Ann: Jervois Global Limited 2023 Annual Report to Shareholders, page-10

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mondyinvest

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25/03/24

11:21

Post #: 73040750
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Originally posted by quickthinker: ↑

I just cannot see the justification of keeping the Idaho operation on care and maintenance when the numbers don't stack up.
it costs $12 million to keep the mine on care and maintenance
The bfs by product income has grown by around $15 million since it was done... Copper and gold.
So the company would be saving $27 million US if it wasn't on care and maintenance.
The cobalt price was done @ $7.45/lb operating costs back then and since then the by products increase is $3.56/lb.
So if it was $7.45 minus $3.56 which turns out to be $3.89 cost price. Obviously inflation would have effected that amount which has to come into play.
Cobalt price today is $12.95/lb. Even if you double the cost price for inflation $3.89 x 2 = $7.78
$12.95 - $7.78 =$5.17/lb
$5.17 x (1915 metric tonnes= 4213000lbs) x $5.17 = $21 781210.
So it's $21.7 million US before tax.
The dumb decision to not start up the mine is going to cost the company money it potentially has to help pay our interest bills. Even if we don't have Brazil going we can still ship our Cobalt to Finland or Canada to refine.
My conclusion is it is better to make some money from an asset you have and to stop making excuses that you are preserving the asset by saying that the price of Cobalt will go up in the future. It's irrelevant as the mine is scheduled for 7 years and if the Cobalt price increases over time then the mine will benefit with the higher prices.
The management MUST disclose to shareholders if it's almost completed a better deal in the very near future or it should step aside as it's incompetent.

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There is no way they can run the mine at the current LME price of US$12.95/lb, @quickthinker. You appear to be working out the costs wrong. Also the US$7.95/lb is the cash cost, not the AISC.

Look at the BFS and check the sensitivity analysis for +/- 30% (on page 22). A -30% reduction in the assumed BFS cobalt price of US$25/lb down to US$17.5/lb drops the project NPV down to just US$8M. The current price is almost a 50% drop so the NPV would be negative (especially given the capex overruns).

JRV Price at posting: 2.6¢ Sentiment: None Disclosure: Not Held
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0 Great analysis

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