A couple more weeks of circa nameplate production should provide...

A couple more weeks of circa nameplate production should provide management confidence that the current equipment, processing methods and ore structure can reliably produce nameplate. This was most likely the main road-block in pressing ahead with expansion to 3.9Mt of ore generating 1Mt of cira 33% grade Mn Ore. The big economies of scale come from being 3 times large but a number of the administrative functions remaining at a similar cost.

While past experience shows a little bit of slack needs to be added to the published timeline, E25 have repeated the expectation of expansion in 2H Financial Year 2022 (ie Jan-June). This timeline hasn't (touch-wood yet) slipped.

Given the timelines for getting stage 1 started, Oct22-Dec22 and subsequent quarters could be at 3,000t/day. The Dec 2020 estimated undiscounted cashflow was A$78.8m/yr when this expansion was operational. The incremental capital cost to increase to this, $18m plus a $2.3m contingency.

Its also worth remembering that the 15 year mine life after this expansion was using a 54mt resource. The inferred resource is 263mt meaning the mine life may be nearer 67years at this production level (and 200 years currently). With expansion capital costs having a payback period of under one year using the PFS financials, further expansion beyond 3.9Mt/yr would appear a distinct possibility.