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Mineral Exploration company, Element 25 Limited (ASX: E25) has been focussed on the development of its world-class Butcherbird Manganese Project (100%-owned) located in Tier-1 Mining jurisdiction, Western Australia’s southern Pilbara Region, to produce high-purity Electrolytic Manganese Metal (EMM) for steel industry and Manganese Sulphate (HPMSM) for lithium-ion batteries (LIBs) that will drive the Electric Vehicle (EV) transition, both being high-growth markets.
The Butcherbird Manganese Project – Ripe for Development
The Butcherbird Manganese Project hosts Australia’s largest onshore manganese resource containing over 260 million tonnes of manganese ore in Measured, Indicated and Inferred JORC resources. There is great infrastructure endowment in the vicinity like Goldfields Gas Pipeline and Gt Northern Highway passing directly adjacent to and through the mineralised envelope. Besides, port solutions include North to Port Hedland or south to Fremantle.
Source: Company’s Website
Mineral Resources
Source: Company’s Website
The drilling at Butcherbird so far has revealed a flat lying stratiform ore body. A simple geology would make mining at Butcherbird exceedingly simple as the ore zone begins at surface and extends laterally throughout. In addition, the project’s low strip ratio of 0.2:1 is based on preliminary pit optimisations while the zone is situated above the water table. Given the features of this ore, no selective mining would be required.
A Simple, low cost, free dig mining was confirmed via a 40t bulk sampling programme completed in December 2019. Element 25 recently reported successful production of a commercial grade lump product from this programme.
For details, Read: Element 25 Reports High-Grade Manganese Concentrate from bulk sample test programme at Butcherbird
Element 25 is presently advancing a Pre-Feasibility Study (PFS) that would provide a robust base case for the commercialisation of this world class manganese resource. A number of key consulting groups are engaged for the same and work-to-date has identified various potential modifications to the flowsheet implementation strategy that is expected to positively impact capital and operating costs before finalisation of the PFS in 2020 and in preparation for the Definitive Feasibility Study (DFS) to follow.
As announced in the Quarterly Activities Report for the three months to 31 December 2019, all key multiple work streams for the Butcherbird PFS are active including:
- Metallurgy: Flowsheet optimisation test work underway. Around 40 tonnes bulk sample mined to provide feed for the test programmes and piloting programme.
- Programme Design: The field programme was completed in December 2019 with samples delivered to ALS Laboratories in Perth in early January 2020.
- Marketing/Offtake: Commodity Research and Consulting firm Roskill has submitted the final draft of the manganese market report covering both EMM and the battery grade MnSO4 market statistics and forecast pricing, both are in line with assumptions used in the Scoping Study released in 2018. Several Offtake agreement discussions are also being progressed with potential Japanese, Korean, US and European consumers of EMM. Most of the potential end users represent major steel producers in jurisdictions outside China while Element 25 also did a productive visit to Japan in late October 2019 to continue negotiations with senior personnel from several major steel producers as well as global metals traders.
- Power: PFS power generation report has been completed by Advisian (Worley Group), with improvements to the Scoping Study and discussions are ongoing with tier one energy companies. Realtime solar and wind data continues to confirm modelling assumptions. The power solution for project is planned to be an Optimal Energy Mix of wind-gas power station. Besides, the Company, in collaboration with Murdoch University, is exploring the potential for a more dynamic operational regime which has the potential to allow for a higher renewable energy penetration.
- Project Finance: The Northern Australia Infrastructure Facility (NAIF) has committed to provide debt financing for the Butcherbird Manganese Project based on ongoing investigation, while Burnvoir continues to engage with several groups in relation to project financing. Furthermore, under the seventh round of Cooperative Research Centres Project (CRC-P) grant program, the Company was awarded $ 1,342,223 for the pilot plant test programme by the Department of Industry, Innovation and Science (DIIS) during the December 2019 Quarter.
- Technical Team: Strengthening and broadening of the owner’s team is ongoing.
Royalty Sale Agreement
Recently in February 2020, the Company executed a binding sale and purchase agreement with SilverStream SEZC dba Vox Royalty to dispose of a portfolio of royalties relating to several project areas at a value consideration of $ 500,000 in SilverStream shares.
Mining-focused royalty and streaming company, SilverStream is developing a portfolio of royalties and streams across a diverse commodity base including more than 25 royalties and streams worldwide, that comprise both cash-flowing as well as long-term growth-oriented projects.
Although, the sale is subject to resolution of first rights of refusal held by third parties and the successful listing of SilverStream on the TSX no later than 15 May 2020, the proceeds from this sale have been planned to be directed towards the development of the world class Butcherbird Project.
Stock Information: With a market cap of ~ $ 13.8 million and ~ 92.03 million shares outstanding, the E25 stock is currently trading at $ 0.150 on 15 April 2020 (AEST: 02:51pm).
