report for the quarter ended 31 december 2012 … · 1/31/2013 · this work was carried out by...

ABN 52 007 626 575

Suite 12, 10 Jamieson St, Cheltenham, Victoria 3192, Australia Telephone: (03) 9583 0498 Facsimile: (03) 9583 0698

Email: [email protected] www.jervoismining.com.au

31 January, 2013 ASX Code: JRV

REPORT FOR THE QUARTER ENDED 31 DECEMBER 2012

Bullabulling Gold Project, WA

Bullabulling Gold Limited (BAB) reported on 21 January, 2013 that project pre-feasibility is expected to be complete in

draft form by the end of January, 2013. Work on the full feasibility study will follow from early February, 2013. BAB

reported the preparation of a preliminary production schedule and cash cost estimates for the Bullabulling project.

Results strongly support the financial viability of the project and progression to a full feasibility study.

The BAB production schedule indicates that 1.95 million ounces of gold would be recovered from an initial mine life of

just over 10 years. Of particular short term interest to Jervois shareholders is the 650,000 oz schedule to be produced in

the first three years at an estimated cash cost of $884.00 per oz. (The present gold price mostly exceeds $1,600 per oz).

The Jervois royalty is $30.00 per oz for 400,000 oz and $20.00 per oz thereafter.

Young Nickel and Cobalt in Laterites Exploration Licences 5527, 5571, 5152, Young NSW

JORC Resource Upgrade, 2012

In recent weeks the Company has been approached by two different groups with re-newed interest in the Company’s

nickel and cobalt assets. This is viewed as encouraging. Even in difficult times, nickel for stainless steel is always in

demand and some groups seek to position themselves early in anticipation of future better times. Shareholders should

realise that approaches of this type, whilst very encouraging, have a high failure rate due to the complexity of

economically treating nickel/cobalt laterites, the nickel price and the availability of cheap sulphuric acid.

Last year the Board sought an independent re-assessment and update of its nickel/cobalt resource at the above location.

This work was carried out by Geostat Services Pty Ltd using ‘state of the art’ 3D techniques and geostatistics (refer to the

diagrams below). As a consequence of this work, the overall JORC resource reduced slightly but with a 10% increase in

overall grade. As reported previously, at a cutoff grade of 0.6% nickel, there is now an inferred resource of 92.5 million

tonnes at a grade of 0.8% nickel and 0.06% cobalt. We are advised that 33 additional infill drill holes will up-grade the

project to an indicated resource status; under JORC rules.

3D plan-view showing a total view of the 23 wireframes (each shown in a different colour) used to determine the Young

deposit resource. The deposit comprises four main mineralisation zones; Ardnaree, Thuddungra East, Thuddungra West

and Tyagong; as illustrated above. To determine the inferred nickel/cobalt resource a series of perimeters or wireframes

were created around each known mineralization ‘blocks’, within the lithology. These formed block models used for

resource definition.

Ardnaree

Tyagong

Thuddungra East

Thuddungra West

N

31.5km

15km

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2 | P a g e J R V Q R 3 1 D e c e m b e r 2 0 1 2

Lithological profile showing the mineral bearing horizons of the Young deposit. Some lithologies are represented twice due

to a double lithological horizon resulting from the two distinct periods of laterisation present. This figure shows a typical

double horizon, with repetition of the saprolite unit (red) and the limonite unit (orange) in the section profile.

This renewed interest in Young may be partly attributable to the successful adaptation to nickel laterites of a process

developed by Jervois for the Nyngan scandium resource. At about 80% recovery of nickel the process is no ‘world first’

but the recovery is adequate if sulphuric acid can be manufactured or delivered to Young for less than $100 per tonne.

This latter aspect is being addressed by the Company.

Summary of Independent Scoping Study

Techno-Economics of Sulphuric Acid Baking and Water Leaching For Young Ni/Co Laterite

Introduction

Jervois Mining Limited has an inferred nickel/cobalt/iron laterite resource near Young in New South Wales. This resource

contains 167 million tonnes at 0.72% nickel and 0.07% cobalt*. The metallurgical test work Jervois Mining has

undertaken during the last five years is largely focused on sulphuric acid baking and water leaching to extract Ni/Co. In

this heat and leach process, the ore is mixed with concentrated sulphuric acid, heated under atmospheric pressure to

approximately 700oC and leached with water. However, this process has not found acceptance due to low recovery

rates: e.g., in the case of Young lateritic nickel ores, the nickel recovery rates remained around 75%. However, the more

recent thermodynamic calculations showed that carrying out the acid baking under a sulphur trioxide SO3 atmosphere

would improve the rate of recovery possibly to 90%.

