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Jervois Global Limited Quarterly Activities Report and Cashflow to 30 June 2024

31.07.2024  |  The Newswire

Jervois Global Ltd.

ACN: 007 626 575

ASX/TSXV: JRV

OTCQB: JRVMF

Corporate Information

2 - Jervois Global Limited ("Jervois" or the "Company" and, together with its subsidiaries, the "Group") ended the June 2024 quarter with US$21.3 million in cash, US$31.9 million in physical cobalt inventories, and total drawn senior debt of US$144.1 million.

End of June 2024 cash of US$21.3 million was lower than the previous quarter-end balance of US$26.6 million, with continued focus on reducing cobalt working capital at Jervois Finland partially offsetting ongoing holding costs across Jervois' 100%-owned ICO mine site in the U.S. and the São Miguel Paulista ("SMP") nickel-cobalt refinery in São Paulo, Brazil.

The Group's current cash balance is US$14.6 million2. Jervois has replenished cobalt feed inventory in July 2024 to better position the business to satisfy rising customer orders in Q3 2024, particularly new battery orders associated with electric vehicles for sale into the U.S.

The Jervois Finland Working Capital Facility loan balance at 31 July 2024 remains drawn at US$44.1 million (consistent with 30 June 2024). Compression in the value of receivables and inventories during the quarter means that Jervois Finland is utilising a proportion of its cash in its determination of the Collateral Value under the terms of the Working Capital Facility. This requirement to use cash as collateral may limit liquidity available to Jervois for general operational purposes. Pursuant to the transfer of the Jervois Finland Working Capital Facility from Mercuria to the Holder of the Bonds, as announced on 26 July 20243, Jervois is engaging with the Holder to agree a framework to ensure the Group has adequate liquidity until a holistic solution is agreed and implemented. The Bonds were issued by a Jervois U.S. subsidiary, secured by ICO, and guaranteed by Jervois in 2021.

Engagement with lenders and third parties continued throughout the quarter, including due diligence across multiple Company assets. Jervois remains focussed on delivering a solution that provides additional liquidity, achieves a sustainable capital structure, and diversifies the Group's cash generation through transition from reliance on Jervois Finland as the sole operating asset, to a multi-operating asset portfolio over the medium term.

On 9 May 2024, Jervois agreed with the Holder a waiver of all financial covenants (the "Initial Waiver") until 20 July 2024. After the quarter end, in agreement with the Holder and implemented on 23 July 2024, the Initial Waiver of all financial covenants was extended to 20 August 2024 along with a deferral of the interest payment with respect to the Bonds, due on 22 July 2024, to 20 August 2024 (the "Extended Waiver").

Other than the Initial Waiver and the Extended Waiver, which included deferral of the interest payment, there are no changes to the terms of the Bonds, including coupon, security, or guarantee arrangements. The Bonds also continue in the ordinary course to be subject to no principal repayment until the end of their existing five-year term in July 2026.

As at 31 July 2024, neither the Bonds nor the Jervois Finland Working Capital Facility are in default.

Jervois Finland

  • Quarterly revenue: US$36.9 million (Q1 2024: US$39.9 million)

  • Cash flow from operations: US$4.3 million (Q1 2024: -US$3.6 million)

  • Sales volume: 1,163 mt (Q1 2024: 1,239 mt)

  • Production volume: 1,041 mt (Q1 2024: 1,300mt)

Sales and marketing

Jervois Finland produced 1,041 mt and sold 1,163 mt of cobalt in the quarter.

Figure 1: Jervois Finland sales volume by quarter (mt)


Click Image To View Full Size

Sales volumes during the quarter to 30 June 2024 were 6% lower than previous quarter volumes of 1,239 mt. The decrease in sales volumes on the prior quarter reflected continued cyclical softness in demand in end-use segments. Production volumes and product mix remains subject to continuous review and adjustment based on an assessment of end-use demand and considering target inventory levels. Production levels in the quarter were lower than capacity due to the planned maintenance shutdown in May 2024 as well as to achieve alignment with current market demand.

