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Element 25 Limited (E25 or Company) (ASX: E25; OTCQX: ELMTF) is pleased to announce that it has completed a Feasibility Study (Study or FS) to investigate the potential to expand the production of manganese concentrate at the Company’s 100% owned Butcherbird Project (Project), located in the southern Pilbara region of Western Australia.
Butcherbird Expansion Feasibility Study Targets 1.1 Mtpa Manganese Production to Capture Economies of Scale.
A strong result supporting progress toward a Decision to Mine.
The Study demonstrates strong economics with robust economic returns and rapid capital payback. The financial summary of the Study outcomes are shown below.
HIGHLIGHTS
- The FS examines the expansion to 1.1Mtpa manganese concentrate production using expanded open-cut mining methods, a modified primary comminution circuit and a dense media separation (DMS) back-end solution to optimise grade and recoveries.
- The expansion establishes Butcherbird as a low-cost Mn operator (USD 2.76/dmtu C1 cost) able to produce at a cost lower than the low manganese sale price points seen within the Mn market.
- The FS utilises all the available measured and indicated resources within the mine plan supporting this Study. The Company plans to undertake infill drilling in areas containing Inferred Resources, outside the current mine plan, within the next 12 months targeting an additional 20-25 years of mine reserves at the proposed production levels.
- The Measured, Indicated and Inferred Mineral Resources used to support the 7.2 years mine life from 2024 to 2031 represents 36.0% of the total mineral resource inventory within the granted mining lease M52/1074.
- Low capital requirement of AUD 49.8M capital.
Average base case annual operating cashflow of AUD 57.3M at full production. - No changes to the Proven and Probable Ore Reserve of 49.2Mt at 10.2% Mn containing 5.0Mt Mn (4.1Mt Recoverable Mn).
- Forecast cashflows generate a simple payback period of 14 months from start of operations.
- Expanded mining production and process commissioning is currently scheduled to commence within 11 months, subject to final investment decision and securing project financing.
- The base case involves an annual production and sale of 1.1M tpa of lump manganese ore grading 32% Mn.
- The concentrate production strategy complements and enhances the Company’s plan to develop the proposed high purity manganese sulfate (HPMSM) plant in Louisiana to supply offtake partners General Motors LLC(GM) and Stellantis NV (Stellantis) with high purity manganese for EV battery manufacture1.
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This article includes content from Element 25 Limited, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
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Element 25 Limited
Overview
Element 25 (ASX:E25, OTCQX:ELMTF) is a manganese-focused company with 100 percent ownership of the largest onshore manganese deposit in Australia, which is currently producing high-quality manganese concentrate. The company’s Butcherbird Mine in Western Australia is currently producing around 365,000 tons per annum. The company is advancing towards 1 million tons (Mt) per annum by optimizing its engineering processes. Element 25 (E25) has set the pace by getting up and running quickly.
Element 25 has also moved quickly to progress its ambitions to be a globally significant producer of ethical high-purity manganese sulphate monohydrate (HPMSM) for supply to the fast growing EV battery raw material supply chains. The company has signed a binding agreement with Stellantis NV (NYSE:STLA) to supply battery-grade HPMSM from E25’s proposed USA-based HPMSM processing facility. Stellantis has further completed its first US$15-million equity investment in E25 in July 2023 towards the development of a battery-grade HPMSM facility in the USA.
Element 25 has also entered an off-take deal with General Motors (GM) to supply the car manufacturer up to 32,500 metric tons of manganese sulfate to support GMs annual production of more than 1 million electric vehicles in North America. Under this agreement, GM will provide an US$85-million loan to E25 to partially fund the construction of the new facility in Louisiana, USA, which will produce battery-grade manganese sulfate. Expected to be the first of its kind in the US, the facility will process manganese concentrate from E25’s mining operations in Western Australia to produce HPMSM.Manganese is Building Momentum
Sales of EVs have exceeded 10 million in 2022 with market analysts expecting the momentum to continue in 2023 and beyond. It’s clear that consumers and automakers are embracing EVs worldwide, with gigafactories springing up across the globe to support the EV transition. Yet, EVs require significant materials to support the increasing demand.
