What's Happening?
Element 25, listed on the Australian Securities Exchange (ASX:E25), is conducting a $10 million share placement to fund the expansion of its Butcherbird Manganese Project in Western Australia. The company plans to issue 36.32 million shares at $0.28 per share, which is a 13.4% discount to the 10-day volume weighted average price of $0.323 per share. Petra Capital is acting as the sole lead manager and bookrunner for this placement, expected to settle on September 18. The funds will be used to increase the project's production capacity to 1.1 million tonnes per year. Managing Director Justin Brown expressed satisfaction with the support received for the placement, emphasizing its role in the company's strategy to produce high-purity manganese sulphate monohydrate, with the first facility planned for Louisiana, USA.
Why It's Important?
The expansion of the Butcherbird Manganese Project is significant for Element 25 as it aligns with their strategic goals to produce high-purity manganese sulphate monohydrate, a key component in electric vehicle batteries. This development is backed by major stakeholders such as General Motors, Stellantis, and the US Department of Energy, highlighting its potential impact on the automotive industry and the broader push towards sustainable energy solutions. The project promises substantial economic benefits, with a pre-tax net present value of $561 million and an internal rate of return of 96%, projecting an average cash flow of $70.5 million per year over an 18-year mine life.
What's Next?
Element 25 plans to continue engaging with prospective investors to secure additional funding necessary for the project expansion. The company is focused on placing key orders for long lead equipment items and accelerating detailed engineering design activities to progress the project according to plan. The expansion is supported by a $50 million senior debt facility from the Northern Australia Infrastructure Facility, which will aid in the development of the processing facility in Louisiana, USA.
