Element 25 Ltd (ASX:E25) has extended key days in its funding and offtake agreement with car giant Stellantis.
The companies signed the offtake and project financing agreement on January 25 this year, for the supply of battery-grade high-purity, manganese sulphate monohydrate (HPMSM) from E25’s proposed US-based processing facility.
The agreement combines take or pay offtake commitments for 45Kt of HPMSM from the facility over five years with US$30 million in two tranches of project funding towards the facility capital cost. Tranche 1 of the funding comprises a US$15 million equity investment in E25.
E25 managing director Justin Brown sat down with Proactive’s Elisha Newell at the time to discuss the pivotal agreement with the global carmaker, calling it “a fantastic endorsement from one of the world’s largest automakers”.
Today, E25 and Stellantis which is behind such brands as Chrysler, Maseratti, Citroen, Fiat, RAM, Opel and Dodge among others, agreed to extend the cut off date for conditions precedent to the Agreement (CPs) which were originally set to expire on April 30, 2023.
Understanding the conditions
While several of the conditions have soi far been met, some need extra time to be worked out.
The CPs for the overall transaction between E25 and Stellantis include:
- Stellantis completing a technical due diligence process to its satisfaction. [NOW COMPLETED]
- A decision by the E25 board to proceed with the project based on the feasibility study (FS). [NOW COMPLETED]
- E25 completing a successful HPMSM FS for a USA-based HPMSM facility to Stellantis’ reasonable satisfaction.
- CP for the Share Subscription Agreement and Offtake Agreement – by April 30 2023.
- E25 securing a minimum of US$100 million project financing.
The original expiry date would not have provided the allocated 20 days for this review and has now been extended to May 15, 2023.
The expiry dates for all CPs listed above is now June 30, 2023, which the companies believe will provide sufficient time for the FS review and for the satisfaction of the remaining CPs to allow for the first tranche of $15 million project funding to be completed.