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03/07/23
13:19
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Originally posted by Garant:
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Everything that is written here is correct. And I understand the anger. The high millions of losses with the simple ore operation are grueling and what was promised in advance was not kept. The board of E25 has taken countermeasures, albeit too slowly and too late, by filling the management team with 2 new people at the end of January 2023 - it became the board through the appointment of OM Manganese managing director Fanie van Jaarsveld and the experienced chemical engineer Sam Lancuba to ensure, among other things, the optimization and expansion of the mining and processing facility around Butcherbird. Better results around the business with the current ore operation (higher throughput and nominal value output, expansion & optimization of the plant to be able to produce more cost-effectively) will take time and improvements will only result from September.However, the component of the ore price for manganese (44%) for E25 is also of crucial importance and the price, on which E25 now has no influence at all, has been rather low for a long time continuously, apart from a few highs, and does not lead to that the production of manganese ore will be in positive territory and will also have resulted in high losses in the past quarter with only one delivery to OMH. However, the future is often traded on disallowed and that lies in the production of manganese sulfate for electric vehicles.The Vice President of General Motors himself stressed that the planned E25 plant in the USA is of great importance as it will be the first plant in the USA toMakes battery grade manganese sulphate cheaper than the Chinese too! The first production is already planned for 2025 and according to the DFS from April 2023 a annual EBITA of $178 million . This is where the current opportunity lies: Nobody believes in it and that is why the share is currently available on disallowed for AUD 0.59. Buy if you hate the stock and sell if you love the stock! Short-term positive reports which could influence the course upwards are: - Final agreement with Stellantis (probably as soon as Monday) - Provision of US subsidies for the planned plant in the United States - consider that the market would then have to evaluate a fully funded battery manganese producer - Further purchase agreements with a vehicle manufacturer (Ford, Tesla or VW?) I'm also disappointed with the performance of the stock over the last 2 years, that's quite clear. But I currently see greater opportunities here in the long term and hope that the short-term risks (price for manganese ore, shipping costs Baltic Exchange Dry Index, optimization of the plant on Butcherbird) will be temporarily under control. E25 may shortly be a fully funded manganese battery producer with a total of only 190 Mio issued shares with a very low Mkt Cap of only A$115M and a raw material for the battery industry where supply will meet demand in will exceed a few years. Decide for yourself according to your own risk profile which decision you will make regarding E25 on disallowed!
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It might be your view today that this is a battery material play with a sideline in ore production, but that is not how this was positioned pre-production. At that stage the effect of the company's representations was a money-in-the-bank ore operation with huge but uncertain potential through the high purity operation. I still struggle to get past JB's dismissal of the concerns about the ore sorter... That is probably why so many of the longer term shareholders are so angry about it - we didn't buy into a coin flip boom or bust battery supply business, we bought a solid simple cash positive commodities business which had an added bonus of high purity upside. A few years later and the ore operation is all but a write-off. Anyway, bottom line it is now clear that this is as much of a YOLO battery stock as a boring commodities play, and each shareholder has to decide if they want to be involved in that sort of business.