Manganese is essential in manufacturing the nickel-manganese-cobalt cathodes EVs require and is the cheapest and most abundant material available. Additionally, nickel and cobalt have significant supply constraints, while manganese does not. The relative abundance and high value in the use of manganese as a cathode material has prompted automakers such as Tesla, Volkswagen and Stellantis to turn to high-manganese cathodes to satisfy their supply chain requirements.
Manganese also has strong existing demand for usage in steel, aluminum products and specialty alloys. There is no substitute for the element in steel. Mining companies focusing on this vital element are uniquely positioned to serve both established and emerging industries.
The Future has Always Been Electric
Element 25 is committed to delivering on its strategy of producing battery grade HPMSM for EV batteries to power the global transition away from fossil-fuel-powered mobility.
The advancement of EV batteries requires a vast amount of cathode materials. Put simply, nickel and cobalt supplies simply cannot meet projected demand for New Energy Vehicle (NEV) growth.
By 2040 it is estimated that 58 percent of new vehicles will be EV or hybrid.
As demand continues to rise, EV battery makers globally are choosing to adopt manganese-rich cathode designs for safer, more cost-effective battery solutions and E25’s high-purity manganese strategy is ideally placed to feed these surging markets.
Advanced flowsheet development work undertaken in 2019 and 2020 has confirmed a simple, proprietary leach process for E25 ores which, when combined with offsets, will target the world’s first zero-carbon manganese for EV cathode manufacture. Flowsheet optimization for inclusion in upcoming feasibility studies is ongoing.
Strong ESG Credentials
Element 25 understands the importance of an excellent environmental, social and governance (ESG) rating for serving the EV market, as this rating directly reflects on the companies it supplies. The company is working towards producing zero-carbon, high-purity manganese by leveraging sustainable technologies at every step in its process through its Zero Carbon Manganese campaign. This campaign includes sustainable extraction, using renewable energy, low-carbon processing and carbon offsets. Element 25 has partnered with Circulor to provide real-time insights into its ESG status.
Element 25’s Butcherbird Mine has a Joint Ore Reserves Committee (JORC) compliant resource estimate indicating over 260 megatonnes of manganese ore. This significant deposit is Australia's largest onshore manganese deposit, with an estimated mine life of 42 years. The mine does not require blasting or dewatering, instead leveraging a simple mining and processing wash plant.
Importantly, Element 25’s board and management team has decades of experience across a range of key sectors including mining, legal expertise, mineral project development, corporate administration and operational excellence. The management team’s track record of success provides the company with a great platform to deliver on its planned milestones as E25 positions itself as a leading manganese player on the global stage.
Company Highlights
- 100-percent ownership of Australia's largest onshore manganese mine – the Butcherbird Manganese Deposit – comprising more than 260 million tons (Mt) of manganese ore in JORC resources.
- Long mine life of 42 years using only 20 percent of the global resource, significant potential to expand with further drilling.
- Currently producing high-quality manganese lump concentrate for the steel industry.
- Multi-staged expansion strategy to increase concentrate production and move into downstream processing to produce high-purity manganese sulphate monohydrate (HPMSM) as electric vehicle (EV) fuel for lithium-ion batteries.
- Expansion plans to increase ore production to 1 Mt per annum well advanced.
- Off-take and funding agreement with General Motors (GM) to supply the EV manufacturer up to 32,500 metric tons of HPMSM annually to support GM’s annual production of more than 1 million EVs in North America.
- GM to provide US$85 million in project finance for the HPMSM facility in Louisiana, USA.
- Offtake and funding agreement with global automaker Stellantis NV (NYSE/MTA/Euronext Paris:STLA) includes recently completed US$15-million equity investment to fund HPMSM short and medium term project execution costs.
- STLA is now Element 25’s largest shareholder with a 10.2-percent shareholding.
- STLA has committed to offtake for 15 percent of HPMSM production from the Louisiana facility.
- Element 25 is led by a management team with decades of experience in mineral project management, corporate administration and international law.
Key Projects
Butcherbird Manganese Project
Located in Western Australia, the Butcherbird Manganese Project is presently producing manganese concentrate for the steel industry. The mine has already reached production and is now optimizing its process to improve output. E25 is working towards producing high-quality HPMSM for use in new energy markets.
Project Highlights:
- Australia’s Largest Onshore Manganese Deposit: The Butcherbird Project has a JORC-compliant total resource estimate of 263 megatonnes of ore at 10 percent manganese. The deposit has an estimated mine life of 42 years and the potential to increase drilling in the future.
