Jervois Global (ASX: JRV) (OTCQX: JRVMF) had a horrible time of it last week, sinking 40% in the one day. That took the annual loss on the share price to 90% and change. It has now come back from those lows by some 16% today. That's some mitigation of the loss of course but in the way that percentages work this still leaves JRV down 90% and change upon the year. Given the size of the falls the increase on Monday is very small change that is.
As to what the disaster well, that's just one of those things which can happen with a mining stock. Essentially, everyone else has done enough mining to make this particular plan not worth the effort. Yes, this does sound strange given that we all know about the electric vehicle revolution, we all know those batteries are going to need cobalt. So, cobalt mining is a pretty good thing to be doing, right? In that grander sense of what's good for society, sure, cobalt mining's a great thing. But not necessarily for the people who actually go cobalt mining. And that's the Jervois problem, as we've said. Lots of other people had the same idea, making many to most of these individual plans not worth it.
What has happened is that so much cobalt exploration and investment has taken place that the market price for cobalt is below the usual production cost. That's below the all=in production cost that is, below the mixture of CapX and OpeX that make up total costs. But often enough the current price is still above OpeX. So, those mines that are already open will continue producing as they are making gross margin, current income is above current costs. But any decision to open a new mine faces the reality of revenues being below what is required to cover the CapX. So, new mines aren't going to get financed nor open - just what has happened at Jervois.
As to the share price jump today, there's an old Wall Street saying - even a dead cat will bounce at least once if you drop it from high enough. Given that Jervois isn't going to be - for the time being - opening its major asset, that Idaho cobalt project, it's difficult to see what value there is in the company. But we can expect bounces in the price along the way just because - what we might call “dead-catting”.