ASX-listed Element 25 continues to pick off mine development milestones as the company fast-tracks its way towards first manganese concentrate production at its incredibly low proposed CAPEX Butcherbird operation in the Pilbara. The company has set itself a rapid project development schedule, which it says is tracking on time and on budget, with first manganese concentrate production expected in the first quarter of calendar 2021.
The Perth-based company has now lodged several key licence and permit applications to the relevant State Government departments in order to get the approvals processes moving. These include environmental approval applications, as well as water, capital works, project management and mine access road applications.
The licence and permit applications come after the Element 25 placed orders for the long-lead-time plant and equipment items that are expected to be delivered at the end of the year.
It has already received approval for the proposed design of the access road where it intersects the Great Northern Highway.
Element 25’s recently released pre-feasibility study shows an extraordinarily low CAPEX for the planned development of only $14.5 million, plus working capital of $9.3 million.
According to the PFS, Butcherbird is forecast to produce about 357,000 tonnes of concentrate a year and spit out average operating cash flows of about $32.1 million per annum for the first five years.
The Butcherbird mine life has been estimated at a prodigious 42 years, which has been predicated on measured and indicated resources totalling 263 million tonnes of manganese ore.
Proved and probable reserves published in the PFS were 50.6 million tonnes of manganese ore grading 10.3 per cent for an estimated 4.27 million tonnes of recovered manganese.
Using an FOB Port Hedland manganese price of US$4.33 per dry metric tonne, the $65 million market-capped Element 25 is estimating a before-tax net present value on Butcherbird of A$283 million.
The company’s strategy of fast-tracking to production is aimed at pumping out early cash flows to enable it to strengthen its balance sheet and evaluate the potential for a staged ramping up to a higher-purity manganese production operation.
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By Matt Birney
