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Jervois Global Limited Quarterly Activities Report to 31 March 2024

30.04.2024  |  The Newswire
30 April 2024 (Australia) - ASX/TSX-V: JRV/ OTCQB: JRVMF

Jervois Global Ltd.

ACN: 007 626 575

ASX/TSXV: JRV

OTCQB: JRVMF

Corporate Information

2,703M Ordinary Shares

72.1M Options

23.4M Performance Rights

Non-Executive Chairman

Peter Johnston

CEO and Executive Director

Bryce Crocker

Non-Executive Directors

Brian Kennedy
Michael Callahan

David Issroff

Daniela Chimisso dos Santos

Company Secretary

Alwyn Davey

Contact Details

Suite 2.03,

1-11 Gordon Street
Cremorne

Victoria 3121

Australia

P: +61 (3) 9583 0498

E: admin@jervoisglobal.com

W: www.jervoisglobal.com

Highlights

Jervois Finland:

  • Q1 2024 Adjusted EBITDA1 of US$0.7 million.

  • Fourth successive quarter of positive Adjusted EBITDA; achieved in an environment of cyclically weak cobalt markets and interruptions from strikes at the Port of Kokkola.

  • Q1 2024 cobalt sales of 1,239 metric tonnes ("mt"); full year guidance unchanged at 5,300 mt to 5,600 mt.

Idaho Cobalt Operations ("ICO"), United States ("U.S."):

  • Initial JORC Mineral Resource Estimate ("MRE") for Sunshine deposit of Inferred Resources of 0.52 million mt at 0.50% cobalt, 0.68% copper, and 0.49 g/t gold (0.25% Co cut-off).

  • Inferred Resources underline Sunshine's future potential as additional strategic, domestic U.S. cobalt supply which could be processed at ICO's existing surface infrastructure.

  • RAM deposit underground drilling undertaken, three drill holes complete, assays pending.

São Miguel Paulista ("SMP") nickel and cobalt refinery, Brazil:

  • Ongoing engagement with parties for project-level funding for SMP restart.

Corporate:

  • March 2024 quarter-end cash balance of US$26.6 million, US$39.3 million physical cobalt inventories, and drawn senior debt of US$144.1 million2.

  • Asset partnering initiatives to strengthen balance sheet under review in conjunction with lenders.

Advancing on priorities

Jervois Global Ltd. ("Jervois" or the "Company") continued to focus on initiatives to ensure its business remains financially sustainable at historically low cobalt prices caused by the People's Republic of China ("PRC") oversupply from the Democratic Republic of the Congo ("DRC") and Indonesia.

Priorities and key milestones delivered in the quarter:

  • Maximise margin at Jervois Finland and deliver operational improvements:

  • US$0.7 million Adjusted EBITDA in Q1 2024. Cost reductions and delivery of improvement initiatives continuing to progress resilience to cobalt price weakness.

  • Corporate level organisational restructure, with an effective 30% reduction of senior management positions due to redundancy and transition to part time; Non-Executive Directors' fees reduced by 30%.

  • Execute U.S. DoD funded US$15.0 million ICO drilling programme and U.S. cobalt refinery studies3

  • Surface drilling completed at the Sunshine deposit with an updated MRE published.

  • Underground drilling at the RAM deposit commenced, initial three holes completed, assays pending.

  • Two sites shortlisted for U.S. based cobalt refinery in Louisiana and Pennsylvania.

  • Advance debt and partner financing process at SMP:

    • Engagement with parties for project-level funding for the SMP restart continued.

  • Review partnership opportunities to crystalise and demonstrate value:

    • Initiatives across all assets are continuing - objective is to strengthen balance sheet and support strategic delivery.

    • Lenders are actively engaged in asset based partnering initiatives.

Jervois Finland

  • Quarterly revenue: US$39.9 million (Q4 2023: US$38.7 million)

  • Cash flow from operations: -US$3.6 million (Q4 2023: US$4.7 million)

  • Adjusted EBITDA4 US$0.7 million (Q4 2023: US$0.5 million)

  • Sales volume: 1,239 mt (Q4 2023: 1,098 mt)

  • Production volume: 1,300 mt (Q4 2023: 1,102mt)

Sales and marketing

Jervois Finland produced 1,300 mt and sold 1,239 mt of cobalt in the quarter.

