ASX-listed aspiring manganese producer, Element 25, has been granted key environmental approvals by the relevant government authorities that pave the way for it to click into serious construction mode at its Butcherbird manganese project 130km south of Newman in WA’s southern Pilbara.
The Perth-based company says the environmental approvals marked the final milestone it needed to square away before the main construction of the new Butcherbird mining and beneficiation operation could commence in earnest.
As a result, Element 25 says work crews have now been mobilised to site to undertake capital works including roads, processing plant, tailings storage dam and associated infrastructure to allow the commissioning of the project to take place in the March quarter next year.
The $211 million market-capped company says it was able to successfully navigate the comprehensive environmental approval process within only 12 months.
Element 25 Managing Director, Justin Brown said: “This is the culmination of an extensive environmental assessment and community consultation process and it allows Element 25 to continue to rapidly progress its mine development and construction plans.”
Earlier this month Element 25 tabled a bumper updated pre-feasibility study, or “PFS” on the planned Butcherbird mine after tweaking various economic inputs and design parameters following its PFS mark I released in May this year.
The PFS mark II financial metrics, which the company described as “compelling”, included higher free cash flows, a higher net present value and a higher internal rate of return for the project.
Updated base-case pre-tax operating cash flows for the first five years of Butcherbird manganese ore production now stand at $39.6 million per annum, compared with $32.1 million a year in the PFS seven months ago.
Latest NPV and IRR pre-tax numbers were $583 million and 387 per cent, respectively, up from $283 million and 223 per cent in the earlier version.
Pre-production CAPEX has been lifted to $17 million from a staggering low of $14.5 million due to a mining camp being included in the revised base case. However, that is more than offset by the anticipated working capital requirement dropping to $3.2 million from $9.3 million.
The expected project capital payback period remains at a spectacular six months.
Element 25 sees base-case manganese ore production averaging 366,000 tonnes per annum in the first five years of production operations at Butcherbird from slightly increased plant throughput of 1.3 million tonnes per annum.
The company has already locked in the sale of all the manganese output at Butcherbird for the initial five years or what it calls the proposed first stage of development having entered into an offtake agreement with OM Materials, a subsidiary of ASX-listed and Singapore-based integrated manganese and silicon company OM Holdings.
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By Matt Birney
