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Vancouver-based Euro Manganese Inc. (TSX-V and ASX: EMN; OTCQX: EUMNF; Frankfurt: E06) has signed a strategic investment deal worth CAD$8.5m with the European Bank of Reconstruction and Development (EBRD) that will support the continued development of the Chvaletice Manganese Project in the Czech Republic.

The deal comes in the form of a private placement that gives EBRD approximately 4.5% of the EMN’s common shares (on a non-diluted basis), with the option of further participation in future financings.

What is Euro Manganese?

EMN is a battery materials company whose principal focus is the development of the Chvaletice Manganese Project, in which it holds a 100% interest. The proposed Project involves re-processing a significant manganese deposit in tailings from a decommissioned mine in the Czech Republic. EMN says its goal is to become a “leading, competitive and environmentally superior primary producer of ultra-high-purity manganese products” in the heart of Europe, serving the burgeoning lithium-ion battery industry, as well as other high-technology applications.

Listen: Podcast with Marco Romero, CEO/Founder of Euro Manganese

Strategic deal

The agreement has a distinct strategic flavour, as it signals validation of the Chvaletice project in the EU at the highest institutional levels. The project is set to be the EU’s only primary producer of high-purity manganese, an essential raw material for the manufacture of EV batteries, at a time when the EU has announced its plan to have all new cars to be emissions-free by 2035.

The newly appointed chairman and CEO Matthew James said: “The EBRD investment is an affirmation that EMN’s Chvaletice Manganese Project is an important part of establishing a strong, sustainable European electric vehicle battery supply chain to support Europe’s accelerating transition to e-mobility.”

Eric Rasmussen, Director of Natural Resources at EBRD, said: “As a new shareholder, the EBRD will help Euro Manganese develop a local source of high purity manganese, which will improve Europe’s security of battery raw material supply.”

The EBRD is a multi-lateral bank owned by the European Union, the European Investment Bank and 71 countries, including the Czech Republic.

The deal also means that the project meets the standards for modern, responsible mining set by the EBRD’s progressive Environmental and Social Policy. The EBRD’s due diligence for the deal included a technical and environmental review of the the project conducted by an independent, international natural resources consultancy. EMN has undertaken to maintain compliance with the EBRD’s environmental, social, economic inclusion and equal opportunity standards.

What to watch out for

Shares in EMN have lost more than half their value over the past 52-week period, slipping from a high of C$0.85 in January 2021 to a low of C$0.38 in mid-December.

Since then, however, the shares have picked up and are now trading at C$0.50.

With the prestigious EBRD now on board, the way should be open to further investments from other financial institutions, but the key consideration here is that EMN has secured EU-level backing, which looks set to underpin its growth for years to come.

Well worth considering for ESG and other investors wanting exposure to the EV/battery space.

Related

Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

James Norris

James Norris

James is a highly experienced writer and editor, gained from more than 20 years in the financial services industry, in particular wealth management and asset management.

He initially worked as a financial journalist for a number of leading media brands, including the FT Group, Financial News, Euromoney and Incisive Media, covering most aspects of the asset management industry. More recently, James switched to work as an in-house content specialist for fund management and wealth management groups, including JP Morgan Asset Management, Quilter Cheviot Investment Management, AXA Investment Managers and Invesco Perpetual.

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