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


Click Image To View Full Size

Sales volumes to 31 March 2024 were 1,239 mt, 13% higher than previous quarter volumes of 1,098 mt. The increase in sales volumes on the prior quarter reflected an uptick in demand in end-use segments, particularly catalysts, along with additional cobalt sulphate sales into the nascent, but rising, battery market. 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. Jervois Finland's sales performance and outlook for key market segments under which Jervois Finland operates are summarised below.

Batteries:

  • Current demand in this sector has improved from 2023 and looks to stabilise and meet expectations for the balance of 2024.

  • Interest continues from both European and U.S. based electric vehicle (EV") OEMs (automakers) for long-term cobalt supply, with volumes starting in 2025 and rising significantly thereafter.

  • The U.S. Inflation Reduction Act (particularly the associated Foreign Entity of Concern restrictions on Chinese links to secure U.S. EV tax credits) 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 stable in main chemical applications (copper electrowinning, coatings, and rubber adhesion).

  • Catalysts: There are signs of a slowdown in demand from the oil and gas segment (processing / refining) as catalyst chemistries change.

  • Ceramics: Continued reduced demand and rising competition (especially ex-PRC) in this sector, linked to lower end-use demand in the housing and construction sector. In particular, weak construction markets in China are causing Chinese cobalt suppliers to aggressively access export markets, driving down prices. Demand is volatile, and consumers often wait for favourable market pricing. Prices in ceramics look to remain under pressure though the coming months, with limited ESG considerations impacting buyer behaviour.

Powder Metallurgy:

  • Competition in downstream markets (especially from PRC) continues to impact demand in all powder metallurgy applications.

  • Automotive, oil and gas production (drilling), general engineering, and construction have not improved.

  • Aerospace continues to be a bright spot, with the forecast remaining positive.

Financial performance

Jervois Finland achieved revenue of US$39.9 million in the quarter, a 3% increase compared to the prior quarter. The increase was principally due to higher sales volumes, although partially offset by lower realised pricing. The business improvement programme, introduced in Q4 2023, started to deliver positive impact, with operating costs trending lower in the quarter.

The cyclical weakness in cobalt prices persisted in the quarter due, in part, to continued market oversupply conditions instigated by the PRC, as outlined earlier. March 2024 sales were affected by strikes, including at the Port of Kokkola, which was closed from early March to early April 2024.

Adjusted EBITDA

Jervois Finland achieved Adjusted EBITDA in the first quarter of US$0.7 million, continuing a turnaround that commenced in the second quarter of 2023. Q1 2024 was the fourth consecutive quarter of positive Adjusted EBITDA, and the result is consistent with Jervois Finland's historical performance where the business model supports generation of a positive margin in an environment of cyclically weak, but stable, cobalt prices.

Figure 2: Jervois Finland Adjusted EBITDA by quarter (US$M, unaudited)

Both the cobalt chemicals and powder plants continued to perform well in the quarter, despite the port strikes, with internal targets for safety, production efficiency and product quality all met. Near-term focus for Jervois Finland remains on operational performance, cash generation, and risk management.

Mitigating measures were implemented in response to the port strikes during the quarter that offset much of the impact of interruptions associated with the strike. This included using alternative logistics routes for shipment of finished goods. The strikes have, however, resulted in temporary constraints in the availability of cobalt raw materials feed that are adversely impacting plant production levels in April 2024. Accordingly, lower than average production levels in April 2024, together with the annual maintenance shutdown in May 2024, will lead to lower-than-average volumes across the second quarter. Organisation optimisation at Jervois Finland continued to advance, with a 5% reduction in workforce and ~US$1.1 million (~€1.0 million) in annual payroll cost savings expected across the first half of 2024.

A reconciliation between Adjusted EBITDA, EBITDA, and Net Profit after Tax ("NPAT") for Jervois and Jervois Finland is included on page 11.

Cash flow performance

Cash flow from operations (before interest payments) was -US$3.6 million in the quarter.
This was primarily driven by working capital movements in early Q1 2024 and further exacerbated by the Finnish ports strikes which resulted in lower than budgeted sales in the quarter. Physical cobalt inventories reduced slightly by US$1.4 million from US$40.7 million at 31 December 2023 to US$39.3 million at 31 March 2024. This represented a reduction from 1,297 mt and ~78 days at 31 December 2023 to 1,281 mt and ~77 days at 31 March 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 liquidity and risk management objectives.

