA and Adjusted EBITDA
EBITDA is a non-IFRS financial measure. EBITDA is presented as net income after adding back interest, tax, depreciation and amortisation, and extraordinary items. Adjusted EBITDA represents EBITDA adjusted to exclude items which do not reflect the underlying performance of the Company's operations. Exclusions from Adjusted EBITDA are items that require exclusion in order to maximise insight and consistency on the financial performance of the Company's operations.
Exclusions include gains/losses on disposals, impairment charges (or reversals), certain derivative items, NRV adjustments to inventories, and one-off costs related to post-acquisition integration.
Refer to the table below for a reconciliation of NPAT to EBITDA and Adjusted EBITDA.
Click Image To View Full Size
ICO and SMP non-cash accounting adjustments at 30 June 2023
While cash costs at ICO trended in line with expectations during the quarter, financial results at 30 June were impacted by one-off non-cash adjustments recorded in the statement of profit or loss related to the provision for rehabilitation and modifications to leases following suspension of the ICO project. Total non-cash costs recorded at 30 June for these adjustments were US$2.3 Million and are included in Adjusted EBITDA.
As noted in the Quarterly Activities Report for the first quarter, Jervois recorded a non-cash impairment charge at ICO of US$40.3 million at 31 March. An updated review was completed for the 30 June reporting period, with no further charge or adjustment recorded as a result of this review. The impairment is based on Jervois' best estimate at this time. As outlined in the 31 December 2022 accounts, the recoverable amount is sensitive to a number of future assumptions. Future changes to assumptions could lead to further impairment or reversal of the impairment charge recorded.
SMP also incurred one-off non-cash costs in the period, related to remeasurement of the lease liability and updates to the environmental liability. Total non-cash costs recorded at 30 June for these adjustments were US$1.9 million and are included in Adjusted EBITDA.
Tenements
Australian Tenements
| Description | Tenement number | Interest owned % | |
| Ardnaree (NSW) | EL 5527 | 100.0 | |
| Thuddungra (NSW) | EL 5571 | 100.0 | |
| Nico Young (NSW) | EL 8698 | 100.0 | |
| West Arunta (WA) | E80 4820 | 17.9 | |
| West Arunta (WA) | E80 4986 | 17.9 | |
| West Arunta (WA) | E80 4987 | 17.9 |
| Uganda Exploration Licences | |||
| Description | Exploration Licence number | Interest owned % | |
| Kilembe Area | EL0292 | 100.0 | |
| Kilembe Area | EL0012 | 100.0 | |
| Idaho Cobalt Operations - 100% Interest owned | |||
| Claim Name | County # | IMC # | |
| SUN 1 | 222991 | 174156 | |
| SUN 2 | 222992 | 174157 | |
| SUN 3 Amended | 245690 | 174158 | |
| SUN 4 | 222994 | 174159 | |
| SUN 5 | 222995 | 174160 | |
| SUN 6 | 222996 | 174161 | |
| SUN 7 | 224162 | 174628 | |
| SUN 8 | 224163 | 174629 | |
| SUN 9 | 224164 | 174630 | |
| SUN 16 Amended | 245691 | 177247 | |
| SUN 18 Amended | 245692 | 177249 | |
| Sun 19 | 277457 | 196394 | |
| SUN FRAC 1 | 228059 | 176755 | |
| SUN FRAC 2 | 228060 | 176756 | |
| TOGO 1 | 228049 | 176769 | |
| TOGO 2 | 228050 | 176770 | |
| TOGO 3 | 228051 | 176771 | |
