The company, which trades on the ASX and TSX-V, would use the refinery to refine concentrate from its Idaho operation and return cobalt metal to the US.

Jervois will acquire the São Miguel Paulista nickel and cobalt refinery from Companhia Brasileira de Aluminio – a subsidiary of Votorantim – for $22.5-million, payable in tranches.

A feasibility study to restart the refinery, including the processing of Idaho concentrate, would start in the fourth quarter, Jervois stated.

Jervois also pointed out that the refinery enabled a revised development plan at its Nico Young nickel/cobalt heap leach development, in Australia, to a mixed hydroxide product, suitable for processing based in the existing São Miguel Paulista flowsheet. This would result in estimated capital savings of A$200-million from the prior preliminary economic assessment of Nico Young.

Meanwhile, Jervois on Tuesday announced the results of a bankable feasibility study (BFS) into the Idaho cobalt operation, confirming its potential to establish a near-term, low cost cobalt/copper/gold mine with significant opportunity to increase the mineral resource and extend the mine reserves once mining starts.

Based on a processing rate of 1 200 t/d, the project could produce 1 915 t/y of cobalt, 2 900 t/y of copper and 6 700 oz/y of gold, over a mine life of seven years.

The project is expected to require a capital investment of $78.4-million, and will have an operating cost of $7.45/lb of payable cobalt. The post-tax net present value has been estimated at $95.7-million, and the internal rate of return at 40.6%, with earnings before interest, taxes, depreciation and amortisation estimated at $54.8-million a year.

The BFS was based on a cobalt price of $25.lb, a copper price of $3.lb and a gold price of $1 750/lb.

Jervois told shareholders that the company had also completed engineering design and costing, flowsheets to produce separate cobalt and copper concentrates, and calcined cobalt concentrate as part of the BFS.

The company has received offtake offers from potential customers for a variety of products to support economic trade-offs between flowsheet alternatives.

Jervois pointed out that with its agreement to acquire the Sao Miguel Paulista nickel and cobalt refinery and with its existing offtake negotiations, the company had significant flexibility and optionality in terms of how it moved forward to convert the Idaho concentrate into refined products.

At this time, the company’s preferred path forward was through refining a bulk concentrate at the new refinery in Brazil.