Jervois USA

Idaho Cobalt Operations ("ICO"), U.S.

Jervois successfully delivered an inaugural JORC-compliant Mineral Resource Estimate ("MRE") for the Sunshine historic resource during the quarter, following 1,100 metres of initial surface drilling. The Sunshine deposit is a historic resource, located a short distance from the mill and concentrator facilities at ICO. ICO also hosts the main RAM deposit upon which initial mine development was based.

Sunshine's MRE was completed in accordance with the Australian JORC Code 2012, the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") definition standards and best practice guidelines (2014, 2018), and is reported in accordance with the Canadian Securities Administration's National Instrument ("NI") 43-101.

The Sunshine MRE was fully funded by the U.S. DoD under the DPA Title III US$15.0 million award ("Agreement Funding")5, signed in June 2023. The Agreement Funding is under the Manufacturing Capability Expansion and Investment Prioritization office of the Assistant Secretary of Defense for Industrial Base Policy using the U.S. DPA Title III authorities and utilises funds from the Additional Ukraine Supplemental Appropriations Act.

The Sunshine MRE represents the first completed objective of the programme under the DoD Agreement Funding to advance U.S. cobalt supply chain security.

Table 1: Sunshine Inferred Mineral Resource

2024 Sunshine MRE

Co cut-off (%)

Metric

tonnes

Co (%)

Co (lbs)

Cu (%)

Cu (lbs)

Au (g/t)

Au (Oz*)

0.15

750,000

0.41

6,770,000

0.78

13,010,000

0.46

11,110

0.20

620,000

0.46

6,280,000

0.71

9,750,000

0.48

9,550

0.25

520,000

0.50

5,750,000

0.68

7,770,000

0.49

8,210

0.30

400,000

0.57

5,030,000

0.57

5,010,000

0.51

6,550

0.35

320,000

0.63

4,470,000

0.50

3,540,000

0.52

5,330

Notes:

  1. Mr. Andrew Turner, P.Geol. of APEX Geoscience Ltd., a Qualified Person as defined by NI 43-101 and a Competent Person as defined by JORC, is responsible for the completion of the inaugural Sunshine mineral resource estimation, with an effective date of 31 March 2024.

  2. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

  3. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues.

  4. The Inferred Mineral Resource in this estimate has a lower level of confidence than that applied to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of the Inferred Mineral Resource could potentially be upgraded to an Indicated Mineral Resource with continued exploration.

  5. The Mineral Resources were estimated in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum, CIM Standards on Mineral Resources and Reserves, Definitions (2014) and Best Practices Guidelines (2019) prepared by the CIM Standing Committee on Reserve Definitions and adopted by the CIM Council.

  6. The Sunshine cut-off grade of 0.25% Co is based on an estimated process cost and GA cost of US$154.00/t, due to narrow mineralised horizons, and metal prices of US$25.00/lb Co, US$3.00/lb Cu, and US$1,750/troy oz Au, with process recoveries of 91.0% Co, 95.4% Cu, and 84.9% Au. An average contribution of 21% to Co payable values from Cu and Au has been assumed based upon the relative concentrations of the payable metals within the reported resources.

  7. The reported mineral resources are constrained by manually created wireframe solids (mineable shapes) that encapsulate contiguous blocks demonstrating reasonable prospects for eventual economic extraction within the mineable shapes.

More details on the Sunshine MRE can be found in the ASX announcement dated 11 April 20246.

With the successful completion of its Sunshine resource verification drilling and MRE, Jervois' DPA Title III efforts during the quarter switched to a focus on expanding the Indicated and Inferred depth continuity of the RAM MRE down-dip of the deposit's central zone and along strike to the north.

Underground development of exploration drill stations has progressed, with multiple stations now available. Underground drilling rigs and crews successfully mobilised to ICO in March 2024 to commence the extensional drilling initiatives7, with three drill holes complete, and assays pending.

After the quarter end, on Friday 26 April 2024, Jervois received a request from the DoD to stop work under the Agreement Funding pending resolution of unspecified environmental regulatory concerns. Jervois is complying and is engaging with the DoD to seek clarification.

U.S. cobalt refinery study

During the quarter, progress continued on site selection, basic engineering, and a bankable feasibility study ("BFS") for a U.S. domestic cobalt refinery, with works fully reimbursed under the previously outlined DoD Agreement Funding. During the quarter, Jervois shortlisted two locations - in Pennsylvania and Louisiana - with negotiations to host a U.S. cobalt refinery. Jervois also advanced engineering, environmental, and economic evaluations as part of the BFS which is led by AFRY USA LLC.