| DEWEY FRAC Amended | 248739 | 177253 | |
| Powder 1 | 269506 | 190491 | |
| Powder 2 | 269505 | 190492 | |
| LDC-1 | 224140 | 174579 | |
| LDC-2 | 224141 | 174580 | |
| LDC-3 | 224142 | 174581 | |
| LDC-5 | 224144 | 174583 | |
| LDC-6 | 224145 | 174584 | |
| LDC-7 | 224146 | 174585 | |
| LDC-8 | 224147 | 174586 | |
| LDC-9 | 224148 | 174587 | |
| LDC-10 | 224149 | 174588 | |
| LDC-11 | 224150 | 174589 | |
| LDC-12 | 224151 | 174590 | |
| LDC-13 Amended | 248718 | 174591 | |
| LDC-14 Amended | 248719 | 174592 | |
| LDC-16 | 224155 | 174594 | |
| LDC-18 | 224157 | 174596 | |
| LDC-20 | 224159 | 174598 | |
| LDC-22 | 224161 | 174600 | |
| LDC FRAC 1 Amended | 248720 | 175880 | |
| LDC FRAC 2 Amended | 248721 | 175881 | |
| LDC FRAC 3 Amended | 248722 | 175882 | |
| LDC FRAC 4 Amended | 248723 | 175883 | |
| LDC FRAC 5 Amended | 248724 | 175884 | |
| RAM 1 | 228501 | 176757 | |
| RAM 2 | 228502 | 176758 | |
| RAM 3 | 228503 | 176759 | |
| RAM 4 | 228504 | 176760 | |
| RAM 5 | 228505 | 176761 | |
| RAM 6 | 228506 | 176762 | |
| RAM 7 | 228507 | 176763 | |
| RAM 8 | 228508 | 176764 | |
| RAM 9 | 228509 | 176765 | |
| RAM 10 | 228510 | 176766 | |
| RAM 11 | 228511 | 176767 | |
| RAM 12 | 228512 | 176768 | |
| RAM 13 Amended | 245700 | 181276 | |
| RAM 14 Amended | 245699 | 181277 | |
| RAM 15 Amended | 245698 | 181278 | |
| RAM 16 Amended | 245697 | 181279 | |
| Ram Frac 1 Amended | 245696 | 178081 | |
| Ram Frac 2 Amended | 245695 | 178082 | |
| Ram Frac 3 Amended | 245694 | 178083 | |
| Ram Frac 4 Amended | 245693 | 178084 | |
| HZ 1 | 224173 | 174639 | |
| HZ 2 | 224174 | 174640 | |
| HZ 3 | 224175 | 174641 | |
| HZ 4 | 224176 | 174642 | |
| HZ 5 | 224413 | 174643 | |
| HZ 6 | 224414 | 174644 | |
| HZ 7 | 224415 | 174645 | |
| HZ 8 | 224416 | 174646 | |
| HZ 9 | 224417 | 174647 | |
| HZ 10 | 224418 | 174648 | |
| HZ 11 | 224419 | 174649 | |
| HZ 12 | 224420 | 174650 | |
| HZ 13 | 224421 | 174651 | |
| HZ 14 | 224422 | 174652 | |
| HZ 15 | 231338 | 178085 | |
| HZ 16 | 231339 | 178086 | |
| HZ 18 | 231340 | 178087 | |
| HZ 19 | 224427 | 174657 | |
| Z 20 | 224428 | 174658 | |
| HZ 21 | 224193 | 174659 | |
| HZ 22 | 224194 | 174660 | |
| HZ 23 | 224195 | 174661 | |
| HZ 24 | 224196 | 174662 | |
| HZ 25 | 224197 | 174663 | |
| HZ 26 | 224198 | 174664 | |
| HZ 27 | 224199 | 174665 | |
| HZ 28 | 224200 | 174666 | |
| HZ 29 | 224201 | 174667 | |
| HZ 30 | 224202 | 174668 | |
| HZ 31 | 224203 | 174669 | |
| HZ 32 | 224204 | 174670 | |
| HZ FRAC | 228967 | 177254 | |
| JC 1 | 224165 | 174631 | |
| JC 2 | 224166 | 174632 | |
| JC 3 | 224167 | 174633 | |
| JC 4 | 224168 | 174634 | |
| JC 5 Amended | 245689 | 174635 | |
| JC 6 | 224170 | 174636 | |
| JC FR 7 | 224171 | 174637 | |
| JC FR 8 | 224172 | 174638 | |
| JC 9 | 228054 | 176750 | |
| JC 10 | 228055 | 176751 | |
| JC 11 | 228056 | 176752 | |
| JC-12 | 228057 | 176753 | |
| JC-13 | 228058 | 176754 | |
| JC 14 | 228971 | 177250 | |
| JC 15 | 228970 | 177251 | |
| JC 16 | 228969 | 177252 | |
| JC 17 | 259006 | 187091 | |
| JC 18 | 259007 | 187092 | |
| JC 19 | 259008 | 187093 | |
| JC 20 | 259009 | 187094 | |
| JC 21 | 259010 | 187095 | |
| JC 22 | 259011 | 187096 | |
| CHELAN NO. 1 Amended | 248345 | 175861 | |
| GOOSE 2 Amended | 259554 | 175863 | |
| GOOSE 3 | 227285 | 175864 | |
| GOOSE 4 Amended | 259553 | 175865 | |
