Ann: Quarterly Activities Report and Cashflow to 30 June 2023, page-2

While this June 2023 quarterly isn’t crash hot, it has at least indicated to us that the haemorrhaging has stopped for now.

Cash balance of US$53.4m (as at 25 July 2023).

* Differences relate to actual working cap movements since 31 May 2023 (including interest payments). (OK - so this relates to the coupon payment on the bond - paid this month).

Jervois’ cash flow statement would have looked much better sans the US$28.1m spent on property, plant, equipment, etc - incl ICO. They also paid down $12.5m of the Mercuria facility (no choice). We will see a drop in cash used for investing activities in this quarter and subsequent quarters with the ICO offline.

Cobalt inventories (US$48.6m) are roughly equivalent to the remaining Mercuria working cap facility (US$48.9m) - once the US$8.6m has been paid this month (reflected in September quarterly).

Sale of Nico-Young to boost cash.

Ceteris Paribus, they shouldn’t need to raise again this year to run the business in its current capacity (without progressing their assets in the ways they have expounded).

They still need to repay the Mercuria facility (US$48.9m) by the end of 2024 (unless they renegotiate this with Mercuria - which I suspect may happen). And the Nordic bond falls due to mid-2026 (again - I’ve long suggested that the USG should help them sub out this bond with USG funds).

Conclusion - Jervois Global’s balance sheet has stabilised for the moment. Importantly, they have managed to return Kokkola to +EBITDA. This asset isn’t capable to generating enough cash to fund their ambitions around the SMP, expanding Kokkola, etc - but it is capable of keeping them afloat in the ST without requiring any further equity capital. They will still need to secure deals to expand Kokkola (most likely with an OEM), fund the SMP capex (debt + equity share with an OEM?), fund a domestic cobalt refinery (USG) and sub out the bond (USG).