Element 25 has secured $10 million through a discounted share placement to grow its Butcherbird manganese project in the Pilbara.
Manganese developer Element 25 has raised $10 million to fund an expansion to its Butcherbird project in the Pilbara.
The Osborne Park company confirmed on Friday it would distribute 36.3 million new shares for 28 cents each, representing a discount of more than 13 per cent to its 10-day average price.
Settlement is expected on September 18, with shares earmarked for issue the following day.
In exchange, Element 25 said proceeds would support the $64.8 million Butcherbird Expansion Project, designed to lift its annual production capacity to 1.1 million tonnes of manganese concentrate.
Managing director Justin Brown said the funds would accelerate procurement of long-lead items and engineering work.
The company has already secured a $50 million senior debt facility from the Northern Australia Infrastructure Facility. It continues to work with financiers on other funding options, like royalty streams and offtake prepayments.
Mr Brown said expanding Butcherbird was central to the company’s dream of producing high-purity manganese sulphate monohydrate (HPMSM), a key material in EV batteries.
Element 25 intends to build its first HPMSM refinery in Louisiana, supported by a $US166 million grant from the United States Department of Energy and $US115 million in funding from carmakers General Motors and Stellantis.
“The placement will allow us to progress the fully approved Butcherbird expansion in line with our project plan,” Mr Brown said.
“Expanding Butcherbird is an important part of our strategy to produce HPMSM, with our first facility planned for Louisiana and a development strategy backed by General Motors, Stellantis and the US Department of Energy.”
Butcherbird, located south of Newman, is touted as one of the world’s largest onshore manganese resources, with reserves tallying up to more than 100 million tonnes.
According to Element 25, the expansion is expected to create 150 construction jobs and 230 operational roles across the project’s 18-year mine life.
A feasibility study (updated in January) forecasted a pre-tax net present value of $561 million and an internal rate of return of 96 per cent. Average annual cashflow is estimated at $70.5 million.
The expansion project received the state government's rubber stamp earlier this year, while Federal Resources Minister Madeleine King described the development as a major boost for northern Australia in a June announcement.
Element 25 said Butcherbird’s expansion would also position the company to benefit from an industry shift towards lithium manganese-rich battery chemistries, which use up to seven times more manganese than high-nickel formulations.
Sydney-based Petra Capital acted as sole lead manager and bookrunner for the placement.
Element shares are down nearly 12 per cent on the news, worth 29.5 cents in early afternoon trade. The company has a $67.5 million market cap.