| GOOSE 6 | 227282 | 175867 | |
| GOOSE 7 Amended | 259552 | 175868 | |
| GOOSE 8 Amended | 259551 | 175869 | |
| GOOSE 10 Amended | 259550 | 175871 | |
| GOOSE 11 Amended | 259549 | 175872 | |
| GOOSE 12 Amended | 259548 | 175873 | |
| GOOSE 13 | 228028 | 176729 | |
| GOOSE 14 Amended | 259547 | 176730 | |
| GOOSE 15 | 228030 | 176731 | |
| GOOSE 16 | 228031 | 176732 | |
| GOOSE 17 | 228032 | 176733 | |
| GOOSE 18 Amended | 259546 | 176734 | |
| GOOSE 19 Amended | 259545 | 176735 | |
| GOOSE 20 | 228035 | 176736 | |
| GOOSE 21 | 228036 | 176737 | |
| GOOSE 22 | 228037 | 176738 | |
| GOOSE 23 | 228038 | 176739 | |
| GOOSE 24 | 228039 | 176740 | |
| GOOSE 25 | 228040 | 176741 | |
| SOUTH ID 1 Amended | 248725 | 175874 | |
| SOUTH ID 2 Amended | 248726 | 175875 | |
| SOUTH ID 3 Amended | 248727 | 175876 | |
| SOUTH ID 4 Amended | 248717 | 175877 | |
| SOUTH ID 5 Amended | 248715 | 176743 | |
| SOUTH ID 6 Amended | 248716 | 176744 | |
| South ID 7 | 306433 | 218216 | |
| South ID 8 | 306434 | 218217 | |
| South ID 9 | 306435 | 218218 | |
| South ID 10 | 306436 | 218219 | |
| South ID 11 | 306437 | 218220 | |
| South ID 12 | 306438 | 218221 | |
| South ID 13 | 306439 | 218222 | |
| South ID 14 | 306440 | 218223 | |
| OMS-1 | 307477 | 218904 | |
| Chip 1 | 248956 | 184883 | |
| Chip 2 | 248957 | 184884 | |
| Chip 3 Amended | 277465 | 196402 | |
| Chip 4 Amended | 277466 | 196403 | |
| Chip 5 Amended | 277467 | 196404 | |
| Chip 6 Amended | 277468 | 196405 | |
| Chip 7 Amended | 277469 | 196406 | |
| Chip 8 Amended | 277470 | 196407 | |
| Chip 9 Amended | 277471 | 196408 | |
| Chip 10 Amended | 277472 | 196409 | |
| Chip 11 Amended | 277473 | 196410 | |
| Chip 12 Amended | 277474 | 196411 | |
| Chip 13 Amended | 277475 | 196412 | |
| Chip 14 Amended | 277476 | 196413 | |
| Chip 15 Amended | 277477 | 196414 | |
| Chip 16 Amended | 277478 | 196415 | |
| Chip 17 Amended | 277479 | 196416 | |
| Chip 18 Amended | 277480 | 196417 | |
| Sun 20 | 306042 | 218133 | |
| Sun 21 | 306043 | 218134 | |
| Sun 22 | 306044 | 218135 | |
| Sun 23 | 306045 | 218136 | |
| Sun 24 | 306046 | 218137 | |
| Sun 25 | 306047 | 218138 | |
| Sun 26 | 306048 | 218139 | |
| Sun 27 | 306049 | 218140 | |
| Sun 28 | 306050 | 218141 | |
| Sun 29 | 306051 | 218142 | |
| Sun 30 | 306052 | 218143 | |
| Sun 31 | 306053 | 218144 | |
| Sun 32 | 306054 | 218145 | |
| Sun 33 | 306055 | 218146 | |
| Sun 34 | 306056 | 218147 | |
| Sun 35 | 306057 | 218148 | |
| Sun 36 | 306058 | 218149 | |
| Chip 21 Fraction | 306059 | 218113 | |
| Chip 22 Fraction | 306060 | 218114 | |
| Chip 23 | 306025 | 218115 | |
| Chip 24 | 306026 | 218116 | |
| Chip 25 | 306027 | 218117 | |
| Chip 26 | 306028 | 218118 | |
| Chip 27 | 306029 | 218119 | |
| Chip 28 | 306030 | 218120 | |
| Chip 29 | 306031 | 218121 | |
| Chip 30 | 306032 | 218122 | |
| Chip 31 | 306033 | 218123 | |
| Chip 32 | 306034 | 218124 | |
| Chip 33 | 306035 | 218125 | |
| Chip 34 | 306036 | 218126 | |
| Chip 35 | 306037 | 218127 | |
| Chip 36 | 306038 | 218128 | |
| Chip 37 | 306039 | 218129 | |
| Chip 38 | 306040 | 218130 | |
| Chip 39 | 306041 | 218131 | |
| Chip 40 | 307491 | 218895 | |
| DRC NW 1 | 307492 | 218847 | |
| DRC NW 2 | 307493 | 218848 | |
| DRC NW 3 | 307494 | 218849 | |
| DRC NW 4 | 307495 | 218850 | |
| DRC NW 5 | 307496 | 218851 | |
