ASX-listed manganese hopeful, Element 25, has hopped aboard the fast train to production, committing to the purchase of long-lead-time plant and equipment items for its proposed low CAPEX Butcherbird manganese project in the Pilbara.
The Perth-based company is on a rapid-fire project development schedule, which it says is advancing on time and budget, and the long lead times for the processing plant components it has ordered for Butcherbird will not upset the applecart. They are scheduled to be delivered at the end of the calendar year.
Element 25’s release of the Butcherbird pre-feasibility study three months ago saw the company’s share price double overnight when it forecast the planned production of a manganese concentrate for export required a paltry CAPEX of just $14.5 million, plus working capital of $9.3 million.
The pre-feasibility study indicated an impressive average annual operating cash flow of about $32.1 million for the first five years of Butcherbird’s mine life, which has been estimated at an extraordinary 42 years based on measured and indicated resources totalling 263 million tonnes of manganese ore.
Assuming the projected 42-year life of mine, the net present value and internal rate of return – both before tax – for Butcherbird have been calculated in the study at an enviable $283 million and 223 per cent, respectively.
Element 25 Managing Director, Justin Brown said: “We have an aggressive delivery timeline for the Butcherbird project which has us in production in the first quarter of calendar 2021. It is pleasing to see these key milestones being met in keeping with that timeline.”
The company’s strategy of fast-tracking to production is designed to generate quick cash flows to allow it to beef up its balance sheet and assess the economics of a gradual staged ramping up to a higher-purity manganese production operation.
First-stage and second-stage processing plant and equipment items ordered are a jaw crusher and a dry screen, the latter for the removal of fine-grained clay material.
Other key items include ore sorters, a log washer that aids efficient ore sorting by removing any remaining clays and breaking down a portion of the non-manganiferous shale material, plus vibrating screens, also for optimising ore sorting, and a motor control centre.
The Butcherbird project straddles the Great Northern Highway and the Goldfields Gas Pipeline, which, according to Element 25, offer possible turnkey logistics and energy solutions.
Is your ASX listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Matt Birney
