(TheNewswire)
NOT FOR DISTRIBUTION OR RELEASE INTHE UNITED STATES
November 9, 2022 – TheNewswire –Australia – (ASX) (TSXV:JRV) (OTC:JRVMF)
Highlights:
-
Jervois approves Final Investment Decision( FID ”)on São Miguel Paulista (“ SMP ”) refinery restart, 1 focused ondelivering Stage 1 forecast of 10,000 mtpa nickel and 2,000 mtpacobalt metal cathode 2
-
First production at SMP expected in Q1 2024
-
Commissioning underway at Idaho Cobalt Operations( ICO ”); expected commercial concentrate production in Q4 2022,and nameplate capacity production end of Q1 2023
-
Jervois announces fully underwritten A$231 million(US$150 3 million) equitycapital raising ( EquityRaising ”)
-
Proceeds will fully fund SMP restart, ICO ramp up andmine sustaining capital expenditure, and Jervois Finland expansionBFS
-
Funding further de-risks Jervois, allowing it tomaintain 100% control of three cash generating assets, all expected tobe online early 2024, and ensures commercial negotiations withdownstream supply chain occurs from a strong position
-
Entities controlled by AustralianSuper, Jervois’largest shareholder, have agreed to participate in up to ~24% of theEquity Raising (A$55.6 million or US$36.1 million) – including itsfull Institutional Offer entitlement, Placement pro-rata andadditional Retail Entitlement Offer sub-underwriting
-
Mercuria, Jervois’ third largest shareholder and oneof the world’s largest independent energy and commodity traders,commits to investing US$10.5 million (A$16.2 million)
-
Jervois Directors and Senior Management will invest afurther A$2.0 million 4 (US$1.3 million)
São Miguel Paulista refinery restartFID
Jervois Global Limited (“ Jervois ” or the“ Company ”) (ASX: JRV) (TSX-V: JRV) (OTC: JRVMF) is pleased toannounce its final investment decision (“ FID ”) on therestart of the SMP nickel-cobalt refinery in São Paulo,Brazil. 5
Jervois has continued to advance the restart pathwaysince Ausenco completed a Bankable Feasibility Study (“ BFS ”) in April2022. Restart capital deployment is already underway at SMP with aninitial US$1 million of the previously estimated US$55million 6 total capital costapproved by the Jervois Board in September 2022. Ausenco is currentlymobilised at site undertaking detailedengineering and construction execution planning, as well as advancedprocurement. Jervois’s commercial executives are negotiatingrefinery feed sourcing arrangements and product sale discussions arealso underway.
Jervois has added US$10 million contingency to theearlier US$55 million estimate to address the potential for capexescalation. This takes the total budgeted capital project funding toreplace and refurbish plant and equipment at SMP, and restart theplant, to US$65 million.
Restart capital spending is planned across 2023 withproduction expected to commence in Q1 2024, with initial productionforecast of 10,000 mtpa nickel and 2,000 mtpa cobalt metalcathode. 7 While not part ofthe restart, over time, Jervois will target the historic nameplate SMPcapacity of 25,000 mtpa nickel via debottlenecking, including furtherinvestment. Assessment of the potential addition of a pressureoxidative autoclave (“ POX ”), is in progress, with its scope andpotential release linked with third party concentrate salenegotiations.
SMP is within the São Paulo city limits with readyaccess to labour and services, 120 km from the largest container portin Brazil (Santos), ensuring it is well located to serve exportmarkets. SMP previously produced ‘Tocantins’ nickel and cobaltproducts, which are well established domestically in Brazil and keyWestern export markets.
Jervois has appointed an experienced leadership team todrive SMP project delivery, including recently appointed President andEGM Jervois Brasil, Mr. Carlos Braga.
Funding
Jervois is undertaking a fully underwritten A$231million (US$150 million) equity capital raising consisting of a A$113million (US$73 million) institutional placement of new Jervoisordinary shares (the " Placement ") and a A$118 million (US$77million) 1 for 5.42 accelerated pro-rata non-renounceable entitlementoffer (the “ EntitlementOffer ” and, together with the Placement, the" EquityRaising ").
Jervois will use proceeds from the Equity Raising tofully fund the restart of SMP, ICO ramp up and mine sustaining capitalexpenditure, and for general corporate purposes including JervoisFinland expansion BFS. The Equity Raising provides a fully funded,de-risked restart model that is the simplest and lowest capitalpathway to SMP production.