| DRC NW 6 | 307497 | 218852 | |
| DRC NW 7 | 307498 | 218853 | |
| DRC NW 8 | 307499 | 218854 | |
| DRC NW 9 | 307500 | 218855 | |
| DRC NW 10 | 307501 | 218856 | |
| DRC NW 11 | 307502 | 218857 | |
| DRC NW 12 | 307503 | 218858 | |
| DRC NW 13 | 307504 | 218859 | |
| DRC NW 14 | 307505 | 218860 | |
| DRC NW 15 | 307506 | 218861 | |
| DRC NW 16 | 307507 | 218862 | |
| DRC NW 17 | 307508 | 218863 | |
| DRC NW 18 | 307509 | 218864 | |
| DRC NW 19 | 307510 | 218865 | |
| DRC NW 20 | 307511 | 218866 | |
| DRC NW 21 | 307512 | 218867 | |
| DRC NW 22 | 307513 | 218868 | |
| DRC NW 23 | 307514 | 218869 | |
| DRC NW 24 | 307515 | 218870 | |
| DRC NW 25 | 307516 | 218871 | |
| DRC NW 26 | 307517 | 218872 | |
| DRC NW 27 | 307518 | 218873 | |
| DRC NW 28 | 307519 | 218874 | |
| DRC NW 29 | 307520 | 218875 | |
| DRC NW 30 | 307521 | 218876 | |
| DRC NW 31 | 307522 | 218877 | |
| DRC NW 32 | 307523 | 218878 | |
| DRC NW 33 | 307524 | 218879 | |
| DRC NW 34 | 307525 | 218880 | |
| DRC NW 35 | 307526 | 218881 | |
| DRC NW 36 | 307527 | 218882 | |
| DRC NW 37 | 307528 | 218883 | |
| DRC NW 38 | 307529 | 218884 | |
| DRC NW 39 | 307530 | 218885 | |
| DRC NW 40 | 307531 | 218886 | |
| DRC NW 41 | 307532 | 218887 | |
| DRC NW 42 | 307533 | 218888 | |
| DRC NW 43 | 307534 | 218889 | |
| DRC NW 44 | 307535 | 218890 | |
| DRC NW 45 | 307536 | 218891 | |
| DRC NW 46 | 307537 | 218892 | |
| DRC NW 47 | 307538 | 218893 | |
| DRC NW 48 | 307539 | 218894 | |
| EBatt 1 | 307483 | 218896 | |
| EBatt 2 | 307484 | 218897 | |
| EBatt 3 | 307485 | 218898 | |
| EBatt 4 | 307486 | 218899 | |
| EBatt 5 | 307487 | 218900 | |
| EBatt 6 | 307488 | 218901 | |
| EBatt 7 | 307489 | 218902 | |
| EBatt 8 | 307490 | 218903 | |
| OMM-1 | 307478 | 218905 | |
| OMM-2 | 307479 | 218906 | |
| OMN-2 | 307481 | 218908 | |
| OMN-3 | 307482 | 218909 | |
| BTG-1 | 307471 | 218910 | |
| BTG-2 | 307472 | 218911 | |
| BTG-3 | 307473 | 218912 | |
| BTG-4 | 307474 | 218913 | |
| BTG-5 | 307475 | 218914 | |
| BTG-6 | 307476 | 218915 | |
| NFX 17 | 307230 | 218685 | |
| NFX 18 | 307231 | 218686 | |
| NFX 19 | 307232 | 218687 | |
| NFX 20 | 307233 | 218688 | |
| NFX 21 | 307234 | 218689 | |
| NFX 22 | 307235 | 218690 | |
| NFX 23 | 307236 | 218691 | |
| NFX 24 | 307237 | 218692 | |
| NFX 25 | 307238 | 218693 | |
| NFX 30 | 307243 | 218698 | |
| NFX 31 | 307244 | 218699 | |
| NFX 32 | 307245 | 218700 | |
| NFX 33 | 307246 | 218701 | |
| NFX 34 | 307247 | 218702 | |
| NFX 35 | 307248 | 218703 | |
| NFX 36 | 307249 | 218704 | |
| NFX 37 | 307250 | 218705 | |
| NFX 38 | 307251 | 218706 | |
| NFX 42 | 307255 | 218710 | |
| NFX 43 | 307256 | 218711 | |
| NFX 44 | 307257 | 218712 | |
| NFX 45 | 307258 | 218713 | |
| NFX 46 | 307259 | 218714 | |
| NFX 47 | 307260 | 218715 | |
| NFX 48 | 307261 | 218716 | |
| NFX 49 | 307262 | 218717 | |
| NFX 50 | 307263 | 218718 | |
| NFX 56 | 307269 | 218724 | |
| NFX 57 | 307270 | 218725 | |
| NFX 58 | 307271 | 218726 | |
| NFX 59 | 307272 | 218727 | |
| NFX 60 Amended | 307558 | 218728 | |
| NFX 61 | 307274 | 218729 | |
| NFX 62 | 307275 | 218730 | |
| NFX 63 | 307276 | 218731 | |
| NFX 64 | 307277 | 218732 | |
| OMN-1 revised | 315879 | 228322 | |
Appendix 5B
Mining exploration entity or oil and gas exploration entity
quarterly cash flow report
| Name of entity | ||