Jervois Finland's sales performance and outlook for key market segments under which Jervois Finland operates are summarised below.

Batteries:

  • Momentum among battery segment customers for Jervois to source non-FEOC cobalt sulphate is growing and has translated into further firm orders across the balance of 2024. This trend is expected to continue and accelerate into 2025.

  • Interest continues from both European and U.S. based electric vehicle OEMs (automakers) for long-term cobalt supply, but timelines remain uncertain, with volumes starting later than previously expected.

  • The U.S. Inflation Reduction Act continues to drive interest in U.S. and other Western supply of battery raw materials, providing a key advantage to Kokkola as the leading global cobalt refinery outside of China.

Chemicals, Catalysts, and Ceramics:

  • Chemicals: Demand continues to be steady in general across key chemical applications.

  • Catalysts: Demand has stabilised in the refinery catalyst segment, albeit at somewhat lower levels against 2023.

  • Ceramics: This segment continues to be impacted by reduced demand and increased competition. Cobalt producers in China are aggressively targeting export markets, resulting in continued low prices. These prices look to remain under pressure throughout the balance of the year as pigment producers are benefiting from increased competition by suppliers.

Powder Metallurgy:

  • Outlook for the remainder of 2024 looks to be stable, but competition in downstream markets (especially from China) continues to weaken demand in all powder metallurgy applications.

  • Automotive, oil and gas production (drilling), general engineering, and construction markets remain weak and are forecast to remain so through to the beginning of 2025.

  • Aerospace is the only market that continues to be strong, and which has a continued positive outlook supported by expansion in both civilian and military sectors.

Sales volume guidance for the 2024 calendar year has been revised lower to 5,100 mt to 5,400 mt (from 5,300 mt to 5,600 mt in prior guidance). Guidance takes account of current expectations on near-term market conditions. Production levels are expected to also be broadly consistent with sales volumes. Jervois maintains significant optionality for future increases in sales volumes when the cobalt market recovers.

Financial performance

Jervois Finland achieved revenue of US$36.9 million in the quarter, an 8% decrease compared to the prior quarter. The decrease was principally due to lower sales volumes, marginally lower realised pricing, and the effect of the annual maintenance shutdown in May 2024.

Cash flow performance

Jervois Finland Cash flow from operations (before interest payments) was US$4.3 million in the quarter. Positive cash flow resulted from effective management of working capital in response to continued cyclically weak cobalt markets. In addition, the business improvement programme at Jervois Finland, introduced in Q4 2023 and implemented in Q1 2024, continued to deliver a positive impact, with operating costs trending lower during the quarter and contributing to positive operating cash flow. Physical cobalt inventories reduced by US$7.4 million from US$39.3 million at 31 March 2024 to US$31.9 million at 30 June 2024. This represented a reduction from 1,281 mt and ~77 days at 31 March 2024 to 1,158 mt and ~69 days at 30 June 2024 (based on a normalised 6,000 mt annual production rate). Jervois is continuing to execute an inventory management strategy aligned to a near-term target range of 90 days or less, in a manner that balances commercial, liquidity, and risk management objectives.

Jervois intends to report financial results for the six months ending 30 June 2024, including Adjusted EBITDA for Jervois Finland, once the half-year financial statements review process has been completed.

Jervois USA

ICO, U.S.

Subsequent to quarter end, Jervois reported results from the first four drillholes as part of its U.S. DoD DPA Title III fully refundable extensional drilling program at ICO's RAM deposit. These drilling results complement those obtained at its 100%-owned Sunshine deposit4,5 under Jervois' US$15 million DoD DPA Title III funding agreement ("DoD Agreement Funding"). Extensional drilling was conducted from a single underground drilling platform positioned within existing underground mine workings at ICO.