The Board considers the Equity Raising as the preferredfunding pathway as it ensures Jervois maintains a balanced capitalstructure. Importantly, it allows Jervois to retain 100% ownership ofits three geopolitically strategic assets in high qualityjurisdictions, producing critical minerals that will be delivered toWestern markets. Macroeconomic tailwinds are strong, with nickelprices and premia significantly above assumptions applied in the SMPrestart BFS. These trends are expected to continue into 2023 andbeyond. Strengthening its balance sheet ahead of a key negotiatingperiod with OEMs and other nickel and cobalt customers, Jervois is well-positioned to maximise commercialoutcomes for the benefit of all shareholders.
A full breakdown of funding sources and uses isdetailed on slide 30 of the Jervois Investor Presentation releasedtoday in connection with the Equity Raising.
Jervois' cash balance at 31 October 2022 was US$42million 8 . This will be used as detailed in the Investor Presentation.
Equity Raising
Jervois will issue approximately ~550 million new fullypaid ordinary shares in Jervois (“ New Shares ”) underthe Equity Raising, equivalent to approximately ~36% of Jervois'current issued capital. New Shares issued under the Equity Raisingwill rank equally in all respects with Jervois' existing ordinaryshares.
Entities controlled by AustralianSuper, the Company’slargest shareholder, have agreed to invest up to A$55.6 million(US$36.1 million) to participate in up to ~24% of the Equity Raising– including its full Institutional Offer entitlement, Placementpro-rata and additional Retail Entitlement Offersub-underwriting.
As a part of the Equity Raising, Mercuria, Jervois’third largest shareholder and one of the world’s largest integratedenergy and commodity traders, will invest US$10.5 million (A$16.2million).
Jervois Directors and Senior Management willparticipate for approximately A$2.0 million (US$1.3 million) in theEquity Raising. 9
Under the Entitlement Offer, eligible shareholders areinvited to subscribe for 1 New Share for every 5.42 existing Jervoisordinary shares (“ Entitlement ”) held as at 7:00pm (Sydneytime) on Monday, 14 November 2022 .
All New Shares will be issued at a fixed price ofA$0.42 per New Share (“ OfferPrice ”), which represents a:
-
12.9% discount to TERP 10 (including Placement) of A$0.482;
-
14.6% discount to TERP (excluding Placement) ofA$0.492; and
-
16.8% discount to the last close price of A$0.505 on Tuesday, 8 November 2022
Institutional EntitlementOffer
Eligible institutional shareholders will be invited toparticipate in the institutional component of the Entitlement Offer(the " InstitutionalEntitlement Offer "), which is beingconducted Thursday, 10 November inAustralia.
Eligible institutional shareholders can choose to takeup all, part or none of their Entitlement. Eligible institutionalshareholders who do not take up their Entitlement under theEntitlement Offer, in full or in part, will not receive any value inrespect to those Entitlements not taken up. Institutional Entitlementscannot be traded on the ASX, TSX-V, OTC or transferred.
Institutional Entitlements that eligible institutionalshareholders do not take up by the close of the InstitutionalEntitlement Offer, and Institutional Entitlements that would otherwisehave been offered to ineligible institutional shareholders, will beoffered to new and existing institutional investors concurrently withthe Institutional Entitlement Offer and Placement.
Jervois' shares will re-commence trading on Friday, 11 November 2022 on the ASX following completion of the Institutional Entitlement Offerand Placement.
Retail Entitlement Offer
Eligible retail shareholders in Australia and NewZealand will be invited to participate in the retail component of theEntitlement Offer (the “ Retail Entitlement Offer” ) at the same offerprice and offer ratio as the Institutional Entitlement Offer. TheRetail Entitlement Offer will open on Thursday, 17 November 2022 andclose at 5:00pm (Sydney time) on Wednesday, 30 November 2022.
Further details about the Retail Entitlement Offer willbe set out in the retail offer booklet, which Jervois expects to lodgewith the ASX and dispatch to eligible retail shareholders on Thursday,17 November 2022. The retail offer booklet will also enclosepersonalised entitlement and acceptance forms.
Entitlements cannot be traded on the ASX, TSX-V or OTCor transferred. Eligible retail shareholders who do not take up theirEntitlement under the Retail Entitlement Offer, in full or in part,will not receive any value in respect to those Entitlements not takenup.