A potential process flowsheet has been developed for processing lateritic Ni/Co ores through to a mixed nickel/cobalt

hydroxide product (MHP) for sale to downstream processors to produce nickel and cobalt metal. The process flowsheet

essentially consists of two main sections:

Acid calcination plant

The ore is initially reacted with sulphuric acid (98% w/w) and/or sulphur trioxide to extract the metals from the ore as

sulphates, followed by decomposition of the iron and alumium sulphates to hematite and alumina respectively in the

calcination kiln. The sulphur dioxide emitted from the kiln is recycled via an acid plant, which includes a pyrite roaster to

make up for sulphur lost from the system in the tails. Hematite from the pyrite roaster is a by-product from the ore

calcination plant.

Hydrometallurgical plant

The hot product from the calcination plant is first leached with water at pH 0.5 to 1.5 to dissolve the soluble metal

sulphates, followed by neutralisation at an approximate pH of 3.5 with magnesite to precipite the iron and aluminium in

solution as hydroxides. The solids are removed by filtering and the pH of the filtrate is adjusted to 8 and the nickel and

cobalt in solution are precipitated as hydroxides by the addition of magnesia (MgO). The latter is prepared by crushing

and calcining magnesite (MgCO3). The final product is a dried mixed Ni-Co hydroxide product (MHP).

*Since this technoeconomic assessment was completed, the Young resource has been recalculated to 92.5 m/t at 0.8%

Ni and 0.06% Co.

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To assess the likely economic viability of this processing flowsheet for extracting nickel and cobalt from the Young laterite

deposit, mass and energy balances were established for the process by modelling both with Excel and process simulation

software. These mass and energy balances were then used to estimate capital and operating costs for the process, and in

turn, the Net Present Value (NPV) and Internal Rate of Return (IRR) of the process based on the assumptions made in the

evaluation. Three variations of the proposed process flowsheet options were evaluated:

• Option A – sulphuric acid (H2SO4) only;

• Option B – sulphur trioxide (SO3) only;

• Option C – sulphuric acid (H2SO4) and sulphur trioxide (SO3) combined.

PROCESS SPECIFICATIONS AND ASSUMPTIONS

In carrying out the techno-economic evaluation of the laterite processing options, certain process specifications provided

by Jervois Mining were included, plus a number of other assumptions that were made regarding the process. These

specifications and/or assumptions are listed below:

Production rate

Annual production rate of nickel: 40,000 tpa (as MHP)

Plant operating basis: Continuous (24 hours/day, 365 days/year)

Plant annual availability: 92%

Production profile: 100% of capacity from year #1 onwards

Acid/ore mixing

Sulphuric acid added: 98% w/w H2SO4 from acid plant

Option A : Amount determined by ore composition and reaction extents specified

below

Option B: SO3 from SO3 converter

Amount determined by ore composition and reaction extents specified

below

Option C: 250 kg 98% H2SO4/t ore, balance SO3 as required by reaction extents

specified below.

Demoisturising kiln

Temperature 300 ºC

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Calcination

Temperature 300-600 ºC

Reactions & extents:

Option A: MgO + H2SO4 = MgSO4 + H2O (extent 60%)

2FeO(OH) + 3H2SO4 = Fe2(SO4)3 + 4H2O (extent 80%)

2Al(OH)3 + 3H2SO4 = Al2(SO4)3 + 6H2O (extent 80%)

NiO + H2SO4 = NiSO4 + H2O (extent 80%)

CoO + H2SO4 = CoSO4 + H2O (extent 80%)

CaO + H2SO4 = CaSO4 + H2O (extent 80%)

Na2O + H2SO4 = Na2SO4 + H2O (extent 80%)

MnO + H2SO4 = MnSO4 + H2O (extent 80%)

Cr2O3 + 3H2SO4 = Cr2(SO4)3 + 3H2O (extent 80%)

Option B: As for option A, but with one change


Option C: As for option A, but with two changes


NiO + H2SO4 = NiSO4 + H2O (extent 92%)

