The SMP refinery has an annual production capacity of 25,000 tonnes of nickel and 2,000 tonnes of cobalt

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The SMP Refinery is currently on care and maintenance. (Credit: Khusen Rustamov from Pixabay)

Australia-based Jervois Mining has signed an agreement to acquire the Sao Miguel Paulista (SMP) nickel and cobalt refinery in Sao Paulo, Brazil from Companhia Brasileira de Aluminio (CBA), a subsidiary of Brazil’s Votorantim, for BRL125m ($22.5m).

The SMP Refinery, which is currently on care and maintenance, has an annual production capacity of 25,000 metric tonnes of nickel and 2,000 metric tonnes of cobalt.

Jervois expects the transaction to transform it into a vertically integrated producer when Idaho Cobalt Operations (ICO), its primary cobalt deposit located in the Idaho, US, begins commercial production.

The firm plans to initially lease the SMP refinery, allowing it access to undertake a feasibility study for the restart.

The lease is planned to be continued until closing of the acquisition of the SMP refinery, which is expected by December 2021.

In a press statement, Jervois said: “As part of the purchase arrangements and as contained in Refinery Lease, Jervois will pay for existing SMP Refinery care and maintenance (including environmental remediation) of the site from March 2021, via the payment of a monthly lease cost of R$1.5 million (US$0.27 million).

“Up until Closing, CBA will continue to manage the site. After Closing, 100% ownership will transfer to Jervois as it moves forward to restart the refinery.”

Jervois completes BFS for Idaho Cobalt Operations

Separately, Jervois has reported the results of an updated bankable feasibility study (BFS) for the IOC.

The BFS confirms the IOC’s potential to establish a near-term, low-cost cobalt-copper-gold mine with scope to increase the mineral resource and extend the mine reserves, once mining starts.

Estimated to cost $78.4m, the project has the potential to produce 1,915 tonnes of cobalt per annum, 2.900 tonnes of copper per annum and 6,700 oz of gold per annum.

Last year, Jervois Mining has commenced 2,000m diamond core drilling programme at the IOC.