Jervois' proposed U.S. cobalt refinery will produce cobalt sulphate, for use primarily in EV batteries, which is not produced in the U.S. today. Based on projected U.S. lithium-ion battery chemistries, the refinery, once operational, is expected to be capable of supplying sufficient cobalt for about 1.2 million EVs each year.

Based on cobalt volume requirement guidance from existing and future battery customers within the auto supply chain, Jervois expects that U.S. cobalt sulphate demand will rise sharply with increased uptake of EVs across the latter part of this decade. Based on Jervois' ongoing negotiations with OEM (automaker) customers, including those in the U.S., OEM projected cobalt orderbooks are expected to expand rapidly from 2025.

São Miguel Paulista ("SMP") nickel and cobalt refinery, Brazil

Partner financing opportunities at SMP continued to progress, with parties continuing to engage on project-level funding for the SMP restart project.

Nico Young nickel-cobalt project, New South Wales, Australia

In light of recent volatility affecting nickel markets, particularly producers in Australia subject to PRC competition from Indonesia, Jervois has ended the formal divestment process for Nico Young. Jervois has historically invested >A$20 million in Nico Young. It is a strategic future source of Western nickel and cobalt should differential ESG and pricing standards be applied by either customers or governments in the future.

Corporate activities

Liquidity and balance sheet

Cash flow utilisation in Q1 2024 included the semi-annual interest payment on the ICO Senior Secured Bonds, paid in January 2024, working capital movements at Jervois Finland, and holding costs across ICO and SMP. Jervois ended the March 2024 quarter with US$26.6 million in cash, US$39.3 million in physical cobalt inventories in Jervois Finland, and total drawn senior debt of US$144.1 million.

Asset partnering initiatives to strengthen balance sheet are being reviewed in conjunction with lenders. Significant work has been completed with high-quality potential counterparties on asset-level investment opportunities since mid-2023. Several third parties have been advanced.

A key objective of the review is to better balance ownership across the portfolio, alleviating pressure on Jervois' balance sheet, and to provide liquidity that supports progression toward Jervois' goal of achieving a portfolio with three cash generating assets over the medium term, underpinned by a durable capital structure.

Organisational restructure

Jervois announced an organisational restructure in early March 2024, which included reduced senior corporate management roles, with 30% of full-time positions removed via either redundancies or executives transitioning to part-time. Jervois' Non-Executive Directors also reduced their fees by 30%, effective 1 February 2024. No awards under the Company's Short Term Incentive Plan were made to the Chief Executive Officer, executive, and corporate management team. Jervois has also frozen annual salary increases (generally linked to inflation) for 2024 across the corporate group, and at its sites, where legally permissible.

Environmental, social, governance ("ESG")

Dr. Jennifer Hinton (Group Manager - ESG) was invited by the EU to represent Jervois on the "Clean Transition Dialogue on Critical Raw Materials" held at Berlaymont in Brussels on 23 February 2024. The dialogue, chaired by Mr. Maros S?efc?ovic? (Executive Vice President of the European Commission), brought together 25 high-level representatives from the private sector, financial institutions, and social partners to discuss how to create a conducive, competitive business environment across the entire value chain required for the European Green Deal.

In conjunction with Jervois' responsible supply chain due diligence programme, Dr. Hinton also visited selected industrial, large-scale operations in the DRC during April 2024.

Engagement with the Cobalt Institute, including its Responsible Sourcing and Sustainability Committee ("RESSCOM") and Government Affairs Committee continues.

Exploration and development expenditure

In relation to the DoD funded surface drilling campaign at ICO, US$0.1 million was incurred during the quarter (funded by the DoD). No other 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 Ltd.

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 to partnership for group operations, operations at Jervois Finland, drilling to be undertaken at ICO, 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.

Basis of preparation of financial information

Historical and forecast financial information

Financial information is prepared under Jervois Global Group accounting policies, which conform with Australian Accounting Standards 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.

EBITDA for historical periods is presented as net income after adding back tax, interest, depreciation, and extraordinary items and is a non-IFRS/non-GAAP measure.

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, fair value adjustments on financial instruments, and one-off costs related to post-acquisition integration.