- Four-stage Growth Strategy: Element 25 has established a four-stage strategy as outlined below:
- Stage 1 (delivered): 365 ktpa
- Stage 2 (2023): 1 Mt per annum by optimizing engineering processes
- Stage 3: Produce sustainable high-purity manganese.
- Stage 4: High-purity manganese sulphate with zero carbon footprint
- Positive Feasibility Study: A feasibility study released in 2023 confirmed the technical and financial feasibility of producing HPMSM at a Louisiana location for sale to local and international offtake partners. Aside from indicating a net present value of US$1.66 million, the feasibility study also showed an environmental impact that is significantly lower than incumbent producers.
- Focusing on an excellent ESG Rating: Achieving and maintaining a great ESG rating is vital to serving the EV market. Element 25 has partnered with Circulor to provide real-time tracking and insights into its ESG rating throughout the entire operation.
Management Team
John Ribbons - Chairperson
John Ribbons is an accountant who has worked within the resources industry for over fifteen years in the capacity of company accountant, group financial controller or company secretary. Ribbons has extensive knowledge and experience with ASX-listed production and exploration companies. He has considerable site-based experience with operating mines and has also been involved with the listing of several exploration companies on the ASX. Ribbons has experience in capital raising, ASX and TSX compliance and regulatory requirements.
Justin Brown - Managing Director
Justin Brown is a geologist with over 20 years of experience in global mineral exploration and mining. He has been involved in the full spectrum of mineral exploration through to mining in a range of commodities. Brown has also held a number of board positions, including an executive role with Element 25 Limited since 2006. He has a strong track record of closing successful commercial transactions and brings a well-rounded set of skills to the management of the Company’s activities.
Sam Lancuba - Non-executive Director
Sam Lancuba is a chemical engineer with more than 40 years’ experience in the global fertilizer industry. Lancuba has worked in research and development, process engineering, manufacturing and management. Following 27 years at Incitec Pivot Limited, an ASX top 50 company, He has been providing expert consulting services for industry clients in Australia, New Zealand, USA, South America, Europe, India and China.
Fanie van Jaarsveld - Non-executive Director
Fanie van Jaarsveld is an experienced company director and has held numerous senior management and executive positions over a career spanning more than 40 years. With a demonstrated history of working in the mining and metals industry, van Jaarsveld is the managing director for OM Manganese which operates the Bootu Creek manganese mine in the Northern Territory and is highly skilled in mining, mineral processing and operational management. He has strong business development expertise and will be a key asset in achieving the company’s production targets at the current manganese operation as well as helping to guide the planning and implementation of the company's expanded production plans and the downstream production of HPMSM. van Jaarsveld has an ND in analytical chemistry from the Cape Peninsula University of Technology - Cape Town.
Sias Jordaan - VP Battery Minerals & Marketing Manager
Sias Jordaan has been involved in the stainless steel production and raw material supply markets as well as rare metals markets for over 25 years. Jordaan held various roles within BHP Billiton in South Africa, The Netherlands and Western Australia in the stainless steel, ferrochrome and nickel divisions. As a result, he has gained extensive experience in the procurement, marketing and logistics of various steel-making metals. Jordaan was also involved in the management team that commissioned the Ravensthorpe Nickel Plant. More recently he performed study work for Arafura Resources Ltd (2011-2015), specifically the Nolans Rare Earths Project located in the Northern Territory, including the study into a suitable offshore separation facility and the establishment of a Letter of Intent with a Korean-based partner. Jordaan has an accounting degree and is qualified as a chartered accountant in South Africa. He also holds a diploma in international logistics from the University of Navarra and is a licensed real estate and business agent in Western Australia.
Neil Graham - VP Battery Minerals & Development Manager
Neil Graham is a chartered chemical engineer with more than 30 years of international experience in the chemical and resources industries. His experience in greenfield and brownfield project development, driving operational change and delivering performance turnarounds has been gained in various managing director/general manager roles, across a breadth of organizations and locations. These roles have been European, Asian and Australian based with multi-nationals, such as Huntsman and Orica, and West Australian resources businesses.