RAM drill results to date include:

  • Hole JU24-093: 1.10% cobalt (Co"), 1.18% copper ("Cu"), 0.69 grams per tonne ("g/t") gold ("Au") over a calculated true width ("CTW") of 1.8 metres ("") AND hangingwall (HW") mineralisation of 0.48% Co, 1.74% Cu, 1.13 g/t Au over a CTW of 3.8m.

  • Hole JU24-095: 0.18% Co, 0.34% Cu, 0.10 g/t Au, over a CTW of 4.8m AND HW mineralization of 0.38% Co, 0.22% Cu, 0.27 g/t Au over a CTW of 2.7m AND footwall mineralisation of 0.43% Co, 0.99% Cu, 0.62 g/t Au over a CTW of 1.5m.

  • Hole JU24-096: 0.48% Co, 0.60% Cu, 0.86 g/t Au over a CTW of 2.1m AND HW mineralisation of 1.40% Co, 1.38% Cu, 2.23 g/t Au over a CTW of 5.2m, including 3.3m CTW at 2.26% Co, 2.06% Cu, 3.60 g/t Au

  • Hole JU24-097: 0.61% Co, 1.35% Cu, 1.51 g/t Au over a CTW of 5.5m including 3.9m CTW at 0.75% Co, 1.56% Cu, 1.85 g/t Au.

Results from the initial four drillholes of Jervois' RAM extensional drilling campaign under its DoD Agreement Funding have yielded positive indication of resource extension both along strike and at depth. Drillhole JU24-097 provides especially positive indication of the potential for extension within the RAM deposit with its significant mineralisation and width representing the deepest intersection of the MMH to date at ICO. Additionally, the development of significant HW intercepts across 2024 extensional drilling provides further opportunity for cobalt resource growth potential.

Recent drilling results have demonstrated down-dip grade continuity along an interpreted orientation favourable to continued exploration by the Company within its contiguous claim boundaries. This updated interpretation of the MMH in the southern extents of the RAM deposit provides additional pathways to resource growth, previously believed to be limited to deep exploratory drilling, with additional moderate-depth extensional drilling at ICO. Greater continuity of HW mineralisation is also observed along this mineralised orientation based upon the 2024 drilling programme, indicating further resource growth opportunity.

Jervois' 2024 extensional drilling has successfully displayed continuity of prospective mineralisation across all completed holes with step-out intercepts ranging between 100m to 175m from the nearest neighbouring pre-2024 intercept laterally and consolidates mineralisation confidence across greater than 450m down-dip along and beyond existing 2023 MRE margins.

Full results and details are available in the ASX announcement titled "Extension drilling confirms resource growth potential at ICO", dated 31 July 20246.Jervois continued to work with its primary regulator, the U.S. Forest Service, on recommencing underground activities. Other activities in the quarter focussed on continued care and maintenance at ICO, including water treatment and management of other environmental obligations.

Executive General Manager - Commercial, Mr. Wayde Yeoman, was invited to present to a U.S. House of Representatives roundtable in Washington D.C. on 11 July 2024. The session was organised by the seven-member Critical Minerals Policy Working Group of the U.S. House Select Committee on the Strategic Competition Between the U.S. and the Chinese Communist Party (the "Congressional Committee").

Mr. Yeoman presented to the working group on critical minerals of the Congressional Committee, providing an overview of Jervois' business, including ICO, the cobalt market and China's participation therein, critical mineral stockpiling, and the Congressional Committee's proposal for a Resilient Resource Reserve.

Group Manager - ESG, Dr. Jennifer Hinton, was also invited to present to the same working group on critical minerals of the Congressional Committee at a second U.S. House of Representatives roundtable in Washington D.C. on 23 July 2024. Dr. Hinton presented in a session focused on environmental stewardship, forced labour, sustainability, governance and corruption in the production of critical minerals, including cobalt.

The proposed Resilient Resource Reserve is designed to insulate U.S. critical mineral producers, including cobalt, from Chinese induced price volatility and manipulation. Jervois continues to engage with the Congressional Committee and U.S. lawmakers with regard to next legislative steps.

