Summary
- With easing of restrictions across Western Australia, Element 25 is gradually reopening business operations and advancing development of its flagship Butcherbird Manganese Project (100%-owned).
- Year-to-date, the Company reported various milestones like delivery of Butcherbird PFS suggesting a staged production start-up via low capex manganese concentrate export operation, successful implementation of measures against COVID-19 and negotiations ongoing for offtake agreements.
- Production at Butcherbird targeted for Q1 2021 as demand for manganese continues to grow against limited supply options globally.
Manganese focussed Element 25 Limited (ASX: E25) experienced a momentous year-to-date connected to its 100%-owned world-class Butcherbird Manganese Project located in Western Australia’s highly prospective south Pilbara Region. The Company achieved progress across all work streams such as completing the Pre-Feasibility Study (PFS) for Butcherbird Project developing plans for a potential start of production via low capex manganese concentrate export operation and evaluation of potential offtake agreements. At the same time, the Board and Management continued to monitor the situation around COVID-19 health and economic crisis while taking all the steps necessary to maintain safe working conditions for the staff.
Regardless of uncertain operating conditions, Element 25 pro-actively took steps to preserve cash, and on 16 May 2020, the Company announced gradual re-opening of business operations as restrictions eased across Western Australia
The Butcherbird Manganese Project – PFS Delivers Robust Metrics; Production Due 2021
The project hosts over 260 million tonnes of manganese ore and is Australia’s largest onshore manganese resource, with conducive surrounding infrastructure endowment such as Goldfields Gas Pipeline and straddling Gt Northern Highway passing directly through the mineralised envelope. The resource is characterised by very simple geology, low-strip ratio and free dig mining (no blasting required).
Source Company Website
Source: Company’s Website
In 2018, the Company completed a scoping study to produce high-purity manganese sulphate (HPMSM) for the lithium-ion battery (LIB) cathodes and Electrolytic Manganese Metal (EMM), both being high-growth markets and designed for steel industry applications.
In March 2020, Element 25 executed a Controlled Placement Agreement (CPA) with Acuity Capital for provision of up to $ 2 million of standby equity capital over 23 months, to support the advancement of the Butcherbird High Project and for working capital purposes. Subsequently on 23 March 2020, the Company reported having successfully produced a commercial-grade lump product from the bulk sample test programme, which was undertaken at the Butcherbird Project, starting December 2019.
Most recently, Element 25 delivered the Pre-Feasibility Study (PFS) for the Butcherbird Manganese Project, assessing the sale and export of manganese concentrate over a 42-year mine life, as well as confirming outstanding economic metrics. The Company is thrilled to have identified opportunity for a low capital, accelerated cashflow start-up for Stage 1 development of the project, which would help in generating long-term shareholder value.
Good Read: Getting Acquainted with Element 25’s target Commodity Manganese: Market Demand and Outlook
The staged development strategy would ensure early cashflow to fund the expansion to utilise the extensive resource and maximise Project returns. The key highlights of the PFS are given below.
Source: Investor Presentation
As per the project development timeline provided by the Company, baseline environmental studies have been completed, detailed engineering is underway, discussions are ongoing with equipment suppliers for long lead time items, necessary approvals are being well advanced, potential offtake partners have been engaged and production is targeted for Q1 2021.
To the Company’s advantage, demand for manganese is growing with supply constraints worldwide. With significant milestones achieved, as envisioned despite the bottlenecks, the Butcherbird Project is all set to produce clean, low cost, ethical manganese products for world markets.
Stock Information: The E25 stock settled the day’s trade on 10 June 2020 at AUD 0.43, with a market capitalisation of AUD 43.28 million.E25 has generated positive returns of 158.82% Year-to-date, 166.67% in the last six months, 203.45% in the last three months and 109.52% in the last one month.
Disclaimer
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