Canadian battery materials company Euro Manganese (TSX-V: EMN; Frankfurt: E06) has confirmed it has started the process of putting in place the financing it requires to develop its flagship high-purity manganese project in the Czech Republic. This will support the company in moving towards a final investment decision, which is expected in 2023.
To this end, Euro Manganese has brought on board an experienced financial advisor, Stifel Nicolaus Europe Ltd., a wholly-owned subsidiary of Stifel Financial Corp. (NYSE:SF), to lend its expertise in the mining and metals sector and assist with the structuring and securing of project financing for the company’s Chvaletice project. The appointment of Stifel will allow for dialogue with a number of potential financiers and their due diligence processes to commence.
Manganese is a brittle silvery metal which, when processed into a high-purity state, is used as a battery material in electric cars. With demand for electric vehicles expanding at a rapid rate, car makers can’t get enough of the various metals used in car batteries including manganese, lithium, cobalt and nickel.
The Chvaletice project is the only sizable manganese resource located within the European Union and is right at the doorstep of major European car manufacturers. It is within reach of Tesla’s gigafactory in Berlin.
Matthew James, Euro Manganese’s President and CEO is very enthusiastic about the appointment. “Stifel is a well-regarded capital solutions advisory firm with a successful track record of debt and equity raises. Euro Manganese stands to benefit from their significant experience in project financing and relationships with strategic partners in the European EV battery market,” he said.
Environmentally responsible production of manganese
An advantage of Euro Manganese’s high-purity manganese is that it is produced in an environmentally responsible fashion. The project is a unique waste-to-value recycling and remediation opportunity that involves reprocessing historic tailings, which is leftover waste material from a previously operational mine. The production process intends to use 100% renewable power, resulting in a low carbon footprint. The company has been backed by major EU institutions, including the European Bank of Reconstruction and Development (EBRD) and EIT InnoEnergy.
“Euro Manganese is uniquely positioned to capitalize on the growth in the European electric vehicle market. Having the only sizable manganese resource in Europe combined with the development of a processing plant to produce high-purity manganese products, they will have a fully-traceable and sought-after product for the EV industry. Moreover, as the Chvaletice project involves reprocessing and rehabilitating historic mine tailings, the environmental credentials of the project should be very compelling for financiers,” said Jan-Erik Back, Stifel’s Head of Capital Solutions Group.
The company is currently advancing work on a demonstration plant, which is designed to produce large-scale product samples and will allow potential customers to complete their supply chain qualification of Chvaletice’s high-purity manganese products. The shipments of the demonstration plant modules, which will be assembled at Chvaletice, are expected on site in July.
Plant to be operational in September
The process of assembly will take place during the summer, preparing the plant to start operating in September. Groundwork has already been done for the offtake of high-purity manganese products with five signed Memorandums of Understanding agreements. The company is advancing discussions with potential customers, including cathode, battery and automotive companies with the aim of putting in place offtake contracts by the end of this year.
Stifel’s broker-dealer affiliates provide securities brokerage, investment banking, trading, investment advisory, and related financial services to individual investors, professional money managers, businesses, and municipalities. Stifel Bank and Stifel Bank & Trust offer a full range of consumer and commercial lending solutions.
Listen: Podcast with Marco Romero, Euro Manganese