Temperature >600 ºC

Reactions & extents: 2Fe2(SO4)3 = 2Fe2O3 + 6SO2 + 3O2 (extent 80%)

2Al2(SO4)3 = 2Al2O3 + 6SO2 + 3O2 (extent 80%)

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Ore feed composition

% w/w dry basis

(as reported)

% w/w dry basis

(assumed for study)

SiO2 38.72 38.72

Al2O3 7.741 1.55

Al(OH)3 - 9.47

CaO 0.72 0.72

FeO 26.092 -

Fe2O3 - 5.80

FeO(OH) - 25.81

Na2O 0.15 0.15

MnO 0.40 0.40

MgO 8.50 8.50

Cr2O3 1.00 1.00

NiO 0.923 0.92

CoO 0.094 0.09

Others - 6.87

TOTAL 84.33 100.00

Moisture 11.11 (wet basis) 11.11 (wet basis)

1. 20% of this assumed to be Al2O3, balance is Al(OH)3.

2. 20% assumed to be Fe2O3, balance is FeO(OH).

3. 0.72% Ni.

4. 0.07% Co.

Pyrite roaster/acid plant

Temperature (roaster): 800 ºC

Pyrite composition: FeS2 (100% w/w)

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Water leach & neutralisation

Solids in tank: 33% w/w

Leach extraction efficiencies (%): FeO(OH) 0

Al(OH)3 0

Fe2O3 0

Al2O3 0

Al2(SO4)3 100

Fe2(SO4)3 100

MgSO4 63

NiSO4 100

CoSO4 100

MnSO4 83

Na2SO4 100

CaSO4 100

Cr2(SO4)3 83

Others 0

EDTA addition rate: 100 g/t calcined ore

Magnafloc addition rate: 80 g/t calcined ore

Initial pH: 1.0

Final pH: 3.5

Temperature: 90 ºC

Duration: 90 minutes

Stoichiometric ratio of MgCO3: 200%

Precipitation: Al (100%)

Fe (100%)

Ni loss (co-precipitation – 0.5% of total Ni in solution)

Note: While the water leach and neutralisation stage in Figures 1-3 is shown as a single stage, it is in fact a two-step

process, water leach followed by neutralisation.

Water leach filter #1

Wash water: 1 bed volume

Moisture content of cake: 25%

Washing efficiency: 90% overall

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Pregnant leach solution/MHP precipitation

Final pH: 8.0

Temperature: 90 ºC

Duration: 90 minutes

Stoichiometric ratio of MgO: 110%

Precipitation: Ni (100%)

Co (100%)

Filter #2

Wash water: 2 bed volumes

Moisture content of cake: 25%

Washing efficiency: 90% overall

Magnesite calcination & size reduction

Calciner temperature: 900 ºC

Calciner residence time: 1 hour

Bond Work Index: 15 kWh/t

Crusher P80: 10 mm

Pulveriser P80: 212 µm

TECHNO-ECONOMICS

The results of this preliminary techno-economic evaluation based on the assumptions made above are given in the table

below

Flowsheet option Operating cost

1 Operating cost

2

(US$/lb MHP) (US$/lb Ni) (US$/lb MHP) (US$/lb Ni)

A – H2SO4 only 2.20 3.81 3.12 5.41

B – SO3 only 1.63 2.83 2.37 4.12

C – H2SO4 & SO3 1.72 2.94 2.48 4.25

1. Without capital cost recovery.

2. With capital cost recovery.

Flowsheet option Capex NPV

(A$M)

IRR

(%) (A$M) (A$/annual lb

Ni)

A – H2SO4 only 1284 14.6 2391 37.4

B – SO3 only 1035 11.8 3064 51.4

C – H2SO4 & SO3 1049 11.9 2903 49.0

This data showed that the largest single contributor to the capital costs was the acid plant, followed by the ore/acid

calcination kilns and ore demoisturising kilns. The major contributing factors to the operating costs were natural gas (30-

35%), capital cost recovery (30-31%), labour and related costs (10-12%), maintenance and consumables (9-10%), followed

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by electricity (7%). The hematite by-product (from pyrite roasting) credit contributed A$338 M, A$352 M and A$307 M to

the NPVs in the above table for options A, B and C respectively, corresponding to about 11 – 14% of the NPVs.