| ABN | Quarter ended ("current quarter") | |
| 52 007 626 575 | 30 June 2023 | |
| Consolidated statement of cash flows | Current quarter | Year to date (6 months) $US'000 | |
| 1. | Cash flows from operating activities | 82,572 | 140,522 |
| 1.1 | Receipts from customers | ||
| 1.2 | Payments for | - | - |
| |||
| - | - | |
| (50,778) | (106,731) | |
| (5,661) | (8,777) | |
| (1,439) | (3,658) | |
| 1.3 | Dividends received (see note 3) | - | - |
| 1.4 | Interest received | 183 | 811 |
| 1.5 | Interest and other costs of finance paid | (1,827) | (11,183) |
| 1.6 | Income taxes refunded / (paid) | 99 | (628) |
| 1.7 | Other | - | - |
| 1.9 | Net cash from operating activities | 23,149 | 10,356 |
| 2. | Cash flows from investing activities | - | - |
| 2.1 | Payments to acquire or for: | ||
| |||
| - | - | |
| (28,102) | (72,322) | |
| (50) | (365) | |
| - | - | |
| - | - | |
| - | - | |
| 2.2 | Proceeds from the disposal of: | - | - |
| |||
| - | - | |
| 377 | 394 | |
| - | - | |
| - | - | |
| 2.3 | Cash flows from loans to other entities | - | - |
| 2.4 | Dividends received (see note 3) | - | - |
| 2.5 | Other | - | - |
| 2.6 | Net cash used in investing activities | (27,775) | (72,293) |
| 3. | Cash flows from financing activities | - | - |
| 3.1 | Proceeds from issues of equity securities (excluding convertible debt securities) | ||
| 3.2 | Proceeds from issue of convertible debt securities | - | - |
| 3.3 | Proceeds from exercise of options | - | - |
| 3.4 | Transaction costs related to issues of equity securities or convertible debt securities | - | (55) |
| 3.5 | Proceeds from borrowings | - | - |
| 3.6 | Repayment of borrowings | (12,500) | (57,500) |
| 3.7 | Transaction costs related to loans and borrowings | - | - |
| 3.8 | Dividends paid | - | - |
| 3.9 | Other - incl. lease liabilities | (385) | (880) |
| Other - Government grants and tax incentives | - | 167 | |
| Other | - | - | |
| 3.10 | Net cash used in financing activities | (12,885) | (58,268) |
| 4. | Net increase / (decrease) in cash and cash equivalents for the period | ||
| 4.1 | Cash and cash equivalents at beginning of period | 49,837 | 152,647 |
| 4.2 | Net cash from / (used in) operating activities (item 1.9 above) | 23,149 | 10,356 |
| 4.3 | Net cash from / (used in) investing activities (item 2.6 above) | (27,775) | (72,293) |
| 4.4 | Net cash from / (used in) financing activities (item 3.10 above) | (12,885) | (58,268) |
| 4.5 | Effect of movement in exchange rates on cash held | (145) | (261) |
| 4.6 | Cash and cash equivalents at end of period | 32,181 | 32,181 |
| 5. | Reconciliation of cash and cash equivalents | Current quarter | Previous quarter |
| 5.1 | Bank balances | 32,181 | 49,837 |
| 5.2 | Call deposits | - | - |
| 5.3 | Bank overdrafts | - | - |
| 5.4 | Other (provide details) | - | - |
| 5.5 | Cash and cash equivalents at end of quarter (should equal item 4.6 above) | 32,181 | 49,837 |
| 6. | Payments to related parties of the entity and their associates | Current quarter |
| 6.1 | Aggregate amount of payments to related parties and their associates included in item 1 | 194 |
| 6.2 | Aggregate amount of payments to related parties and their associates included in item 2 | - |
| Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of, and an explanation for, such payments. | ||
