Australian (ASX) Stock Market Forum

E25 - Element 25

Punters liked the news of record daily production since the resumption. Price has drifted lower on lower volume. I like the low volume pull-back after two strong bullish days. Price could easily go back to the old high >2.50 if production continues smoothly as it's resumed.

Two strong days since the All Clear/ Full Steam Ahead. and as high as $1.71 today, now $1.62
,,,,,,,,,,,, followed by 3 weak months. Was as low as 80c mid-March and now about $1.00

... from the latest blurb:
Manganese is the cheapest, most abundant of the NMC cathode materials (Ni,Mn,C).
• Nickel and cobalt have supply constraints, manganese does not.
• For cobalt, there are serious ethical concerns around production methods.
• Manganese is perfectly placed to provide the material needed to satisfy the worlds hunger to electrify.
• Battery makers have manganese rich cathode designs in their roadmaps post 2025
Two strong days since the All Clear/ Full Steam Ahead. and as high as $1.71 today, now $1.62
and now 60c, though this is up from a late-June low of 42.5c.

A shipment comprising 35,002 tonnes of Butcherbird manganese concentrate departed Port Hedland aboard the MV Aquamarine SW on 24 May 2022. The contract price received was higher than for previous shipments due to the buoyant prevailing manganese markets, which helped to offset the higher than forecast diesel and shipping costs which remain above long-term trends due to ongoing geopolitical and COVID related issues around the world.
Manganese ore markets have remained strong through Q2 2022 with 44% index material remaining well above US$7 / dmtu CIF Tianjin. Feedback on the handling properties of E25 concentrate ore remains positive from logistics providers to consumers. The marketing team will continue to look for opportunities to place additional conventional and non-conventional material into the current market whilst strong markets conditions prevail.

Producing manganese concentrate for export to generate early cashflow with a modest capital requirement in this Stage 1 of the development plan. There is potential for a 2x to 3x expansion to Stage 1 within 12 months of initial commissioning, and the Company expects to expedite the expansion of the Project in 2H FY2022. Stage 3 is the development of a conversion facility to convert the concentrate material into HPMSM for electric vehicle EV batteries.

End of March Q, had cash of $21 million.
still creeping up ... 67c.

A further announcement concerning the planned production of high purity battery grade manganese sulphate monohydrate (HPMSM) from manganese oxide concentrates currently produced at the Company’s 100% owned Butcherbird Project.

As recently reported in Malaysian news publication The Star, Borneo Post and others, E25 are currently in discussions with the Malaysian Investment Development Authority and the Sarawak State Government in relation to building the first planned conversion plant in Sarawak to produce HPMSM for lithium-ion batteries used by electric vehicles.

HPMSM is the highest purity “battery grade” manganese chemical used in lithium-ion batteries and demand for this specialty material is expected to grow rapidly in coming years in line with the growth in production of EV’s
still creeping up ..
The creep continues (need I go on?)

-E25 made a non-Market Sensitive announcement, regarding the panned production of high purity battery grade manganese sulphate monohydrate (HPMSM) from manganese oxide concentrates currently produced at the Company’s 100% owned Butcherbird Project. As well as tossing around the Sarawak option, there is a nudge towards USA

• Inflation Reduction Act (IRA) in the USA has generated strong interest for a USA based facility. Advanced discussions with multiple potential offtake and financing partners support potential for a USA based facility.
• Inflation Reduction Act provides strong incentives for USA and FTA country supply chains for USA EVs
• Australian sourced HPMSM meets the requirements of the IRA for vehicle manufacturers to attract USA federal subsidies and is creating strong interest from potential customers with a USA EV or EV battery market presence.
• Element 25 currently running the USA location in parallel with Malaysia in response to strong interest from offtake/finance partners.
• Executive site visit to the USA confirms Louisiana as a favourable location for a USA based HPMSM plant.

• Engagement with Louisiana Economic Development, Baton Rouge Area Chamber and local industry confirms local support for a Louisiana site, which is also supported by discussions with potential offtake/finance partners.

and here it is ... Trading Halt for a proposed capital raising to fund initial works on the Company’s High Purity Manganese project, capital expenditure to optimise performance for the Butcherbird Project, and general working capital.

E25 received firm commitments for a A$35 million placement at A$1.12 per share.

The placement was heavily oversubscribed with E25 management and the Joint Lead Managers agreeing to increase the raise to $35million (minimum $30M).
Stellantis is the world’s fourth largest carmaker and owns European brands such as Fiat and Peugeot, and has said it wants to sell more than 5 million battery electric cars worldwide by 2030.

On Monday, Element announced the deal will see Stellantis tipping in investment – about $US30m ($44m) in two tranches – to part-fund its processing facility development.

The first tranche of $US15m will see Stellantis buy 21 million shares in Element, subject to shareholders approving the transaction.

Element will supply up to 10,000 tonnes per annum high purity manganese sulphate monohydrate for five years with provisions to increase volumes.

E25 is still working its way through feasibility studies on its US manufacturing plant, and has said it is likely to outline the expected costs and returns on the plant to the market by the end of March. The mining and manufacturing hopeful has said it hopes to be in production by 2026.

Manganese is primarily used in steel production, but manganese heavy batteries are also jostling for position among other options for electric cars, particularly given the likely constraints on nickel and cobalt production later this decade.

Batteries with manganese cathodes do not currently deliver the same levels of performance as nickel and cobalt batteries, but manganese is far more abundant and easily accessible than either of the two critical minerals and is more often used in the Chinese domestic car making industry than by US or European brands.

Major battery makers are also looking to more extensive use of manganese in lithium iron phosphate batteries, usually used in cheaper cars, in an effort to improve their energy density and performance.

China dominates the global supply of HPMSM, but both Volkswagen and Tesla have also been investigating the potential for more extensive use of manganese cathode batteries later this decade – particularly given ethical issues around the production of cobalt in the Democratic Republic of Congo, the world’s major supplier of the commodity.

The dearth of non-Chinese sources of HPMSM has been one of the major barriers to the more extensive use of the product in electric vehicle batteries, and more so since the Biden administration’s Inflation Reduction Act, which offers generous rebates and subsidies for electric vehicles – but only on condition that the bulk of the material sourced is manufactured and refined in either the US or jurisdictions such as Australia which have free trade agreements with the US.

A scoping study on the plant was released by E25 in 2022 focused on its establishment in southeast Asia, and suggested a capital cost of about $US150m.

But E25 has since switched its focus to the US, citing demand for local production from US car companies, with the company pushing back the delivery of its feasibility study until March 2023 as it searches a potential location for the chemicals plant.


... and

General Motors will loan $US85 million ($128 million) to Element 25 as the world’s biggest car makers race to forge ties with Australian producers of battery materials.

The deal, unveiled on Monday, paves the way for Element 25 to build a new facility in the US state of Louisiana to process battery-grade manganese sulfate – a key component in lithium-ion battery cathodes – mined in WA
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