Clint Moxham – General Manager Operations
Clint Moxham has joined the team as general manager operations. Moxham’s key responsibilities include statutory and operational oversight of the safe operation of the Butcherbird Manganese Mine, implementation and oversight of improved operational processes and continued improvement in plant preventative maintenance targeting improved run times to increase production. He is a vision-driven miner with a track record of delivering greenfield and start-up operations. Moxham has a reputation of safe operations with a career-long record of team management and mining operations success.
Ian Huitson - Study Manager
Ian Huitson is a mining executive with 33 years’ experience in executive, operational and technical roles in the manganese, chromite, gold, silver and nickel industries in Australia, Africa and Asia. Huitson has extensive manganese experience through roles as study manager at Shaw River Manganese (2012-2014), chief operating officer at Auvex Resources (2009-2011), group mining engineer at Consolidated Minerals Ltd (2005-2007) and resident manager at Consolidated Minerals’ Woodie Woodie mine site (1999-2005). In addition to the above, Huitson has executive management experience including roles as operations director and managing director at Monarch Gold Mining Company (2007-2009). Prior to this, he had 15 years’ experience as a mining engineer with WMC Resources, Dominion Mining/Plutonic Resources and the Walhalla Mining Company. He has a degree in mining engineering and is a fellow of the AusIMM. Huitson has completed multiple scoping and pre-feasibility studies throughout his career.
March 2024 Quarterly Report
Butcherbird Manganese Operations, Western Australia
- Detailed design, planning and procurement commences for Stage 2 Expansion Project to expand Butcherbird manganese ore production to 1.1 million tonnes per annum in line with a Feasibility Study (FS) completed in January 20241.
- Northern Australia Infrastructure Facility (NAIF) completes a strategic assessment of Butcherbird Stage 2 Expansion Project.
- Expansion Project is now proceeding with the detailed due diligence phase of NAIF’s assessment process.
- Manganese ore prices increasing, potentially in response to the South 32 Limited (S32) production disruption at Groote Eylandt. S32 is now estimating a repair timeline of ~12 months2.
Battery Grade High Purity Manganese (HPMSM) Development – Louisiana, USA
- E25 progresses engineering development, permitting, logistics and project financing via offtake and funding agreements for HPMSM facility in USA.
- Air Permit public meeting successfully completed paving the way for the formal issuance of the permit.
In January 2024, Element 25 Limited (E25, the Company) released a Feasibility Study (FS) on the proposed expansion of its 100%-owned Butcherbird Manganese Operations in Western Australia (WA) to target manganese concentrate production of 1.1 million tonnes per annum (Mtpa). The FS demonstrated strong economics with robust economic returns and rapid capital payback.
Expansion of the processing facility at Butcherbird is an important step in providing feedstock for the Company’s planned battery grade high purity manganese sulphate monohydrate (HPMSM) project to be built in Louisiana, USA in partnership with General Motors LLC and Stellantis NV3.
E25 is now, via a dedicated owners team supported by selected external contractors and consultants, advancing detailed design, planning and procurement activities for the Stage 2 expansion in parallel with financing.
Figure 1. Butcherbird Expansion Project Feasibility Study Summary4.
In parallel with expansion activities, the Company suspended Butcherbird’s current production operations, aiming to reduce operational cash outflows and re-focus resources and available cash on implementing the expansion plan outlined in the FS.
50,540mt of manganese concentrate was shipped on 27 January 2024. Approximately 15,000mt of manganese concentrate was subsequently transported to Port Hedland and will form part of a shipment scheduled to be loaded in early May 2024 (estimated). Stockpiles have now been depleted in line with care and maintenance activities on site, with haulage winding back and ultimately ceasing in early March 2024.
The current schedule anticipates operations to recommence in approximately 11 months following project financing being secured, when E25 plans to increase annual production to 1.1 million tonnes per annum of manganese oxide concentrate. Further detail and an updated schedule will be provided as the project team works through front-end engineering and design (FEED) activities.
Northern Australia Infrastructure Facility Strategic Assessment
During the quarter, the Northern Australia Infrastructure Facility (NAIF successfully completed a strategic assessment of the Butcherbird Stage 2 Expansion Project. The Expansion Project is now proceeding to the detailed due diligence phase of the NAIF assessment process.
