Element 25 is angling for a new beginning at the Butcherbird manganese project – only this time with a much greater production capacity.
Element 25 is angling for a new beginning at the Butcherbird manganese project – only this time with a much greater production capacity.
The Osborne Park mining minnow today released a feasibility study detailing the economic and production upside it hopes to achieve by expanding Butcherbird to a 1.1-million-tonne nameplate capacity.
It comes roughly a year after the project was mothballed due to depressed ore prices, but Element is working to get the project back online to service rising manganese demand from some of the world’s largest carmakers.
The company’s manganese mine – estimated to host 274 million tonnes of concentrate – is set up to generate 365,000 tonnes of the coal-black ore every year, meaning the expansion project would almost triple the project’s production capacity.
Key numbers from the Butcherbird expansion study. Photo: Element 25
Thanks to recent uptick in resource and reserve numbers, Element is confident it can deliver an expansion project with a $561 pre-tax net present value and a 96 per cent internal rate of return – numbers that pushed the E25 share price up nearly 8 per cent today.
The company expects the Butcherbird expansion will cost just shy of $65 million to complete, with payback anticipated in one-and-a-bit years.
Element’s Pilbara-based project has been in the limelight since before the expansion metrics were announced. Back in September, the ASX-lister secured US$166 million (A$270 million) in funding from the U.S. Government to develop a Louisiana-based high-purity manganese plant.
That 65,000 tonne-per-annum processing facility would take ore from Butcherbird and transform it into battery-grade manganese sulphate monohydrate, fuelling the electric battery needs of major vehicle brands like General Motors and Stellantis.
The manganese aspirant has already secured regulatory approval for its expansion project, announcing it had received the green tick from the Department of Energy, Mines, Industry Regulation and Safety last week.
Element 25 managing director Justin Brown told investors that expanding the plan to develop Australia’s largest onshore manganese resource was all about capturing economies of scale.
“With a mine life of 18.3 years at a production rate of 1.1 million tonnes per annum … and annual free cashflow of A$70.5 million, the project shows outstanding economic potential.
“The Butcherbird manganese project will produce manganese for traditional steel markets, as well as supplying feedstock to Element 25's planned high-purity manganese sulphate refinery in Louisiana.”
Expanded mining production and process commissioning at the Butcherbird project is expected to kick within 14 months of the company reaching an FID and securing project financing.
