Manganese explorer Element 25 secures $2 Mn Standby Facility via CPA signed with Acuity Capital

A mineral exploration company, Element 25 Limited (ASX:E25) is focussed on the development of its world-class flagship Butcherbird Manganese Project (wholly-owned) located in the southern Pilbara region of Western Australia.

Element 25 announced today, i.e. 18 March 2020, that the company has executed a Controlled Placement Agreement (CPA) with Acuity Capital for the provision of up to $2 million of standby equity capital to Element 25 over a period of 23 months. The standby facility is expected to support the development of the Butcherbird High Project and also for working capital purposes.

Controlled Placement Agreement - Details

Under the Controlled Placement Agreement (CPA), Element 25 would have full control of all facets of the placement process such as: retaining sole discretion to decide whether or not to use the CPA, the number of issued shares, the lowest issue price of shares and also the timing of the placement tranches going forward (if any). Besides, it is not mandatory for Element 25 to use the CPA and the Company has the liberty to terminate the same at any point of time, without having to pay any cost or penalty.

Furthermore, Acuity Capital, and the placement agreement, have not put any restrictions on Element 25 to raise capital via alternate ways. In the case Element 25 chooses to use the CPA, the Company has the right to set a floor price and the final issue price would be calculated as the larger of the floor price set by the Company and the 10% discount to the EWAP (Volume Weighted Average Price) over a period chosen again at the sole discretion of Element 25.

As a collateral for the placement agreement, Element 25 has also agreed to place around 4.8 million ordinary shares from its LR7.1 capacity, at zero consideration to Acuity Capital (Collateral Shares). However, the Company may, at any time, rescind the CPA and initiate the buy back of Collateral Shares for no consideration. The termination would require the approval of the shareholders.

The Butcherbird High Purity Manganese Project – Overview

The Butcherbird High Purity Manganese Project hosts resources of more than 263 Million tonnes of manganese ore. So far, Element 25 has completed a Scoping Study for this project to develop the deposit for the production of high purity manganese sulphate (HPMSM) for the lithium-ion battery (LIB) cathodes and Electrolytic Manganese Metal (EMM) for steel industry applications, both being high-growth markets.

A Pre-Feasibility Study (PFS) is currently being finalized by the company that would further underpin the prospectivity and commercial potential of this world-class deposit.

The Butcherbird Project has a conducive infrastructure in the vicinity such as the Great Northern Highway and the Goldfields Gas Pipeline providing turnkey logistics and energy solutions.

The Company’s plan is to integrate renewable energy with the power solution to reduce carbon footprints as well as achieve energy costs reductions. High penetration renewable energy and a cleaner & lower carbon flowsheet are ready to put the manganese project at the forefront of viable metal production.

Stock Performance: Element 25 Limited has a market capitalisation of around $11.04 million with approximately 92.03 million shares outstanding. On 18 March 2020, the E25 stock settled the day’s trade at $ 0.110.

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