Timetable
Event 11 | Date in Australia 12 |
Announcement of Equity Raising | Thursday, 10 November 2022 |
Bookbuild for Placement and Institutional EntitlementOffer closes | Thursday, 10 November 2022 |
Announcement of the completion of Placement and Institutional Entitlement Offer and tradingresumes on an ex-entitlement basis | Friday, 11 November 2022 |
Record Date for Entitlement Offer (7:00pm) | Monday, 14 November 2022 |
Information Booklet and Entitlement & AcceptanceForm despatched to Eligible Retail Shareholders | Thursday, 17 November 2022 |
Retail Entitlement Offer opens | Thursday, 17 November 2022 |
Settlement of New Shares to be issued under theInstitutional Entitlement Offer and Placement | Friday, 18 November 2022 |
Allotment and Quotation of New Shares under thePlacement and Institutional Entitlement Offer | Monday, 21 November 2022 |
Closing date for acceptances under Retail EntitlementOffer (5pm) | Wednesday, 30 November 2022 |
Announcement of results of Retail Entitlement Offer andnotification of any shortfall | Monday, 5 December 2022 |
Settlement of Retail Entitlement Offer | Tuesday, 6 December 2022 |
Allotment and issue of New Shares under the RetailEntitlement Offer | Wednesday, 7 December 2022 |
Commencement of trading and holding statementsdispatched for Retail Entitlement Offer | Thursday, 8 December 2022 |
Additional Information
Further details on the Equity Raising are set out inthe Investor Presentation also released to the ASX today and expectedto be filed by the Company shortly on SEDAR, together with a copy ofthe Underwriting Agreement. The Investor Presentation containsimportant information including disclaimers, key risks and foreignselling restrictions with respect to the Equity Raising.
Any New Shares issued to Canadian residents under theEquity Raising will be offered pursuant to exemptions from theprospectus requirements and will be subject to a statutory hold periodin Canada expiring four months and one day from the date of issuance,and TSX-V hold period, as applicable. The Equity Raising is subject toapproval of the TSX-V.
The participation of AustralianSuper and Jervois’ Directors and Senior Management (the“ Related PartyParticipation ”) in the Equity Raising constitute a “related party transaction”under Multilateral Instrument 61-101 – Protection of Minority Security Holders inSpecial Transactions (“ MI 61-101 ”) asAustralianSuper is a related party of the Company given its greaterthan 10% beneficial shareholding. Pursuant to Section 5.5(a) and5.7(1)(a) of MI 61-101, the Company is exempt from obtaining a formalvaluation and minority approval of the Company’s shareholders inrespect of the Equity Raising due to the fair market value of theRelated Party Participation being below 25% of the Company’s marketcapitalization for purposes of MI 61-101. The Company will file amaterial change report in respect of the Equity Raising. However, thematerial change report will be filed less than 21 days prior to theclosing of the Equity Raising, which is consistent with marketpractice and the Company deems reasonable in the circumstances.
The Equity Raising is fully underwritten .
This announcement has been approved for release by theBoard of Directors of Jervois.
For further information, please contact:
Investors and analysts: James May Chief Financial Officer Jervois | Media: Nathan Ryan NWR Communications nathan.ryan@nwrcommunications.com.au Mob: +61 420 582 887 |
Forward-LookingStatements
This announcement may containcertain “Forward-Looking Statements” within the meaning of theUnited States Private Securities Litigation Reform Act of 1995 andapplicable Canadian securities laws. When used in this announcement,the words “anticipate”, “believe”, “estimate”,“expect”, “target, “plan”, “forecast”, “may”,“schedule”, “expected” and other similar words or expressionsidentify forward-looking statements or information. Indications of,and guidance on, future earnings and financial position andperformance are also forward-looking statements. These forward-lookingstatements or information may relate to the Equity Raising andapprovals of the TSXV; filing of a material change report; futuresupply contracts, future sales contracts, the timing of commissioningand production at Idaho Cobalt Operations; estimation of MineralResources and Mineral Reserves; magnitude or quality of mineraldeposits; anticipated advancement and timing of SMP Refinery; futureoperations; future exploration prospects; the completion and timing offuture development studies; future growth potential of the Company’sprojects and future development plans; statements regarding planneddevelopment programs and expenditures; Jervois’ ability to obtainlicenses, permits and regulatory approvals required to implementexpected business future plans; and operational restart plans andexploration. Such statements represent the Company’s current viewswith respect to future events and are necessarily based upon a numberof assumptions and estimates that, while considered reasonable by theCompany, are inherently subject to significant business, economic,competitive, political and social risks, contingencies anduncertainties.
