Element 25 Ltd (ASX:E25) has completed an “extremely successful” first stage of development at the wholly-owned, world-class Butcherbird Project in Western Australia, with the first manganese ore processed through the plant.
In-spec 30-35% manganese content concentrate has been produced early in the commissioning process and early indications are encouraging with respect to potential plant throughput.
The project build and commencement of commissioning has been completed within 11 months from the delivery of the pre-feasibility study (PFS) published in May last year.
First shipment on horizon
Element 25 managing director Justin Brown said the world-class manganese resource being developed at Butcherbird would hold the company in good stead.
“The project team is now fully focused on normal commissioning activities and is pleased to report that there are no early indications of any significant flaws in any of the processing equipment or stages.
“Reliable, consistent operation and optimisation of the plant to the various types of ore feed identified in the starter pits are some of the initial commissioning objectives.
“This process is expected to roll out over a relatively short period, with all efforts being made to accelerate production rates to nameplate as quickly as practicable.
“This is another important milestone in the development of the project and we look forward to updating the market further in coming weeks as we progress towards our first shipment.”
Well-funded to capitalise on demand
As reported by Proactive, Element 25 is well-funded as it progresses the multi-stage development at Butcherbird, having recently received commitments from investors to raise $35.5 million to support the stage-two expansion of manganese concentrate production.
That support is expected to enable the production of more than one million tonnes per annum, as well as allowing the company to accelerate the flowsheet and plant design work to produce High Purity Battery-Grade Manganese Sulphate (HPMSM) for New Energy Vehicles (NEV).
E25 expects Butcherbird to feed the growing demand for manganese, with potential supply constraints for nickel and cobalt forcing battery manufacturers to look to high manganese cathodes to produce the vast amount of cathode material required by the EV industry.
Advanced flowsheet development work undertaken in 2019 and 2020 confirmed a simple, unique, ambient temperature and atmospheric pressure leach process for E25 ores which, when combined with offsets, will target the world’s first Zero Carbon ManganeseTM for EV cathode manufacture.
Shares on the move
E25 shares have been on the move ever since an updated PFS study was released in December last year.
Shares reached an all-time high of $2.80 in late March and today have been more than 7% higher to $2.39 while the company’s market cap is approximately $340.7 million.
The update showed a compelling base case and expansion case economics that builds on the May 2020 PFS and updated key macro-economic and other study parameters whilst also adding expansion option study results.
The Butcherbird PFS showed 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.
It had no changes to the proven and probable ore reserve of 50.55 million tonnes at 10.3% manganese containing 5.22 million tonnes of manganese (4.28 million tonnes recoverable manganese).
Importantly, the PFS envisaged a simple payback period of six months from the start of operations.
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.
- Daniel Paproth