Advanced Exploration Investments
It is generally accepted in the mining industry that the timeline between new mineral discovery and development is about seven years, comprising three to four years for discovery and resource definition, two years for feasibility and environmental approvals, and finally two years for construction and development.
The mineral properties held by Jervois such as West Arunta, Khartoum and Area 1 all fall into the category of early stage exploration, each of which would require millions of dollars to get through the resource definition stage. While these appear worthwhile exploration targets, Jervois will limit its exploration to doing sufficient to farm these out to third parties on favourable investment terms. Jervois has spent the past fifty years chasing exploration rainbows and despite a lot of criticism from some quarters, has a considerable record of success. Jervois will build on that success and use it to move away from high risk exploration and directing expenditures towards generating diversified profits for shareholders
Jervois and its shareholders will be better served by management identifying mining investment opportunities where the high risk of exploration has been removed and only development risk remains.
This has formed the basis of most of the successful mining companies. Jervois already has one such investment in its portfolio and will build on this. One of the most tangible assets in the Jervois portfolio at present is its shareholding in Explaurum Limited.
Explaurum Limited Tampia Gold Project
Jervois currently holds 10 million shares in Explaurum Limited which has targeted the discovery of a 1 million ounce gold deposit in the wheat belt of Western Australia, 300km east of Perth.
A major resource drilling program is currently underway with the aim of establishing a new resource.
In 2012, a JORC inferred resource of 4.7 million tonnes grading 2.0 grams per tonne for 310.000 oz. of gold was established.
Recent drill results indicate that this number should significantly increase. In addition metallurgical work has indicated recoveries of over 90 per cent.
The shares are currently selling well above the book cost.
Elementos Limited – Mt Cleveland Project
Directors of Jervois Mining are pleased to advise that they have resolved to become a cornerstone investor in a $2 million capital raising in Elementos Limited.
Jervois will invest $600,000 in Elementos and in return be issued 100 million shares and 100 million options. The options entitle the holder to take up a further 100 million shares at 0.6 cents within 12 months.
If exercised Jervois would emerge with 13.2 percent of the fully diluted capital.
The investment in Elementos reflects the policy of the new board of Jervois to drive growth by taking strategic holdings in promising resource projects with proven management capability while at the same time maturing its wholly owned assets.
Elementos has an exceptional management team headed by the major shareholder and Chairman, Andy Grieg, who ran the global mining unit of Bechtel for over 20 years.
The current capital raising by Elementos has the potential to raise $4 million of which Jervois would, if it exercised its options, subscribe $1.2 million.
These funds are considered sufficient to confirm the geological model and process flow sheet on reopening the Cleveland tin mine in Tasmania.
The tin price has risen strongly in recent years as a result of global undersupply. This position is expected to continue with Macquarie recently predicting an average tin price in 2019 of US$23,000 per tonne.
One of the factors driving the tin market is the use of tin in the energy related technologies, particularly its application in electric vehicles, lithium ion batteries and lead-free electronics.
The rise in prices is having a dramatic impact on profitability as evidenced by the recent results from the Renison tin mine, also located in Tasmania.
The investment complements Jervois’ holding of 10 million shares in Explaurum Ltd.