The acid consumption amounted to 624 kg 98% (w/w) H2SO4/t moist ore for option A based on the ore composition and

sulphation reaction extents assumed. The sulphuric acid and/or sulphur trioxide consumption rates for the other two

options are given in the following table. The annual quantities of the main inputs and outputs for the three options are

also given in this table. The pyrite combusted in the roaster makes up for the sulphur leaving the calcination plant as

sulphates in the hot calcined product. This product goes to the hydrometallurgical plant for leaching. In the order of 1.2 –

1.6 Mt of pyrite (100% FeS2) is required annually.

A – H2SO4 only B – SO3 only C – H2SO4 & SO3

H2SO4 consumption (kg/t moist ore) 624 - 250

SO3 consumption (kg/t moist ore) - 546 346

Mined ore (Mtpa) 7.93 7.93 6.89

Pyrite (Mtpa) 1.29 1.35 1.18

Magnesite – process – total (Mtpa)

- as magnesite (Mtpa)

- as magnesia (ktpa)

1.45

1.38

33

1.61

1.54

33

1.41

1.34

33

Magnesite – low grade – tailings (Mtpa) 1.69 1.69 1.46

MHP (dry) (tpa) 69,270 69,281 68.340

Contained nickel (tpa) 39,955 39,961 39,881

Hematite by-product (Mtpa) 0.86 0.90 0.78

Overall nickel recovery (%) 78.7 78.7 90.5

A sensitivity analysis was carried out by varying the values of the process parameters/variables by ±50% about their base

case values, although in the case of sulphuric acid/sulphur trioxide consumption an increase of only 15%-25% (depending

on the option) was possible as this corresponded to maximum sulphation reaction extents of 100%. The results of this

analysis indicate that the nickel selling price had the greatest effect on the NPV followed by the natural gas price (or

conversely consumption) and acid consumption. A 10% change in the nickel selling price changes the NPV by A$460 M,

while a 10% change in the natural gas price changes the operating cost by 0.11, 0.07 and 0.07 US$/lb MHP for options A,

B and C respectively, while the changes in NPV were A$90 M, A$54 M and A$60 M respectively.

The significant effect of natural gas price and/or consumption on the process operating cost and NPV, indicates that

opportunities to recover and utilise waste heat from the process should be realised wherever possible. Sources of waste

heat include hot gases from the ore calcination kiln and the pyrite roaster, as well as exothermic reaction heat from

pyrite roasting, SO2 to SO3 conversion and SO3 absorption stages. Even if only 35% of the available waste heat could be

recovered and utilised, it would reduce the operating cost by about US$0.28/lb MHP or US$0.49/lb Ni (Option A).

However, offsetting this reduction in operating cost is a potential increase of US$0.11/lb MHP (or US$0.19/lb Ni) resulting

from a carbon tax on the direct emissions of CO2 from the process (Option A).

Summervale Project Exploration Licence 7281, Nyngan NSW

Permits are in place to conduct a 30+ hole drilling program on the Company’s nickel iron mineralisation at EL 7281

‘Summervale’ approximately 25 km north of Nyngan in NSW.

Further drilling is planned at EL 7281 to realize the extent of the prospective mineralization and determine a rudimentary

calculation on the potential of the project.

Negotiations with the land owner as to timing of the program are in progress and the drilling program should be

completed by the end of this calendar year.

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Syerston Project, Exploration Licence 7805, NSW

As previously announced, further work has been completed on the polymetallic discovery at EL 7805, near Syerston,

NSW.

Original assays from Hole Sy10a showed a significant interval of scandium mineralisation within the licence boundaries, at

relatively shallow depth.

Assay results from Hole Sy10a indicate an 11 meter interval averaging 352ppm Sc (from 10-11 to 20-21 meters; in red

below).

Syerston Drill Hole Sy10A

Depth (m) ME-ICP61

Sc ppm

0- 1 116

1- 2 87

2- 3 84

3- 4 90

4- 5 113

5- 6 173

6- 7 176

7- 8 160

8- 9 142

9- 10 192

10- 11 425

11- 12 274

12- 13 240

13- 14 431

14- 15 351

15- 16 339

16- 17 311

17- 18 389

18- 19 461

19- 20 398

20- 21 258

21- 22 178

22- 23 144

23- 24 92

24- 25 95

25- 26 99

26- 27 90

27- 28 84

These encouraging results prompted a soil sampling program consisting of 83 soil samples around and to the north and

north-west of the ‘discovery’ Hole Sy10a. The average spacing interval between soil samples was approximately 100 x 50

meters.

