Despite the higher capex figure, the company is confident there will be no slippage to the construction timeline.
Jervois said the increased costs of high-density polyethylene for the waste storage facility, steel and cement supply and camp materials. Current market-based pricing for labour and materials meant inflationary pressure had pushed the updated capital estimate to $99.1 million.
The first ore through the mill is now planned to happen one month later than scheduled in August, but the December date for sustainable ore production remains unchanged.
Jervois said in a news release ICO had completed recruiting for substantially all key management positions, including finance manager, mill manager and mine manager in advance of full operations.
The project was partially built when Jervois acquired it in July 2019, with more than $120 million invested by the previous owners since the discovery of the cobalt deposit.
The operation would entail a 1,200 tonne per day mill and concentrator to produce separated cobalt and copper concentrates.
The ICO gold reserves will report to the cobalt concentrate. They will be recovered at the São Miguel Paulista refinery in Brazil, subject to Jervois completing the acquisition and restart of the refinery in stages during 2022 and 2023.
The Jervois board’s July construction decision followed a $100 million bond issue in that same week to fund the Idaho project and bring it to production.
Jervois envisions itself becoming a global supplier in the emerging battery metals market associated with the green energy transition.
The company last year bought eCobalt Solutions in a C$57.6 million deal, a move that gave Jervois control of the high-grade ICO deposit.
Over the past 20 years, about $100 million has been invested in developing the mine.
It is fully environmentally permitted for ore processing capacity of up to 1,200 tonnes and has high cobalt and copper grades, with a gold by-product.
Cobalt prices are expected to stabilize in 2022 after trading at their highest levels in three years, according to Fastmarkets MB.
According to Benchmark’s Cobalt Price Assessment, the cobalt price rose by 10% in November, breaking through $30 per pound for the first time since the end of 2018. Prices have increased by 92% year-to-date.
Jervois shares were trading 5.32% higher in Toronto at C59.5c, capitalizing at C$751.31 million ($587.87 million).
