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Euro Manganese [TSX-V and ASX:EMN / OTCQX:EUMNF) has closed the CAD$8,499,500 strategic equity investment it has received from the European Bank for Reconstruction and Development. The investment was affected by way of a private placement of 17,800,000 common shares issued to EBRD at a price of CAD$0.4775 per share.

Euro Manganese is a battery materials company whose principal focus is advancing the development of the Chvaletice Manganese Project, in which it holds a 100% interest. The proposed project entails re-processing a significant manganese deposit hosted in mine tailings from a decommissioned mine, strategically located in the Czech Republic.

What is Euro Manganese setting out to do?

The goal of Euro Manganese is to become a leading, competitive and environmentally superior primary producer of ultra-high-purity manganese products in the heart of Europe, serving the lithium-ion battery industry, as well as other high-technology applications.

Upon the closing of the placement, EBRD holds approximately 4.4% of the Euro Manganese shares (on a non-diluted basis). The proceeds from the placement will increase the company’s flexibility in financing the Chvaletice Manganese Project in the Czech Republic, including the feasibility study, site preparation and operating costs for the demonstration plant, and environmental works including permitting and other activities related to the final Environmental and Social Impact Assessment.

Why is the EBRD deal so important?

As we commented when the news first broke of the EBRD deal in early January, 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 last month: “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 the EBRD, also pointed to the project’s value for improving “Europe’s security of battery raw material supply.”

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

Environmental review was also critical

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.

In connection with the placement, EIT InnoEnergy will be issued 534,000 Shares at a deemed value of CAD$0.4775 per Share, for total consideration of CAD$254,985, representing a finder’s fee equal to 3% of the gross proceeds of the placement.

In accordance with Canadian securities laws and the policies of the TSX Venture Exchange, the shares issued to EBRD in connection with the placement and the shares issued to EIT InnoEnergy, are subject to a four month and one day statutory hold period expiring on June 11, 2022.

Related

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

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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