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Element 25’ Butcherbird Project: Turbocharged By Early Cashflow From A Low-Capex Concentrate Export Opportunity

  • May 20, 2020 09:21 PM AEST
  • Team Kalkine
Element 25’ Butcherbird Project: Turbocharged By Early Cashflow From A Low-Capex Concentrate Export Opportunity

Mineral Explorer, Element 25 Limited (ASX: E25), advancing its wholly-owned globally significant, low cost, high-purity Butcherbird Manganese Project in Western Australia’s south Pilbara Region, a Tier-1 mining jurisdiction, has released its Investor Presentation highlighting the significant updates and road ahead in this ongoing endeavour.

Investor Presentation – Key Highlights

Experienced Owner’s Team

The Company is led by an experienced team supported by industry leading consultants from a broad spectrum of disciplines. The team is all skin in the game, bringing over 100 years of combined experience in mining and processing industries.

The Butcherbird Manganese Project

It is a large resource with over 260 Mt of manganese ore in Measured, Indicated and Inferred JORC resources, plus Maiden Proved and Probable Reserve of 50.6M tonnes at 10.3% Mn for 5.22t of contained manganese.

Manganese is a versatile element, a common component in several alloys including zinc and magnesium alloys, used as an essential input in the steel-making process, portable batteries, and aluminium cans. It is also the fourth most used metal on earth in terms of tonnage, behind iron, aluminium and copper.

The project location boasts of an excellent local infrastructure (bitumen road and gas pipeline) with very simple geology, low strip ratio and free dig (no blasting) mining required.

The recently completed Pre-Feasibility Study (PFS) has highlighted outstanding economics, confirming that Australia’s largest onshore manganese resource can produce near term cashflow from a low capital cost manganese concentrate mining operation.

Concentrate Export PFS Delivers Robust Economic

Key highlights from the PFS include-

  • Low capital cost A$14.5M.
  • NPV8: Nominal A$441M (A$283M Real)
  • IRR: Nominal 255% (223% Real)
  • Strong cashflows.
  • Simple payback 6 months.
  • Long mine life.
  • Mine plan utilises only 20% of the total resource.

Development Strategy

A staged development strategy has been outlined in the PFS to generate early cashflow from the concentrate export start-up stage, that would help in funding the expansion to utilise the very large resource and maximise Project returns.

A simple low-cost mechanical beneficiation process would be used which would yield around 30-35% medium grade Mn concentrate, suitable for smelting for manganese alloys, for future hydrometallurgical feed for producing Electrolytic Manganese Metal (EMM) or even premium markets.

The Logistics strategy involves road haul to Port Hedland on the Great Northern Highway, use of around 6-7 trucks per day followed by bulk shipping via Utah Point facility.

Element 25 has also provided a development timeline given below, whereby first production is being targeted by Q1 2021, with baseline environmental studies completed, detailed engineering underway and discussions with offtake partners and equipment suppliers for long lead time items ongoing. Other approval processes are also being well-advanced while the Company has also defined the project financing strategy.

Development Timeline

Element 25 is excited for the road ahead as the demand for manganese is growing globally and supply seems to be largely constrained. To the Company’s advantage, the Butcherbird Project is closer to the end users as compared to many other Projects, positioning Element 25 on a clear path of transitioning from an explorer to a miner.

The E25 stock closed the trading on 20 May 2020 at AU$ 0.345, with a market capitalisation of AU$ 36.81 million.

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