Still a Buy?, page-173

Hi Feral,

1/
I don't think the PFS was ever completed.

In May 2018, Element 25 completed a scoping study on Butcherbird for the production of Electrolytic Manganese Metals (EMM) for the steel industry as well as High Purity Manganese Sulphate (HPMSM) for lithium ion batteries.

But I think from memory the ASX blocked them from announcing the results.
(the ASX said it had to be a PFS despite a few other companies being allowed to release scoping study results around the same time)

All E25 could say was that the results were 'positive'.
I suspect a high NPV, a good IRR, a very long life, but a big +$200M or $300M CAPEX which at the time would have not been achievable for a company trading at 20c and a $16M market cap.

2/
Whilst advancing this PFS, I believe the company started to revue a lower CAPEX, quicker path to positive cashflow business, in the form of the direct shipping ore (DSO) operation we are currently seeing roll out.
Which will be so incredibly profitable we should see share price at $5 and dividends forever (as I've pointed out previously)

3/
But the battery business is what will see us at $10 per share in the years to come. (IMO)
So back to that.

In February 2019 we saw the joint E25/CSIRO announcement of 99.95% HPM

Then the following significant events happened:

The Butcherbird resource was upgraded in size
ARENA (the Australian Renewable Energy Agency) contributed $500k to advance the project
Drilling continued
Native Title agreement signed
Cooperative Research Centres Project (CRC-P) contributed $1.4M for the pilot plant test programme
E25 appointed BurnVoir Corporate to assist with NAIF discussions
E25 entered into due diligence phase with NAIF for funding
Advisian appointed to advise on power solution for the project
Roskill engaged to provide advice on future demand/pricing structure for EMM & HPM
2019 AGM presentation mentions off take discussions are advanced with various Korean, Japanese, USA and EU groups looking to secure Non-Chinese supply

4/
Since then and in the subsequent PFS released we know the following:
No Flora and Fauna issues
Environmental permits granted
Access agreement with the pastoralist reached
Water available
Highway runs through the project
Gas pipeline runs through the project
West Australian asset

5/
Regarding costs and revenues.
CAPEX would have to be large
Power cost will be enormous so they would have to get that down to compete with subsidised China production.

EMM sells for approx US$2,000 a tonne but its a very approx figure and guessing a bit
I think Euro Manganese (EMN) have used a bullish US$4,000 in their studies.
They also include a graph of current demand for battery Mn at 50,000 tpa but increasing to 400,000 tpa in 2030

Anyway, this will all take time to unravel but I'm sure someone big will get involved as the numbers are too large to ignore.