Element 25 Limited (ASX:E25) has received commitments from investors for $35.5 million to fund the planned Stage 2 expansionof manganese concentrate production from the 100% owned Butcherbird Manganese Project in Western Australia.
Managing Director,Justin Brown, said the proceeds will also allow the company to put a dedicated team in place to accelerate the flowsheet and plant design work to produce Lithium-Ion battery grade manganese sulphate, or HPMSM from the concentrate produced from the Project.
Mr Brown said manganese is emerging as an increasingly importantingredient for EV batteries, with potential supply constraints for nickel and cobalt forcing battery manufacturers to look to high manganese cathodes to produce the vast amount of cathode material required by the EV industry in coming years. The recent announcement by Volkswagen reinforces this transition to high manganese content on these cathode materials.
The Project is ideally placed to feed this potential demand, withadvanced flowsheet developmentwork undertaken in 2019 and 2020 confirming a simple, unique, ambient temperature and atmospheric pressure leach process for E25 ores which, when combined with offsets, will target the world’s firstZero Carbon Manganesefor EV cathode manufacture.
Blackwood Capital has acted as lead broker to the placement.
The Butcherbird Manganese Project is a world class manganese resource with current JORC resources in excess of 263 Mt of manganese ore. The company completed a Pre-Feasibility Study (PFS) with respect to developing the deposit to produce manganese concentrate for export to generate early cashflow with a modest capital requirement. The outstanding economics and low capital hurdle of less than A$17 million for the first stage of development will allow the Company to develop the project in a relatively short timeframe. The delivery of this first stage of production is fully funded and already underway.
The PFS also highlighted the Project has the potential for significant growth beyond the initial Stage 1 production volumes (the studies examined the potential for a 2X and 3X expansion to Stage 1 within 12 months of initial commissioning) and the company expects to expedite the expansion of the Project once Stage 1 is fully operational.
In addition to the concentrate export business, the Company has completed extensive research & development and laboratory test work into the production of high purity manganese products including battery grade manganese
Metal (HPEMM). The work has highlighted that the Butcherbird ores are highly amenable to an ambient temperature, atmospheric pressure leach process, resulting in a very efficient extraction of the manganese into solution, the key requirement for the cost effective and sustainable production of HPMSM and HPEMM.
The Project straddles the Great Northern Highway and the Goldfields Gas Pipeline, providing turnkey logistics and energy solutions. The Company plans to integrate renewable energy into the power solution over time to target a zero-carbon footprint for the Project, which is expected to also reduce energy costs. A cleaner, lower carbon flowsheet and high penetration renewable energy will place Butcherbird at the forefront of sustainable high purity manganese production.
Based on the results of the Pre-Feasibility Study completed in May 2020, E25 has published a Maiden Ore Reserve for the Project of 50.55Mt in the Proved and Probable categories.