U.S. cobalt refinery study

The U.S. cobalt refinery bankable feasibility study ("BFS") is being conducted with AFRY USA LLC, with a design capacity of 6,000 mt per annum of cobalt in sulphate form, suitable for electric vehicles. The facility is expected to supply sufficient cobalt for approximately 1.2 million electric vehicles per annum. The cobalt refinery BFS is fully refundable through the existing DoD DPA Title III funding agreement.

During the quarter, Jervois signed a non-binding explorative memorandum of understanding with Global Tungsten & Powders LLC ("GTP") to jointly evaluate GTP making a minority equity investment in Jervois' proposed U.S. cobalt refinery.

GTP is an existing cobalt customer of Jervois and is expected to provide recycling feedstock for the U.S. refinery as part of its potential equity investment. In addition, Jervois' U.S. cobalt refinery could potentially be co-located at GTP's existing facilities in Towanda, Pennsylvania. Jervois' two short listed sites are in Pennsylvania and Louisiana.

SMP nickel and cobalt refinery, Brazil

The restart of SMP remains paused while the Company is continuing to evaluate funding options with existing capital providers and third parties.

Jervois notes that key Western markets for electrolytic nickel remain tight, particularly in relation to the demand for non-Chinese, non-Russian nickel products. The recent announcement by BHP of the planned closure of its Kwinana refinery in Western Australia is favourable for physical premia. SMP is expected to be well positioned to participate in these key markets should Jervois be successful in restarting the facility.

Environmental, social, governance ("ESG")

Jervois released its 2023 Modern Slavery Statement (the "Statement") via regulators in Canada and Australia and on its website in mid-June 2024. The Statement outlines the measures taken to identify, prevent, and mitigate modern slavery risks in its business and operations, inclusive of related policies, standards, and practices.

In conjunction with Jervois' ongoing supply chain due diligence programme, Group Manager - ESG, Dr. Jennifer Hinton, visited selected operations in the Democratic Republic of the Congo in April 2024. The main aims were to deepen the Company's due diligence on these sites, including in light of recent reports on the industry related to operational ESG practices, including those concerning supplier management.

Engagement with the Cobalt Institute ("CI"), including its Responsible Sourcing and Sustainability Committee ("RESSCOM") and Government Affairs Committee continues. Dr. Hinton continues to chair the RESSCOM committee, and a number of key Company representatives continue to be in RESSCOM subcommittees and working groups related to ESG Standards, the Circular Economy, decarbonisation, ASM, and child labour. Among inputs, submissions to CI Position Papers on ASM and ESG Standards continue.

On 4 June 2024, the Company's Chief Executive Officer, Mr. Bryce Crocker, presented at an Australian Government AusTrade Europe Business Mission in Paris, France.

On 5 June 2024, the Company's Chief Financial Officer, Mr. James May, participated in a panel discussion on 'Investing in a Sustainable Future' as part of the AusIMM Thought Leadership Series in Melbourne, Australia.

Exploration and development expenditure

No material cash expenditure on exploration and development was spent 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).

By order of the Board

Bryce Crocker

Chief Executive Officer

For further information, please contact:

Investors and analysts:

Alicia Brown

Group Manager External Affairs

Jervois Global Limited

alicia.brown@jervoisglobal.com

Media:

Nathan Ryan

NWR Communications

nathan.ryan@nwrcommunications.com.au

Mobile: +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 the cobalt markets, partnership for group operations, strengthening of the balance sheet, operations at Jervois Finland, U.S. refinery studies, reimbursement of funds to Jervois Mining USA Limited by the DoD, timing of restart of SMP refinery, 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.

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

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

Jervois Global Limited

ABN

Quarter ended ("current quarter")

52 007 626 575

30 June 2024

Consolidated statement of cash flows

Current quarter
$US'000

Year to date

(6 months)

$US'000

1.

