happy days for the jervois faithful...

Source: www.theaustralian.news.com.au

Happy days for the Jervois faithful

May 18, 2007

JERVOIS Mining shareholders are a savvy mob.

Not only did they force their company board to disclose just why they turned down a possible takeover offer from Intec last month, but they have lit up the switchboards of late about a possible ground-breaking deal with Chinese interests.

And the news shareholders got today from the Jervois board would be enough to give them a smile heading into the weekend.

In April Jervois inked a Memorandum of Understanding with Chinese investment firm Guandong Guang Ye Assets Management over a possible joint venture of Jervois' Young nickel project in NSW.

Young is a beauty. It contains 167 million tonnes of nickel laterite ore with a grade of 0.72 per cent nickel and 0.07 per cent cobalt, relatively low grade on domestic standards.

Nickel laterites have never been much fun when trying to make a buck. Plenty have tried, plenty have gone broke.

Just look at the former Cawse and Bulong operations in Western Australia.

But the rising nickel price gives plenty of incentive to try and get the processing technology right and Jervois is well advanced in that respect.

Jervois has eyed a production target of some 60,000 tonnes of nickel a year from Young, and 6000 tonnes of cobalt.

That would put Jervois right up there with the nickel producing heavyweights, including fellow laterite producer Minara Resources.

But that is all dependent on Jervois' unique hydromet technology being firstly a success, and secondly to such a degree it gives excellent production margins.

Hydrochloric acid has been used to help refine plenty of other metals in the past, but rarely for nickel and that's what makes Jervois' technology both tricky, and appealing.

But there is another alternative, one which might just sway Guang Ye into formalising a joint venture.

It's called nickel pig iron and basically means smelting the laterite resource to produce nickel in a hurry. The process has had a resurgence in New Caledonia and Guang Ye have mooted the option with Jervois as a method of getting quick access to the in-demand metal.

Jervois managing director Duncan Pursell said he was so confident about the recent talks with Guang Ye representatives - who flew to Australia this month and toured Jervois assets - that a tie-up should be a formality before the end of June.

“Obviously China is a hard place to do business and Guang Ye have bosses they have to answer to as well,� Mr Pursell said.

“Another six months and we should have the hydromet process up to scale. “Guang Ye are very keen on it, but there is the ferro-nickel route (nickel pig iron) which is an option.�

“If that happened, we would still want to go with the big one (hydromet) down the track.�

Jervois have promised not to deal with any other Chinese parties and has provided Guang Ye with its own business plan for Young.

Jervois shares, often among the most traded in terms of volume on a daily basis, lifted more than 25 per cent yesterday.

A good result for the persistent Jervois faithful.


Ends.

Cheers, Pie