Triple listed Jervois has reported a decline in quarterly revenue for the quarter ended June, as cobalt sales volume from its Finland operations fell.
Quarterly revenue in the three months to June reached $91.2-million, down from the $105.1-million in the March quarter, with sales volumes in the same period declining from 1 446 t to 1 139 t.
Jervois told shareholders on Friday that volatility on both end-user demand and cobalt feed supply impacted cobalt prices and revenue, with production volumes in the quarter falling by around 11% to 1 145 t due in part to the planned annual maintenance shut-down in June, and reduced reliability experienced in the global supply chain which impacted cobalt feed availability early in the quarter.
Due to a catch up of raw materials supply late in the quarter, along with weakened global market demand for cobalt largely associated with Covid-19 lockdowns in China, total inventory volumes increased across the quarter.
Jervois expects cobalt inventory levels to remain temporarily above levels typically targeted, to ensure profitability is optimised and risk is managed relative to ongoing supply chain challenges.
Meanwhile, working capital is expected to normalise during the second half of 2022, with management focussed on balancing supply chain risk, commercial objectives, and liquidity management.
As a result of lower cobalt prices and sales volumes, Jervois has revised earnings before interest, tax, depreciation and amortisation (EBITDA) full year 2022 guidance to between $35-million to $40-million based on a $27.50/lb forecast cobalt price assumption for the remainder of the year, from $50-million to $55-million which was based on a $39.75/lb forecast cobalt price assumption at the end of the first quarter of 2022.
Meanwhile, construction of the Idaho Cobalt Operation (ICO), in the US, continued during the quarter.
Jervois last year approved $92.6-million capital for construction of the mine and process facility.
The operation would comprise of a 1 200 t/d mill and concentrator to produce separated cobalt and copper concentrates. Gold mineralisation in the reserve at ICO will be reported to the cobalt concentrate, and 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.