High purity manganese and battery tech specialist Euro Manganese [TSXV / ASX:EMN] has reported that it has sufficient funding for delivery of near-term project milestones including advancing permitting for its landmark Chvaletice Project, completing commissioning of the Demonstration Plant and its initial operation, and for general and administration expenses for the next 12 months.
Euro Manganese also reported that its offtake funnel remains full with 200,000 tonnes of Chvaletice HPMSM (over 100% of annual production capacity) now under discussion.
Euro Manganese new offtakers entering sales process
Parties are moving through the sales funnel and new offtakers have entered the process. Several larger potential customers are yet to provide an allocation of tonnage to the company; however, they have expressed an expectation to do so in the near future. Euro Manganese is targeting 80% of production capacity under offtake contract to support project finance.
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The company said additional funding will be required for execution of the EPCM services for the project, certain scheduled payments for land acquisitions, future operation of the Demonstration Plant, as well as construction of future infrastructure and facilities for the Chvaletice Project and to advance the company’s North American strategy, including the Bécancour Plant feasibility study.
Importantly, production of on-spec high-purity manganese sulphate monohydrate is due in the near term.
“Production of on-spec high-purity manganese metal from the Chvaletice Demonstration plant was a significant milestone,” said Dr Matthew James, CEO of Euro Manganese. “We remain focused on producing on-spec high-purity manganese sulphate from our onsite Demonstration Plant, which would further de-risk our process flowsheet and demonstrate our capacity to produce battery-grade manganese products at scale.”
Euro Manganese said it would be re-submitting a revised ESIA for Chvaletice, although there is no anticipated effect on timeline to FID. It is working to address the comments received related to noise abatement and anticipates the issuance of a positive decision on the revised Environmental Social Impact Assessment before the end of 2023.
Preparation of other key permits is progressing well, the company said. Documentation for the Land Planning Permit is substantially complete and will be finalised upon receipt of the conditions in the approved ESIA. The Land Planning Permit will be submitted on approval of the ESIA. The Construction Permit is a deliverable of the FEED phase of engineering and is expected to be submitted in mid-2024.
Strong preliminary economics from Bécancour plant
Scoping study highlights were also released for the company’s Bécancour Dissolution Plant. The Scoping Study delivered strong preliminary project economics, with a post-tax Net Present Value of C$190 million using an 8% discount rate, a post-tax Internal Rate of Return of 26%, and a payback period of approximately four years.
The economic analysis has a margin of error of -30%/+50% and was run on an unlevered and constant dollar basis with no inflation or government grants considered.
Euro Manganese reported cash and cash equivalents of approximately C$10.9 million as at end of fiscal Q3 (June 30, 2023); compared to $13.8 million at fiscal Q2 (March 31, 2023).
The reduction in the cash position is mainly attributable to expenses related to project advancement, including award of the EPCM contract; commissioning of the Demonstration Plant; certain land rental payments; amendments to the ESIA; and administrative expenses related to project financing efforts and the corporate office.