Click here for the full ASX Release
This article includes content from Element 25 Limited, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
E25 Progresses USA HPMSM Refinery Plans
Element 25 Managing Director Justin Brown said: “E25 aims to be a leading source of high quality, vertically integrated, traceable and ESG and IRA-compliant battery material to the global electric vehicle industry. Construction of our HPMSM facility in the USA – the first of its kind there – is a key pillar to the strategic plan which aims to position E25 as the industry leading provider of high quality ethically sourced battery-grade manganese to support global electrification efforts.
Engineering Development
Basic engineering packages for specific sections of the plant are being generated by equipment vendors. Design development of the balance of the processing facility is progressing. The project engineers have developed an initial project execution plan, procurement plan and other foundational elements, which are being reviewed. Project controls are being developed to manage cost and schedule.
Figure 1. 3D engineering model development for Louisiana HPMSM refinery.
Schedule
The project schedule has been developed, incorporating all facets of the project, including engineering, permitting, project financing and construction. Commencement of construction and commissioning are under review pending the execution of binding terms on the project site, in addition to the conclusion of project financing activities and a Final Investment Decision by E25’s Board of Directors to commence construction (FID).
The current schedule development provides for approximately 80 weeks of project build time based on the current critical path, however is being reviewed with the aim of compressing construction timelines.
The current timeline assumes no material interruptions to project development once construction commences due to procurement, procurement delays or weather-related disruptions.
Project Site Selection
Discussions continue with the owners of the preferred project site with the intention of combining land, sulphuric acid and ancillary services into the commercial terms. The principal reagent required by the Element 25 HPMSM process is sulphuric acid, and securing reliable supply at competitive commercial terms is an important aspect of the site selection process. Other considerations include inbound and outbound logistics and site permitting requirements. Site-specific engineering activities are currently paused pending finalisation of these commercial agreements.
Permitting
Air Permit
The air permit is a key requirement to commence facility construction. Any source, including a temporary source, which emits or has the potential to emit any air contaminant (defined as particulate matter, dust, fumes, gas, mist, smoke, or vapour, or any combination thereof produced by the process(es) other than natural) requires an air permit. As part of the permitting process, Element 25 has completed a detailed assessment of expected emissions from the HPMSM refinery and provided this information along with supporting documentation to the Louisiana Department of Environmental Quality (LDEQ).
A draft permit has been issued, and comments have been provided to the regulator. The final stage of the permitting process is a public meeting, currently scheduled to be held on 18 April 2024 to be held in the local community centre close to the proposed project site.
The LDEQ Office of Environmental Services will conduct a public hearing in order to receive comments on the proposed Initial Part 70 Air Operating Permit and the associated Environmental Assessment Statement (EAS) for Element 25 (Louisiana) LLC, being the operator of the site. It is anticipated that the final permit will be issued during May 2024 at the conclusion of this process.
Click here for the full ASX Release
This article includes content from Element 25 Limited, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
December 2023 Quarterly Report
QUARTERLY HIGHLIGHTS
Butcherbird Manganese Operations, Western Australia
- Butcherbird Expansion Feasibility Study targets 1.1 million tonnes per annum (Mtpa) manganese production.
- Study demonstrates strong fundamentals, with robust economic returns and rapid capital payback:
- Expansion envisages expanded open-cut mining methods, modified primary comminution circuit and dense media separation (DMS) back-end solution to optimise grade and recoveries.
- Expanded operation will establish Butcherbird as a low-cost Mn operation with a US$2.76/dmtu C1 FOB cost – which will ensure sustainable profitability at lower manganese prices compared to the current pilot operation.
- Low capital cost of A$49.8M with annual operation cashflow of A$57.3M at full production – payback period of 14 months from start of operations.
- Study used all available Measured and Indicated Resources within the mine plan to support a 7.2-year mine life – which represents 36% of the total mineral resource inventory within granted mining lease M52/1074.
- E25 plans to undertake infill drilling in areas containing Inferred Resources, outside the current mine plan, within the next 12 months targeting an additional 20-25 years of mine reserves at the proposed production levels.
Battery Grade High Purity Manganese (HPMSM) Development – Louisiana USA
- E25 approved for US$57 million of tax incentives under Louisiana State’s Industrial Tax Exempt Program (ITEP).
- Two key international patents lodged under the Patent Co-Operation Treaty, expected to be processed in 2024.
Corporate
- Non-Executive Director John Ribbons was appointed Chairman following Seamus Cornelius’ decision to step down from E25 Board.
Click here for the full ASX Release
This article includes content from Element 25 Limited, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
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