The soil samples were collected from 20-25 cm depth below surface, with -80um fraction samples submitted for assay.

Results (in Sc ppm) are shown on the map below, including zones indicating >200pm Sc within the first meter.

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These extraordinary scandium results from near surface have proved to be an exciting development for the Company.

Samples for platinum assay have also been submitted from the same area. Once these results are received, an additional

soil sampling program will take place to extend the area of interest. Results from both sampling programs will guide the

extent of a drilling program planned for later this year.

Jervois believes that the outlook for Scandium in the near future, and longer-term, is very encouraging, given the broad

range of potential applications for the metal. Jervois is relatively optimistic that the Scandium mineralization at Syerston

could be extensive and a possible contributor to the supply of Scandium for any of these applications.

Internal Metallurgical Test Work- Syerston (Fifield) NSW

Bench-scale tests by Dr Hal Aral on the Syerston scandium (Sc), platinum (Pl) and gold (Au) mineralisation (with some low

nickel/cobalt grades but perhaps recoverable) showed wet magnetic separation will not upgrade Sc, Pt and Au contents

to any significant extent. On the other hand, chemical extraction gave better results.

The best tests completed involved a proprietary reduction in particle size of the ore samples. This technique was

followed by the Company’s acid bake process and yielded an excellent 91.2% recovery of Scandium and 66% of the nickel

content which is low grade (about 0.3% Ni). Dr Aral believes that this radical new approach can be improved by more

efficient roasting. It is also likely to be applicable to the Company’s Nyngan scandium resource and possibly even to the

Company’s nickel/cobalt resource at Young NSW. This work is considered to be a real breakthrough for the treatment of

Scandium bearing laterites and with possible application to nickel/cobalt laterites in general. Further laboratory work is

essential to fully establish this.

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EMC Metals and Nyngan Scandium Resource. Exploration Licences 6095, 6009, 7664, NSW

The dispute with Toronto Stock Exchange listed EMC Metals and Jervois, continues. In dispute is the adequacy of a self-

stated pre-feasibility study delivered under the terms of the now expired Exploration Joint Venture Agreement. The

matter goes to trial in the Victorian Supreme Court on 4 February, 2013. Jervois retains 100% equity in the project

pending the trial outcome.

Exploration in Western Australia – December Quarter 2012

Exploration in WA at Lake Barlee and Lake Austin has been hampered by wet conditions during the period. Exploration

Licences 29/652, 77/1460, 77/1461 and 77/1398 have now been surrendered to permit more funds to be allocated to

those WA tenements where exploration prospects are higher.

Exploration Licence 29/861 at the Mt Ida Gold Project is expected to be granted soon.

Mt Ida Project – Exploration Licence 29/861

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Exploration Licence 59/1257 at the Nalbarra Project has had no work completed in the quarter. Drilling programs for

uranium and a palaeo channel for precious metals has been planned for this tenement, subject to funding.

Lake Austin has better access with a road crossing the tenement, so preliminary exploration work was able to be carried

out during the quarter.

Lake Austin Project Exploration Licence E21/130

50% Jervois Mining Limited & 50% Peter Alexander Peebles (Jervois has earned a 100% holding 50% is subject to

transfer)

Exploration in Western Australia consisted of mapping, sampling and spectrometer survey of Exploration Licence 21/130

near the gold mining town of Cue in the state’s Midwest. The results have been superimposed on the topographic map

of the tenement. The licence is 3.8 kilometres from Austin Downs Uranium Resource. Exploration focus was on precious

metals Gold and Platinum Group Elements, Rare Earth Oxides and Uranium.

The reprocessed radiometric map (below) shows surface radioactive activity in a red colour. This activity can be a result

of radioactive granites or a near surface uranium deposit. The drainage channels, which are mainly subsurface, are

shown in a yellow colour.