Cash flows from operating activities

35,602

76,138

1.1

Receipts from customers

1.2

Payments for

-

-

  1. (a)exploration evaluation

  1. (b)production

(31,685)

(76,248)

  1. (c)site suspension

(2,545)

(5,617)

  1. (d)staff costs7

(2,270)

(4,786)

  1. (e)corporate administration

(525)

(1,438)

1.3

Dividends received (see note 3)

-

-

1.4

Interest received

22

321

1.5

Interest and other costs of finance paid

(1,760)

(9,397)

1.6

Income taxes paid

(21)

(50)

1.7

Other:

  1. (a)project costs8

  2. (b)government grants

  3. (c)other income

(1,441)

499

137

(2,042)

1,024

142

1.9

Net cash from / (used in) operating activities

(3,987)

(21,953)

2.

Cash flows from investing activities

-

-

2.1

Payments to acquire or for:

  1. (a)entities

  1. (b)tenements

-

-

  1. (c)property, plant, and equipment - incl. assets under construction

(3,715)

(5,384)

  1. (d)exploration evaluation

(28)

(131)

  1. (e)acquisition of subsidiaries

-

-

  1. (f)transfer tax on acquisition

-

-

  1. (g)other non-current assets

-

-

2.2

Proceeds from the disposal of:

-

-

  1. (a)entities

  1. (b)tenements

-

-

  1. (c)property, plant, and equipment

-

-

  1. (d)investments

-

-

  1. (e)other non-current assets

-

-

2.3

Cash flows from loans to other entities

-

-

2.4

Dividends received (see note 3)

-

-

2.5

Other - government grants and tax incentives

2,702

4,158

2.6

Net cash from / (used in) investing activities

(1,041)

(1,357)

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

-

-

3.5

Proceeds from borrowings

-

-

3.6

Repayment of borrowings

-

(46)

3.7

Transaction costs related to loans and borrowings

-

-

3.8

Dividends paid

-

-

3.9

Other - incl. lease liabilities

(317)

(696)

Other

-

-

3.10

Net cash from / (used in) financing activities

(317)

(742)

4.

Net increase / (decrease) in cash and cash equivalents for the period

4.1

Cash and cash equivalents at beginning of period

26,623

45,368

4.2

Net cash from / (used in) operating activities (item 1.9 above)

(3,987)

(21,953)

4.3

Net cash from / (used in) investing activities (item 2.6 above)

(1,041)

(1,357)

4.4

Net cash from / (used in) financing activities (item 3.10 above)

(317)

(742)

4.5

Effect of movement in exchange rates on cash held

71

33

4.6

Cash and cash equivalents at end of period

21,349

21,349

5.

Reconciliation of cash and cash equivalents
at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts

Current quarter
$US'000

Previous quarter
$US'000

5.1

Bank balances

21,349

26,623

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)

21,349

26,623

6.

Payments to related parties of the entity and their associates

Current quarter
$US'000

6.1

Aggregate amount of payments to related parties and their associates included in item 1

184

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
Note: the term "facility' includes all forms of financing arrangements available to the entity.

Add notes as necessary for an understanding of the sources of finance available to the entity.

Total facility amount at quarter end
$US'000

Amount drawn at quarter end
$US'000

7.1

Bond Facility1

100,000

100,000

7.2

Secured Revolving Credit Facility2

150,000

44,105

7.3

Unsecured Convertible Notes3

25,000

25,000

7.4

Total financing facilities

275,000

169,105

7.5

Unused financing facilities available at quarter end ($US'000)4

-

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.

  1. Bond Facility - US$100.0 million:

On 20 July 2021 the Company completed settlement of a US$100.0 million Senior Secured Bonds 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:

  • Issuer: Jervois Mining USA Limited (wholly owned subsidiary of the Company).

  • Maturity: 5-year tenor with a maturity date of 20 July 2026.

  • Original issue discount of 2%.

  • Coupon rate: 12.5% per annum with interest payable bi-annually.

  • No amortisation - bullet payment on maturity.

