Element 25 Ltd (ASX:E25, OTCQX:ELMTF) is set to immediately begin detailed design, planning and procurement to expand manganese ore production at its Butcherbird Mine in Western Australia.
Expansion of the processing facility at Butcherbird aligns with the company’s commissioning target date for its planned battery-grade high-purity manganese sulphate monohydrate (HPMSM) project to be built in Louisiana, USA — a project in partnership with General Motors (NYSE:GM) LLC and Stellantis NV.
Element 25 is developing battery-grade HPMSM products for traditional and new energy markets, aiming to become an industry-leading, world-class, low-carbon battery materials manufacturer.
"Ideal time" to implement expansion plans
The Butcherbird expansion design, planning and procurement works are in line with the expansion feasibility study released earlier this month.
Over the coming three months, activities will focus on detailed engineering and design, project financing and finalising the required permitting to support the commencement of construction in line with the project schedule.
E25 managing director Justin Brown said: “Expanding the scale of operations at Butcherbird beyond our Stage 1 pilot plant has always been a part of our growth plans and given the outstanding metrics reported in the updated feasibility study released earlier this month, this is the ideal time to implement those plans to ensure we can increase production ahead of our Louisiana HPMSM facility commencing operation.”
Positioning for long-term
In parallel with expansion activities, Element 25 will suspend Butcherbird’s current production operations, aiming to reduce operational cash outflows and re-focus resources and available cash on implementing the expansion plan outlined in the feasibility study. This decision is supported by the recent weakness in manganese prices.
“Given the current manganese price environment coupled with high interest rates and inflation, we will suspend current operations at Butcherbird to conserve resources and use available cash to achieve this goal.
"We understand this is a difficult decision for our employees, contractors and suppliers and not one we have made lightly, but it is intended to help E25 better position itself to reach its longer-term goals,” said Brown.
The current schedule anticipates operations to recommence in approximately 11 months, once project financing has been secured, when Element 25 will increase annual production to 1.1 million tonnes of manganese oxide concentrate.
The company intends to provide further detail and an updated schedule once it completes front-end engineering and design (FEED), which has now commenced.