Results have shown anomalous background counts and eU ppm (spectrometer results). Samples taken where the current

drainage system ‘pinched’ showed anomalous Gold Au, Platinum Pt, Palladium Pd and Uranium U. This may indicate the

presence of palaeochannels enriched by these minerals. Rare earth elements were also present in the samples as well as

Beryllium, Thorium and Strontium which indicate that pegmatitic rocks or later stage granite intrusives may be present in

the area and may be enriched in these minerals. Further work such as the purchase of close spaced aerial magnetics is

warranted to better understand the underlying geology. Drilling across the drainage system is also warranted to test for

palaeo channels for precious metals as well as lake sediments for potash (fertiliser) and uranium.

Reprocessed Radiometrics Map showing

areas of high radiometric activity and drainage

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Lake Austin showing wet conditions

SAMPLE

ID ZONE EASTING NORTHING

Spectrometer

Results eU ppm

Laboratory

Results U ppm COMMENTS

LA001 50 576282 6950286 5.7 4.8 Rb Ls (Lake)

LA002 50 576177 6950009 2.5 5.6

Lake Channel - Near

Causeway Drainage (Rb Ls)

LA003 50 573158 6946609 4.1 5.6 Rd Br Ls

LA004 50 572935 6946577 No sample 7.8 Main Surface channel - sand

LA005 50 575931 6949558 3.9 5 Lake Sed Rd Br

Table showing Lake Austin Spectrometer (eU) and Laboratory Uranium (U) Results (above).

Map showing Spectrometer Uranium Results

SAMPLE ID ZONE EASTING NORTHING Au1 ppb Pt ppb Pd ppb COMMENTS

LA001 50 576282 6950286 2 10 5 Rb Ls (Lake)

LA002 50 576177 6950009 13 5 5 Lake Channel - Near Causeway Drainage (Rb Ls)

LA003 50 573158 6946609 4 0 5 Rd Br Ls

LA004 50 572935 6946577 3 5 0 Main Surface channel - sand

LA005 50 575931 6949558 4 0 0 Lake Sed Rd Br

Table showing Lake Austin Laboratory Gold Au, Platinum (Pt) and Palladium (Pd) Results (above).

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Map showing Laboratory Gold Results

SAMPLE ID ZONE EASTING NORTHING La ppm Ce ppm Pr ppm Nd ppm Sm ppm Eu ppm Gd ppm Tb ppm

LA001 50 576282 6950286 19.2 35.3 3.52 11.8 2.3 0.35 2 0.3

LA002 50 576177 6950009 18.7 35.5 4.04 12.4 2.4 0.45 2.2 0.35

LA003 50 573158 6946609 15 28.4 2.9 10.4 2 0.4 1.8 0.25

LA004 50 572935 6946577 25.7 48.5 5.4 16.6 3.15 0.65 2.8 0.4

LA005 50 575931 6949558 20.8 38.7 4.44 13.4 2.55 0.5 2.4 0.35

Dy ppm Ho ppm Er ppm Tm ppm Yb ppm Lu ppm COMMENTS

1.75 0.34 1.6 0.16 1.35 0.18 Rb Ls (Lake)

2 0.4 1.25 0.18 1.3 0.2 Lake Channel - Near Causeway Drainage (Rb Ls)

1.6 0.32 0.9 0.12 0.85 0.12 Rd Br Ls

2.45 0.5 1.4 0.22 1.35 0.24 Main Surface channel - sand

2.05 0.42 1.2 0.18 1.3 0.22 Lake Sed Rd Br

Tables showing Lake Austin Laboratory Rare Earth Results (above).

Sample ID ZONE EASTING NORTHING Ca % K % Mo ppm

Rb ppm S ppm

Sr ppm Th ppm

LA001 50 576282 6950286 2.32 1.38 2.8 67.6 17700 979 13.6

LA002 50 576177 6950009 5.63 1.23 6.1 63.2 44500 655 13.3

LA003 50 573158 6946609 14.4 0.79 3.4 40.8 122000 1340 9

LA004 50 572935 6946577 0.94 1.52 8.9 77.4 10300 6450 15.6

LA005 50 575931 6949558 1.65 1.36 7.4 70.4 13600 152 14

Table showing Lake Austin other anomalous results (above).

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GLOSSARY

Later stage Granite Intrusives Cylindrical intrusion of younger igneous rocks into an older geological terrain. ppm Parts per million by weight (10,000ppm equals 1.00%). Other symbols used Calcium (Ca), Potassium (K), Molybdenum (Mo), Rubidium (Rb), Sulphur (S), Strontium (Sr), Thorium

(Th), Uranium (U) and Spectrometer Uranium (eU)

Rights Issue Results

The non–renounceable pro–rata Rights Issue to Eligible Shareholders at an issue price of $0.001, closed on 12 October

2012. One new fully paid ordinary share was offered for every three shares held. If fully subscribed the issue would have

raised approximately $1,198,197.07 before issue costs.