  • Non-callable for 3 years, after which callable at par plus 62.5% of coupon, declining rateably to par in year 5.

  • Transaction security: First priority security over all material assets of the Issuer, pledge of all the shares of the Issuer, intercompany loans.

  1. Secured Revolving Credit Facility - US$150.0 million:

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 ("Mercuria"), 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).

In July 2024, the facility was transferred by Mercuria to the majority bondholder of the Idaho Cobalt Operations US$100.0 million Senior Secured Bonds (refer to ASX announcement entitled "Transfer of Jervois Finland Working Capital Facility", released on 26 July 2024, for further information).

Key terms:

  • Borrowers: Jervois Suomi Holding Oy and Jervois Finland Oy (wholly owned subsidiaries of the Company).

  • Maturity: rolling facility to 31 December 2024.

  • Interest rate: SOFR + 5.0% per annum.

  • Transaction security: First priority security over all material assets of Jervois Finland, including inventory, receivables, collection account, and shares in Jervois Finland.

  1. Unsecured Convertible Notes

On 28 June 2023, the Company entered into a Subscription Agreement for the issuance of US$25.0 million of Unsecured Convertible Notes (the "Notes") maturing in July 2028 (Tranche 1) and August 2028 (Tranche 2), respectively, and which are convertible into Jervois ordinary shares. The initial conversion price for the Notes is US$0.0605 and the Notes carry a 6.5% per annum coupon, payable in arrears through either settlement in cash or payment in kind. The gross proceeds were received under two tranches of US$19.9 million and US$5.1 million on 20 July 2023 and 31 August 2023, respectively.

  1. Unused limit of Secured Revolving Credit Facility:

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)

(3,987)

8.2

(Payments for exploration & evaluation classified as investing activities) (item 2.1(d))

(28)

8.3

Total relevant outgoings (item 8.1 + item 8.2)

(4,015)

8.4

Cash and cash equivalents at quarter end (item 4.6)

21,349

8.5

Unused finance facilities available at quarter end (item 7.5)

-

8.6

Total available funding (item 8.4 + item 8.5)

21,349

8.7

Estimated quarters of funding available (item 8.6 divided by item 8.3)

5.3

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: N/A

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: 31 July 2024

Authorised by: Disclosure Committee

(Name of body or officer authorising release - see note 4)

Notes

1. This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity's activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.

2. If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. If this report has been authorised for release to the market by your board of directors, you can insert here: "By the board". If it has been authorised for release to the market by a committee of your board of directors, you can insert here: "By the [name of board committee - e.g., Audit and Risk Committee]". If it has been authorised for release to the market by a disclosure committee, you can insert here: "By the Disclosure Committee".

5. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations, the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.

1 Drawn senior debt represents the aggregate of amounts drawn under the Company's senior debt facilities (excludes Unsecured Convertible Notes that mature in July/August 2028). Amounts represent the nominal loan amounts; balances recorded in Jervois' financial statements under International Financial Reporting Standards will differ.

2 Cash balance is as of 28 July 2024.

3 See ASX announcement "Transfer of Jervois Finland Working Capital Facility" dated 26 July 2024.

4 See ASX announcement "Jervois completes U.S. Department of Defense reimbursed drilling at ICO's Sunshine deposit" dated 30 January 2024.

5 See ASX announcement "Jervois completes maiden JORC Resource for Sunshine at ICO, USA" dated 2 April 2024.

6 In accordance with ASX listing rule 5.23.2, Jervois confirms it is not aware of any new information or data that materially affects the information included in the relevant market announcements referred to above and that the assumptions contained therein continue to apply and have not materially changed.

7 Excludes Jervois Finland staff costs which are included in 1.2(b) production.

8 Relates to the cobalt refinery study currently being undertaken in the United States (100% reimbursable by the United States Department of Defense under a Defence Production Act Title III award), as well as Group business development costs.

Copyright (c) 2024 TheNewswire - All rights reserved.


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Bergbau
867183
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