Developing High-Grade Manganese Projects for the Battery Industry
This Giyani Metals profile is part of a paid investor education campaign.*
Giyani Metals (TSXV:EMM) is focused on the development of its three manganese projects in the Kanye Basin of Botswana, Africa. The company’s flagship K.Hill project is a near-surface deposit currently going through a feasibility study to produce, on-site, both high-purity electrolytic manganese metal and manganese sulfate, key cathode ingredients for batteries in the expanding electric vehicle (EV) market.
CEO Robin Birchall said via telephone, “We’re going to be one of the lowest-cost, lowest-carbon footprint and lowest-CAPEX manganese producers supplying the rapidly expanding battery electric vehicle market.”
Giyani Metals’ Company Highlights
- Manganese oxide deposit in a supportive mining investment jurisdiction
- Robust project economics: 82 percent IRR and C$389M NPV
- Low project CAPEX of C$155M
- Feasibility Study due H1 2021
- Resource upside potential at K.Hill, as well as at the two nearby projects, Otse & Lobatse
- Well-positioned to leverage the growth in the battery electric vehicle market
- Experienced management and board with a track record of successful project delivery
The Preliminary Economic Assessment, last updated in April 2020, boasted a low CAPEX with attractive NPV and IRR. The feasibility study is expected to be completed in H1 2021. Management believes there is scope for improving on these already impressive economics when the feasibility study is released.
Near All Necessary Infrastructure
The K.Hill project site is situated on the Trans-Kalahari highway—the only sealed road that runs from the west to the east coast of Africa. The site is served by all necessary infrastructure within 10 kilometers, including sealed roads, a substation, water and a 45,000-inhabitant town.
Whilst there is optionality for the route to market in neighboring Namibia, Mozambique and South Africa, it is most likely that product will be hauled by road to Johannesburg and then railed to the Port of Durban, the largest and busiest port in sub-Saharan Africa.
A Large Land Package in Southern Botswana
Botswana is a minerally rich and diverse country. Since its independence in the 1960s, the country has developed a well-established mining industry. It is probably best known for its Debswana diamond mining operations (50/50 joint venture between De Beers and the Government of Botswana), which are some of the richest diamond mines in the world. As a result, the country’s workforce is well educated and there is little in the way of corruption. Botswana is also the only African country with an investment-grade rating, which is why it is often nicknamed the Switzerland of Africa.
The Mass Adoption of Electric Vehicles is Imminent
As the cost of manufacturing electric vehicles continues to fall, their market share is projected to increase. UK Research firm Rho Motion forecast that almost a third of new vehicles by 2030 will be electric.
According to Benchmark Mineral Intelligence, the cost to produce an NCM battery is around the US$100/kWh mark. This is the threshold where many analysts believe the EV is on par with the cost of a conventional internal combustion engine vehicle and therefore an inflection point for demand.
Manganese is a Vital Battery Component
Batteries with a Nickel Manganese Cobalt Oxide (NCM) cathode chemistry currently occupy circa 45 percent of the battery market for EVs. This is expected to increase to almost 80 percent within a decade, according to Benchmark Mineral Intelligence.
At its Battery Day on September 22, 2020, Tesla (NASDAQ:TSLA) announced that the cathode chemistry for their intermediate-range vehicles and non-industrial stationary storage units will contain one-third (33 percent) manganese. This was the first time Tesla referred to the manganese content in its battery chemistries. This is over three times the manganese contained in an NCM 811 cell, which UK research firm Benchmark Mineral Intelligence anticipates will be one of the market-leading cathode chemistries by 2030. Expectations for Tesla’s future market share are also high. Elon Musk, co-founder and CEO of Tesla, stated, “longer-term, we want to replace at least 1 percent of the total vehicle fleet on earth … which is about 20 million vehicles a year.”
Sources of high purity manganese
According to Benchmark Mineral Intelligence, 93 percent of the high purity manganese used in batteries is produced in China. The remaining comes from three producers in Japan, South Africa and Belgium. None of these facilities owns their own ore and as a result, they must transport it from multiple sources thousands of kilometers away. Giyani not only has the strategic advantage of being a non-Chinese source of manganese, it has its own ore source adjacent to the processing plant.
The Importance of a Low Carbon Footprint
It would be unthinkable for an electric car maker, especially those European and North American brands, to build an electric vehicle with a greater carbon footprint than that of its conventional internal combustion engine vehicle counterpart. Therefore, every gram of carbon used in electric vehicle production is counted. Currently, circa 40 percent of the carbon footprint of an electric vehicle is associated with the battery, the largest component by far. In order to bring this figure down, a major part will be on the sustainable sourcing of the cathode’s raw materials.
Botswana has only approximately 40 days of rainfall per year, meaning its sun index is very high, which makes it a great location for solar power. Giyani is currently investigating ways of harboring the solar energy to power its K.Hill operation.
Giyani Metals’ Board & Management
Giyani’s board and management have a strong track record of project delivery and have the experience to bring this project into production.
- 18 years of experience in the investment banking, management and development of resource companies
- Executive Chairman of Silver Bear Resources
- Co-Head of Forbes & Manhattan London
- V.P. Investment and Corporate Banking at BMO Capital Markets
- V.P. Corporate Finance at Canaccord
Thomas Horton—Vice President, Business Development
- 13 years of sector experience in finance, business development and engineering
- VP Corporate Development at Pembridge Resources
- Investment Executive at Duke Street Capital
- Project Engineer at AMEC Americas & Fluor Corp
Jonathan Henry—Non-Executive Chairmam
- 25 years of experience in the mining company leadership and management
- Executive Chairman of Ormonde Mining
- President and CEO of Gabriel Resources
- CEO of Avocet Mining
Eugene Lee—Independent Director
- Over 20 years of experience in mine finance capital markets, financial reporting, risk management, internal controls and corporate governance
- Director, Marketing at Hudbay Minerals
- Non-Executive Director of Nevada Zinc Corp
- CFO at Premier Royalty Inc.
John Petersen—Independent Director
- 40 years of experience in law, sustainability and energy storage and a global thought leader on energy and sustainability issues
- Director & VP at ePower Engine Systems Inc
- Chairman at Axion Power International Inc
- Partner at Fefer Peterson & Co
Michael Jones—Independent Director
- 30 years of experience in mine management, corporate finance and corporate development
- Director at Hatch
- Corporate Development at African Minerals
- Head mining corporate finance at Canaccord
- Various mining engineering roles at Gencor, DE Beers and Debswana
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