Refer to the table below for a reconciliation of NPAT to EBITDA and 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

Jervois Global Ltd.

ABN

Quarter ended ("current quarter")

52 007 626 575

31 March 2024

Consolidated statement of cash flows

Current quarter
$US'000

Year to date

(3 months)

$US'000

1.

Cash flows from operating activities

40,536

40,536

1.1

Receipts from customers

1.2

Payments for

-

-

  1. (a)exploration evaluation

  1. (b)production

(44,563)

(44,563)

  1. (c)site suspension

(3,072)

(3,072)

  1. (d)staff costs8

(2,516)

(2,516)

  1. (e)corporate administration

(913)

(913)

1.3

Dividends received (see note 3)

-

-

1.4

Interest received

299

299

1.5

Interest and other costs of finance paid

(7,637)

(7,637)

1.6

Income taxes paid

(29)

(29)

1.7

Other:

  1. (a)project costs9

  2. (b)government grants

  3. (c)other income

(601)

525

5

(601)

525

5

1.9

Net cash from / (used in) operating activities

(17,966)

(17,966)

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

(1,669)

(1,669)

  1. (d)exploration evaluation

(103)

(103)

  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

1,456

1,456

2.6

Net cash from / (used in) investing activities

(316)

(316)

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)

(46)

3.7

Transaction costs related to loans and borrowings

-

-

3.8

Dividends paid

-

-

3.9

Other - incl. lease liabilities

(379)

(379)

Other

-

-

3.10

Net cash from / (used in) financing activities

(425)

(425)

4.

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

4.1

Cash and cash equivalents at beginning of period

45,368

45,368

4.2

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

(17,966)

(17,966)

4.3

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

(316)

(316)

4.4

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

(425)

(425)

4.5

Effect of movement in exchange rates on cash held

(38)

(38)

4.6

Cash and cash equivalents at end of period

26,623

26,623

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

26,623

45,368

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)

26,623

45,368

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

206

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)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.

  1. Bond Facility - US$100.0 million:

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:

  • 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, 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:

  • 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)

(17,966)

8.2

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

(103)

8.3

Total relevant outgoings (item 8.1 + item 8.2)

(18,069)

8.4

Cash and cash equivalents at quarter end (item 4.6)

26,623

8.5

Unused finance facilities available at quarter end (item 7.5)

-

8.6

Total available funding (item 8.4 + item 8.5)

26,623

8.7

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

1.5

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: No, the net cash outflow from operating activities in Q1 2024 included the semi-annual interest payment of US$6.25 million on the Bond Facility, which covers a period of six months. Management is continuing to implement cost saving and cash generation initiatives across the Group. Recent initiatives delivered included an organisational restructure (see ASX announcement "Jervois Organisational Restructure" released on 7 March 2024).

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, as publicly announced, the entity is advancing engagement with third parties on strategic financing initiatives, focussed on equity partnerships at one or more of its core assets. Jervois continues to assess and negotiate terms with third parties, in conjunction with advisers. The entity will update the market on the status of these transactions as required and in accordance with its continuous disclosure obligations.

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: Yes, on the basis of those items discussed at 8.8.1 and 8.8.2 above.

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: 30 April 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 See page 11 for the definition of Adjusted EBITDA and basis of preparation.

2 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.

3 After the quarter end, on Friday 26 April 2024, Jervois received a request from the DoD to stop work under the Agreement Funding pending resolution of unspecified environmental regulatory concerns. Jervois is complying and is engaging with the DoD to seek clarification.

4 Information on the basis of preparation for the financial information included in this Quarterly Activities Report is set out on page 11.

5 See ASX announcement "Jervois to begin work funded by U.S. Department of Defense to advance U.S. cobalt supply chain security", 16 June 2023. After the quarter end, on Friday 26 April 2024, Jervois received a request from the DoD to stop work under the Agreement Funding pending resolution of unspecified environmental regulatory concerns. Jervois is complying and is engaging with the DoD to seek clarification.

6 See ASX announcement titled "Jervois completes maiden JORC Resource for Sunshine (updated)" dated 11 April 2024. 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 See ASX announcement "Updated RAM resource offers opportunity to extend ICO mine life" dated 19 April 2023 (Australia).

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

9 Relates to the refinery study currently being undertaken in the United States.

Copyright (c) 2024 TheNewswire - All rights reserved.


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