Element 25 Ltd (ASX:E25, OTCQX:ELMTF) has completed a comprehensive feasibility study (FS) to expand manganese production at its Butcherbird Project in Western Australia with positive outcomes providing a strong case to proceed.
Enhanced production
The expansion promises enhanced production capabilities, economic benefits and alignment with evolving market demands, particularly in the EV sector, while aligning with the company’s commitment to sustainable and responsible mining practices.
E25's study, which concluded this month, evaluates the feasibility of increasing manganese concentrate production to 1.1 million tonnes per annum to leverage economies of scale.
The expansion strategy involves enhanced open-cut mining methods, a modified comminution circuit and the integration of a dense media separation (DMS) back-end solution to optimise grade and recoveries.
Projected annual cash flow from the expanded operation is A$57.3 million, with low capital requirements of A$49.8 million.
Impressive IRR
The expansion project promises a rapid capital payback period of 1.2 years, an impressive internal rate of return (IRR) of 113% and a net present value (NPV8) of AU$228 million.
This will establish Butcherbird as a low-cost manganese operator, with costs estimated at US$2.76 per dry metric tonne unit, significantly lower than the manganese market's low price points.
The FS uses measured and indicated resources within the mine plan, aiming to undertake infill drilling to target an additional 20-25 years of mine reserves. It highlights the robust economics and strong potential economic returns of the expansion.
Louisiana plant on track
Butcherbird's proven and probable ore reserve remains unchanged at 49.2 million tonnes at 10.2% manganese, containing 5.0 million tonnes of manganese (4.1 million tonnes of recoverable manganese).
The expansion dovetails with the company's strategy to develop a high-purity manganese sulphate (HPMSM) plant in Louisiana, supporting offtake partners such as General Motors (NYSE:GM) LLC and Stellantis NV for EV battery manufacturing.
The feasibility study outlines the project's geology, resource estimate, mining, processing, logistics, infrastructure, manganese market analysis and environmental considerations.
It addresses potential business risks and provides detailed economic analysis, including material assumptions, operating costs, revenue projections and sensitivity analysis.