These forward-looking statements arebased on assumptions and contingencies that are subject to changewithout notice and involve known and unknown risks, uncertainties andother factors, many of which are beyond the control of the Company andits related bodies corporate and affiliates (and each of theirrespective directors, securityholders, officers, employees, partners,agents, advisers and management), and could cause results, performanceor achievements to be materially different from the results,performance or achievements that are or may be expressed or implied bysuch forward-looking statements or any projections and assumptions onwhich those statements are based. This includes statements aboutmarket and industry trends, which are based on interpretations ofmarket conditions.
Forward-looking statements areprovided as a general guide only and should not be relied on as anindication or guarantee of future performance. These statements mayassume the success of the Company’s business strategies, the successof which may not be realised within the period for which theforward-looking statements may have been prepared, or at all, and thereceipt of applicable approvals to complete the Equity Raising.
No guarantee, representation orwarranty, express or implied, is made as to the accuracy, likelihoodof achievement or reasonableness of any forecasts, prospects, returns,statements or tax treatment in relation to future matters contained inthis announcement. The forward-looking statements are based oninformation available to the Company as at the date of thisannouncement. Except as required by applicable laws, rules orregulations, none of the Company, its representatives or advisersintends to, or undertakes to, or assumes any obligation to, provideany additional information, update or revise the statements in thisannouncement, whether as a result of a change in expectations orassumptions, new information, future events, results or
circumstances.
Not fordistribution or release in the United States
This announcement has been preparedfor publication in Australia and may not be distributed or released inthe United States. This announcement does not constitute an offer tosell, or a solicitation of an offer to buy, any securities in theUnited States or to any person who is acting for the account orbenefit of any person in the United States (to the extent such aperson is acting for the account or benefit of a person in the UnitedStates). The New Shares described in this announcement have not been,and will not be, registered under the U.S. Securities Act of 1933, asamended (the “ U.S. Securities Act ”) and may not be offered or sold,directly or indirectly, in the United States except in transactionsexempt from, or not subject to, the registration requirements of theU.S. Securities Act and any other applicable US state securitieslaws.
Neither TSX Venture Exchange nor itsRegulation Services Provider (as that term is defined in policies ofthe TSX Venture Exchange) accepts responsibility for the adequacy oraccuracy of this announcement.
NOT FORDISTRIBUTION OR RELEASE IN THE UNITED STATES
1 The FID is subject to theEquity Raising described in this announcement completing.
2 See ASX release dated 29April 2022 titled “BFS for São Miguel Paulista refineryrestart”.
3 AUD/USD exchange rate of0.65 (8 November 2022) applied to all conversions in thisAnnouncement.
4 Directors will notparticipate in the placement component of the Equity Raising, they arenot permitted to under the ASX Listing Rules without shareholderapproval.
5 The FID is subject to theEquity Raising being successfully completed.
6 Before additional US$10million contingency added. Refer to associated Risk Factors on slide47 of the Investor Presentation released by Jervois today.
7 See ASX release dated 29April 2022 titled “BFS for São Miguel Paulista refineryrestart”.
8 On an unaudited basis.See slide 42 of the Investor Presentation released by Jervois on 10November 2022 for more information.
9 Directors will notparticipate in the placement component of the Equity Raising, they arenot permitted to under the ASX Listing Rules without shareholderapproval.
10 The theoreticalex-rights price (“TERP”) is the theoretical price at whichJervois’ shares should trade at immediately after the ex-date forthe Entitlement Offer based only on the last traded price and issuanceof shares at the Offer Price under the Entitlement Offer (and here thePlacement). TERP is a theoretical calculation only and the actualprice at which Jervois shares trade immediately after the ex-date forthe Entitlement Offer may be different from the TERP.
11 Note that securitiesacquired by Canadian residents will be subject to customary 4 monthshold period pursuant to applicable Canadian provincial securitieslaw.
12 The timetable (and eachreference in this announcement to a date specified in the timetable)is indicative only and Jervois may, at its discretion, vary any of theabove dates by lodging a revised timetable with the ASX. All times areSydney times.
Copyright (c) 2022 TheNewswire - All rights reserved.