| 7. | Financing facilities Add notes as necessary for an understanding of the sources of finance available to the entity. | Total facility amount at quarter end | Amount drawn at quarter end |
| 7.1 | Bond Facility1 | 100,000 | 100,000 |
| 7.2 | Secured Revolving Credit Facility2 | 150,000 | 57,500 |
| 7.3 | Other | - | - |
| 7.4 | Total financing facilities | 250,000 | 157,500 |
| 7.5 | Unused financing facilities available at quarter end ($US'000)3 | - | |
| 7.6 | Include in the box below a description of each facility above, including the lender, interest rate, maturity date and whether it is secured or unsecured. If any additional financing facilities have been entered into or are proposed to be entered into after quarter end, include a note providing details of those facilities as well. | ||
On 20 July 2021 the Company completed settlement of a US$100.0 million senior secured bond facility. The bonds were issued by the Company's wholly owned subsidiary, Jervois Mining USA Limited, and are administered by the bond trustee, Nordic Trustee AS. In February 2022, Jervois Mining USA Limited completed the first US$50.0 million drawdown on the bonds, and in July 2022 the second, and final, US$50.0 million drawdown was completed. Key terms:
On 28 October 2021 the Company's wholly owned subsidiaries, Jervois Suomi Holding Oy and Jervois Finland Oy (together, "the Borrowers"), entered into a secured loan facility with Mercuria Energy Trading SA, a wholly owned subsidiary of Mercuria Energy Group Limited, to borrow up to US$75 million. The Borrowers increased the facility to US$150 million through the execution of the Accordion Increase (as contemplated in the facility agreement entered into on 28 October 2021 and as amended and restated on 4 August 2022). Key terms:
| |||
The Borrowers may draw to the lower of the maximum amount or 80% of the collateral value (referred to as the "Maximum Available Amount"), where collateral is defined as the value of the Borrower's inventory and receivables, calculated monthly (reduced to 70% for eligible inventory in Finland exceeding US$75.0 million) and subject to eligibility requirements and associated terms of the agreement. Where the amounts drawn exceed 110% of the Maximum Available Amount (the "Shortfall"), the Borrowers are required to prepay or repay any amount of the facility to ensure that, following such payment, the Shortfall no longer exists. Subject to the Maximum Available Amount, the total unused financing facility may increase in the future to the maximum facility amount of US$150.0 million. | |||
| 8. | Estimated cash available for future operating activities | $US'000 |
| 8.1 | Net cash from / (used in) operating activities (item 1.9) | 23,149 |
| 8.2 | (Payments for exploration & evaluation classified as investing activities) (item 2.1(d)) | (50) |
| 8.3 | Total relevant outgoings (item 8.1 + item 8.2) | 23,099 |
| 8.4 | Cash and cash equivalents at quarter end (item 4.6) | 32,181 |
| 8.5 | Unused finance facilities available at quarter end (item 7.5 and see item 7.6 - footnote 3) | - |
| 8.6 | Total available funding (item 8.4 + item 8.5) | 32,181 |
| 8.7 | Estimated quarters of funding available (item 8.6 divided by item 8.3) | N/A |
