Butcherbird Expansion Feasibility Study Shows $561M NPV and 96% IRR on $64.8M CAPEX

Resource Expansion and Project Economics

Element 25 Limited (ASX: E25) has delivered a landmark quarterly update that significantly advances its flagship Butcherbird Manganese Project in Western Australia. The company announced a 142% increase in Measured and Indicated Mineral Resources to 130 million tonnes at 10.23% manganese, underpinning a robust expansion plan. This resource growth is complemented by a 107% increase in Ore Reserves to 101.4 million tonnes, confirming a mine life exceeding 18 years at an annual production rate of 1.1 million tonnes of manganese concentrate.

The updated feasibility study (FS) for the Butcherbird expansion paints a compelling economic picture, with a pre-tax net present value (NPV8) of AU$561 million and an internal rate of return (IRR) of 96%, based on a modest capital expenditure of AU$64.8 million. The study highlights Butcherbird’s position as a low-cost manganese producer, with a C1 cash cost of US$2.86 per dry metric tonne unit (dmtu), placing it competitively on the global stage.

Regulatory Milestones and Operational Readiness

Element 25 has secured critical regulatory approvals for the Butcherbird Expansion Project, including the Mining Proposal and Mine Closure Plan, granted by the Western Australian Department of Energy, Mines, Industry Regulation and Safety. The only remaining major approval is the Works Approval for the expanded processing facility, which is expected imminently. This regulatory progress clears the path for construction to commence, with commissioning targeted within 14 months following the final investment decision and financing.

US Battery-Grade Manganese Refinery Funding Boost

In a significant development post-quarter, Element 25 announced it has been awarded a US$166 million (AU$268 million) grant from the U.S. Department of Energy (DoE) to support its high-purity manganese sulphate monohydrate (HPMSM) refinery project in Louisiana. This grant complements the US$115 million in funding already secured from automotive giants General Motors and Stellantis, bringing total committed project funding to approximately US$281 million.

The Louisiana facility aims to produce approximately 65,000 metric tonnes of battery-grade HPMSM annually, a critical raw material for electric vehicle (EV) batteries. This project not only reduces US dependence on Chinese manganese supply chains but also promises substantial local economic benefits, including the creation of 400 construction jobs and 144 permanent roles. Element 25’s proprietary refining technology boasts a carbon footprint approximately 67% lower than Chinese competitors, aligning with global decarbonisation trends.

Financial Position and Corporate Developments

Element 25 strengthened its balance sheet by raising AU$2.85 million through an equity placement with Acuity Capital at a 13% premium to the recent volume-weighted average price. The funds will support ongoing working capital needs as the company advances its dual-pronged growth strategy: expanding manganese concentrate production at Butcherbird and developing the US-based HPMSM refinery.

Operational cash flows remain under pressure due to ongoing development expenditures, with a net cash outflow from operating activities of AU$1.35 million for the quarter. However, the company’s cash position of AU$4.63 million at quarter-end, combined with committed project funding, provides a solid runway for near-term milestones.

Strategic Outlook

Element 25’s integrated mine-to-market approach positions it uniquely in the manganese sector, targeting both traditional manganese markets and the rapidly growing EV battery supply chain. The Butcherbird expansion’s low-cost profile and long mine life underpin a stable supply of manganese ore, while the Louisiana refinery project leverages strategic partnerships and government support to capture value further downstream.

As the company moves towards final investment decisions and construction phases, market participants will be watching closely for the granting of the Works Approval at Butcherbird and the progress of the HPMSM refinery build in Louisiana. These developments will be critical in validating Element 25’s vision of becoming a world-class, low-carbon battery materials manufacturer.