Element 25: Stock Spiraling, Butcherbird Project Advancing, First Production Targeted For Q121

Summary

• Manganese is a versatile element with growing demand and robust markets, though supply has constraints.
• Element 25 is building a globally significant, low cost, high purity manganese project- Butcherbird Manganese Project, that is turbocharged by early cashflow from a low capex concentrate export opportunity.
• Recent concentrate export PFS has delivered robust economics, and with project delivery on time and budget, the Company is targeting the first production in Q1 2021.
• Trading on the ASX, E25 has delivered returns of 205.56 % in the last six months while its YTD return is 223.53 % (as on 19 August 2020).

Element 25 Limited (ASX:E25) regards itself to be “Australia’s next manganese producer” and is operating ethically and sustainably in the Tier 1 jurisdiction of Western Australia, one of the top mining investment jurisdiction, globally. It is firmly on the path of transitioning from an explorer to a miner with the goal of becoming a globally significant manganese producer by producing clean, low cost, ethical manganese products for world markets. Besides, Element 25’s team brings more than 100 years of combined experience in mining and processing industries, is outcomes focused- all with “skin in the game”.

The Company is currently developing a world class manganese resource at its 100 % owned Butcherbird Manganese Project, to produce high quality manganese concentrate for export markets. Timely advancement of the Project has been fetching ample investor attention to the Company’s stock, which traded at $0.55 on 20 August 2020 and has delivered returns of over 189 % in the past one year.

ALSO READ: Element 25 Reports “Excellent Progress” in June Quarter, Stock Riding High

Butcherbird Manganese Project: “A Resilient Project”

Fully owned by Element 25, the Project is a large resource, currently >260 Mt of manganese ore in Measured, Indicated, and Inferred JORC resources. Maiden Proved and Probable Reserve of 50.6M tonnes at 10.3% Mn for 5.22t of contained manganese further underpin the 42-year PFS. Besides, it leverages from excellent local infrastructure and has a low strip ratio. The Company regards it as Australia’s largest onshore manganese deposit with simple outcropping geology allowing for free-dig low cost mining.

Pre-Feasibility Study highlights outstanding economics. To know more about the Project’s impressive PFA, READ HERE: Element 25’s Butcherbird Manganese Project PFS: Robust low-capital Rapid Production Start-Up; Stock Spikes 100%

The below depicts the current stance of the Project-

Kalkine Image (Source: E25’s Investor Presentation, 20 August 2020)

Element’s Development Strategy for Butcherbird Project

Element 25 believes that early cashflow from the concentrate export startup stage will fund expansion to utilise the very large resource and maximise project returns. The simple, low cost beneficiation comprises low cost, free dig mining of ore from surface; screening, and wet scrubbing to remove clays; and ore sorting to reject shale waste to produce Mn concentrate.

Besides, simple mechanical beneficiation yields a 30-35% medium grade Mn concentrate with very low levels of deleterious elements. The Company reports that this concentrate seems suitable for smelting for manganese alloys or future hydrometallurgical feed for producing Electrolytic Manganese Metal. These unique characteristics may also make this product suitable for premium markets.

MUST READ: Element 25’s Butcherbird Manganese Project: Key Development Milestones To Date

Element’s Development Timeline for Butcherbird Project

With approvals process well advanced and some works underway, the Project development timeline targets first production Q1 2021.

Butcherbird Development Timeline (Source: E25’s Investor Presentation, 20 August 2020)

Manganese Overview

By virtue of sulfur-fixing, deoxidizing, and alloying properties, manganese is deemed essential to iron and steel production. So much so, the latter accounts for most domestic manganese demand in the US, as high as the range of 85% to 90% of the total, as per the USGS. Besides, construction, machinery, transportation sectors along with alloys and dry cell batteries industries are leading end users of manganese.

Here are some more facts: Steel production consumes ~ 90 % of global manganese supply. At the same time, about another 10 % of supply goes into the production of high purity manganese products including Electrolytic Manganese Dioxide, Electrolytic Manganese Metal, and Manganese Sulphate.

Currently, manganese markets are robust with growing demand owing to growth in traditional end use markets, traditional alkaline battery markets as well as swift expansion in EV production and grid storage devices capacity across North America, Asia, and Europe. However, supply has constraints, especially because of issues arising due to Covid-19.

Interestingly, there is no substitute for manganese in many cases!

The market is excited to observe Element 25 unfold more developments in due course, as it places Butcherbird at the forefront of sustainable metal production.

MUST READ: Element 25 Braces Up To Begin Butcherbird Production In Q121, Key Milestones Met