| Note: if the entity has reported positive relevant outgoings (i.e., a net cash inflow) in item 8.3, answer item 8.7 as "N/A". Otherwise, a figure for the estimated quarters of funding available must be included in item 8.7. | ||
| 8.8 | If item 8.7 is less than 2 quarters, please provide answers to the following questions: | |
| 8.8.1 Does the entity expect that it will continue to have the current level of net operating cash flows for the time being and, if not, why not? | ||
| Answer: N/A | ||
| 8.8.2 Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful? | ||
| Answer: Yes, in June 2023, the Company announced a fully underwritten US$50.0 million total capital raising, comprising: - US$25.0 million Unsecured Convertible Notes ("Notes") maturing in July 2028 which are convertible into Jervois ordinary shares ("Convertible Notes Offer"). The initial conversion price for the Notes represents a 40% premium to the Entitlement Offer Theoretical Ex Rights Price ("TERP")1 and the Notes carry a 6.5% p.a. coupon; and - US$25.0 million fully underwritten 1 for 3.34 accelerated non-renounceable entitlement offer (the "Entitlement Offer"), undertaken in parallel with the Convertible Notes Offer. The institutional component of the Entitlement Offer was successfully completed, as announced by the Company on 3 July 2023, and the retail component of the Entitlement Offer was successfully completed, as announced by the Company on 21 July 2023. The first tranche of the Notes was completed on 18 July 2023 with the receipt of US$19.9 million (gross). The second tranche of the Notes (US$5.1 million) is anticipated to be issued following Jervois shareholder approval on or about 22 August 2023. TERP (theoretical ex rights price) is the theoretical price at which Jervois' ordinary shares should trade at immediately after the ex-date for the Entitlement Offer based only on the last traded price and issuance of Jervois' ordinary shares at the offer price under the Entitlement Offer. | ||
| 8.8.3 Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis? | ||
| Answer: N/A | ||
| Note: where item 8.7 is less than 2 quarters, all of questions 8.8.1, 8.8.2 and 8.8.3 above must be answered. | ||
Compliance statement
1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters disclosed.
Date: 27 July 2023
Authorised by: Disclosure Committee
(Name of body or officer authorising release)
1 Information on the basis of preparation for the financial information included in this Quarterly Activities Report is set out on page 11
2 TERP (theoretical ex rights price) is the theoretical price at which Jervois' ordinary shares should trade at immediately after the ex-date for the Entitlement Offer based only on the last traded price and issuance of Jervois' ordinary shares at the offer price under the Entitlement Offer.
3 Debt drawn down represents the aggregate of amounts drawn under the company's debt facilities. Amounts represent the nominal loan amounts; balances recorded in the company's financial statements under International Financial Reporting Standards will differ.
4 The number of options represent the number of Jervois shares that will be issued on exercise. The exercise price represents the price to be paid for the Jervois shares when issued.
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