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Element 25’s updated Butcherbird PFS highlights robust returns even at conservative manganese prices

Published: 02:46 03 Dec 2020 GMT

Element 25 Ltd - Element 25’s updated Butcherbird PFS highlights robust returns even at conservative manganese prices
The PFS envisages a simple payback period of 6 months from the start of operations.

Element 25 Ltd (ASX:E25) (FRA:QFP) has completed an update to the pre-feasibility study (PFS) released in May 2020 for its Butcherbird Manganese Project in the southern Pilbara region of Western Australia.

The update has a compelling base case and expansion case economics that builds on the May 2020 PFS and updates key macro-economic and other study parameters whilst also adding expansion option study results.

 

The Butcherbird PFS shows a low capital requirement of $17 million plus $3.2 million working capital with an average base case annual operating cashflow of $39.6 million for the first five years.

The PFS update has no changes to the proven and probable ore reserve of 50.55 million tonnes at 10.3% manganese containing 5.22 million tonnes manganese (4.28 million tonnes recoverable manganese).

Importantly, the PFS envisages a simple payback period of 6 months from the start of operations with beneficial production scheduled to commence in Q1 2021.

The base case involves the annual production and sale of 364,000 tonnes per annum (year 1- 5 range 300,000-390,000) of lump manganese ore grading 30-35% manganese.

Butcherbird financial summary – years 1 to 5

The base case net present value (NPV) of A$583 million highlights that the project is robust and offers returns even at conservative pricing assumptions.

Butcherbird breaks even at a manganese price of US$2.38/dmtu (dry metric tonne unit) 33% CIF (cost, insurance, and freight) China for the life of the project.

Pit design

It has been determined that following geotechnical assessment and due to the nature of the mineralisation which consists of interlayered layers of manganese ore and clay/shale waste, that drill and blast will not be required at the project.

The Yanneri Ridge mineralisation will be mined by dozer ripping and extraction using conventional loaders to mine directly from the mining face into a mobile crusher.

Where tramming distances become excessive, excavators will load haul-trucks which will transport ore to the crusher.

Approval process

The Native Vegetation Clearing Permit (NVCP) and Project Management Plan (PMP) for the project have already been approved.

Other statutory approvals including a mining proposal, mine closure plan, works approval and water abstraction licence have been developed and submitted for the relevant departmental approval.

Element 25 'well funded' as it progresses PFS on Butcherbird manganese project

Element 25 Ltd's (ASX:E25) Justin Brown sits down with Proactive's Andrew Scott while at Mines and Money in London 2019. The company's flagship asset is the Butcherbird manganese deposit, which has been described as Australia’s largest onshore manganese resource. ''The PFS is around 90%...

on 27/11/19