Element 25 Ltd (ASX:E25) has gained access to a A$30 million funding facility thanks to an at-the-market (ATM) subscription agreement with Acuity Capital.
The manganese stock can draw down on the funds over the next three years as it develops its battery-grade high-purity manganese sulphate monohydrate (HPMSM) processing capabilities.
Ultimately, E25 retains full control over how it uses the facility, including the timing, issue price and the number of shares distributed under each placement tranche.
The funding comes as the ASX-lister prepares to release a feasibility study examining a US-based HPMSM plant during the quarter.
The fine print
It’s important to note that Acuity Capital and the ATM do not place any restrictions on E25 raising capital through other methods.
If the manganese stock does use the ATM, the final issue price will be calculated as the greater of a floor price set by E25 and up to a 10% discount to a volume-weighted average price over a period E25 chooses.
As security for the ATM, the company has agreed to place 9.5 million fully paid ordinary shares to Acuity Capital for no cash consideration.
In this vein, 5 million shares will come from the company’s listing rule capacity, while the other 4.5 million rely on shareholder approval.
If the ATM terminates or matures, E25 can buy back and cancel the shares for no cash consideration (subject to shareholder approval).
About Element 25
Element 25 operates the Butcherbird Manganese Project in Western Australia, where it’s out to develop HPMSM products for traditional and new energy markets.
Ultimately, its aim is to become an industry-leading, world-class, low-carbon battery materials manufacturer.
Butcherbird is regarded as a world-class manganese hub, with more than 260 million tonnes classified as JORC resources.
The project straddles the Great Northern Highway and the Goldfields Gas Pipeline, providing turnkey logistics and energy solutions.
Down the line, Element 25 plans to integrate renewable energy into the power solution to target a zero-carbon footprint for the project, which is expected to also reduce energy costs.
A cleaner, lower carbon flowsheet and high penetration renewable energy is tipped to place Butcherbird at the forefront of sustainable high-purity manganese production.