The Board is pleased to announce that Shareholders subscribed for a total of $456,806.73 (including funds from the issue

of Additional Shares to those Shareholders who applied). This is equivalent to an acceptance rate of 38% which was

viewed as an excellent response in the current investment climate. Jervois subsequently placed a further 17,000,000

shares of the rights issue shortfall during the quarter at $0.001 per share.

A further 450,000 fully paid ordinary shares were issued to Baycrest Capital, LLC at $0.10 per share to satisfy the

commitment fee payable under the Continuous Investment Agreement entered into by the parties on 12 December,

2012.

Offer of Purchase: Nyngan Scandium Project

Jervois Mining Limited (The Company) has received, and rejected, an offer of $4.0 Million, from Bloom Energy of

California, for the outright purchase of 100% of the Nyngan Scandium project. The offer was conditional and is

considered totally inadequate.

Share Consolidation Completed

Also during the quarter, Jervois completed a one hundred (100) for one (1) share consolidation on 10 December, 2012.

Shareholders approved the consolidation at Jervois’ 2012 Annual General Meeting held on 29 November, 2012. As at the

end of the quarter, Jervois currently has 41,134,606 fully paid ordinary shares on issue. All of these shares are quoted

securities on the ASX.

AUD $3 Million Continuous Investment Agreement Signed With Baycrest Capital, Llc

As noted above, Jervois Mining Limited (“Jervois” or “Company”) entered into a Continuous Investment Agreement

(“CIA” or “Agreement”) with Baycrest Capital, LLC (“Baycrest”) for the provision of up to AUD $3 million, over a 36 month

period on 12 December, 2012.

Baycrest is a long-only Australian fund, part of a global family of funds that invests in growth-stage and mature public

companies.

Under the terms and conditions of the Agreement, Jervois has the right to require Baycrest to purchase up to $3 million

worth of Jervois fully paid ordinary shares via a series of placements. The total dollar amount and issue price of each

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purchase is governed by the Agreement. Jervois has full control over the timing, price and number of shares Baycrest

purchases; the issuance of shares is strictly at the discretion of Jervois, and there are no obligations for Jervois to issue

shares to Baycrest.

The main features and benefits of the Agreement are as follows:

1. Baycrest will commit to purchase up to AUD $3 million of Jervois’ fully paid ordinary shares (“Shares”) over a 36 month

period on 12 December, 2012.

2. When Jervois requests capital, Baycrest will directly purchase a minimum amount of $25,000. Jervois has the option to

request Baycrest to purchase larger amounts by mutual agreement by both parties. The agreement does not have any

penalties for non-usage or termination, and it is entirely Jervois’ decision when Baycrest buy shares.

3. The price of the shares issued to Baycrest will be set at the lowest daily volume weighted average price per share

within a 20-day pricing period, minus a commission of 4%.

4. There is a hard floor set at $0.10 per share that Jervois will not request Baycrest to purchase shares, thus protecting

existing shareholders.

5. Baycrest will undertake to not hold more than 19.99% of the Company’s Shares.

6. There are strict anti-shorting provisions

7. The agreement is secured by a $45,000 commitment fee to Baycrest to be settled via the placement of 450,000 Shares

at an issue price of $0.10 per Share. Baycrest qualifies as a professional investor under section 708(11) of the

Corporations Act 2001 Cth.

Expenditure For Quarter Ended 31 December 2012

Combined expenditure on exploration and evaluation assets, and investments in exploration partnerships for the Quarter

was $187,188.

DUNCAN C. PURSELL

MANAGING DIRECTOR

The information in this report that relates to Exploration Results or Mineral Resources is based on information compiled by D.C. Pursell (MAusIMM)

and Mr D. Foster, (MAusIMM). D.C. Pursell and D. Foster have sufficient experience which is relevant to the style of mineralisation and type of

deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2004 Edition of the

‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. D.C. Pursell and D. Foster consent to the inclusion. For

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report for the quarter ended 31 december 2012 … · 1/31/2013 · this work was carried out by...

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