ASX-listed manganese player, Element 25, is closing in on the scheduled production start-up of early next year at its Butcherbird manganese project in the Pilbara region as it continues to pick off key development milestones. The company has now locked in mining contractors, while key plant and equipment components are on their way to WA.
Element 25 appointed mining, crushing and civil works outfit, Iron Mine Contracting, or “IMC” as the preferred mining contractor for the project. Perth-based IMC, who has also just picked up the surface mining contract for Novo Resources’ developing Beatons Creek gold mine in the East Pilbara, is expected to mobilise to the Butcherbird mine site next month.
IMC will undertake civil earthworks including access roads, the tailings storage facility and preparation of the processing plant area. On completion of the pre-production civil works program, IMC will transition to mining.
Element 25 says development of the Butcherbird project remains on time and on budget and that it is fully funded to production start-up. First production from the new mining and processing operation – that has a first-stage development CAPEX of only $15 million – is slated for the March 2021 quarter.
Element 25 Managing Director, Justin Brown said: “The project development team continue to make excellent progress at Butcherbird as we fast track the commencement of stage one operations.”
Last month the Perth-based company entered into a take-or-pay offtake contract to supply all the manganese ore produced from Butcherbird – up to 365,000 tonnes per annum – for an initial five years to OM Materials, a subsidiary of ASX-listed and Singapore-based integrated manganese and silicon company OM Holdings.
According to the Butcherbird pre-feasibility study, or “PFS” released six months ago, operating cash flows are tipped to average approximately $32 million per annum over the first five years of manganese ore production.
Element 25 says it has always envisaged the currently advancing project development as a stage one or early-stage proposition. Down the track the company hopes to expand the capacity and pump out greater volumes of manganese concentrate at Butcherbird.
The company is also considering the possible development of downstream infrastructure designed to further process the concentrate into battery-grade manganese sulphate and electrolytic manganese metal.
To that end, Element 25 is currently finalising an updated PFS incorporating the viability of a potential expansion of manganese concentrate production.
Experienced resident manager, Sven Tegeler, has been appointed to oversee the construction and commissioning phases of the project before taking over in the mine management role at Butcherbird.
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By Matt Birney
