I'm expecting it to fly up some sort of multi-bag from Friday's...

I'm expecting it to fly up some sort of multi-bag from Friday's close. I'm not sure of the tax situation on the grant but the starting point is that E25 has 219.9m shares on issue. E25 were trading at 21.5c for a MC of $47.3m. December 2023 net assets were $64.8m.

From the Quarterly cash flow statements of Mar24 and Jun24 E25 had -$3.0m in operating payments and -$7.3m in investing cash flows, -$0.2m in investing cash flows and +$0.5m in exchange rate effects across Jan24 to Jun24 taking June cash to $11.3m. Some of those operating payments will relate to Dec23 accounts payable and accounts receivable so pending any June 2024 write-down in PP&E at Butcherbird, net assets remain close to A$60m shown in the Dec23 half year report.

The MC at $47.3m is modestly below net assets saying that E25 hasn't created value from the exploration and development activities undertaken, which is a fair assessment of historical mining profitability at Butcherbird.

E25's single largest asset is now the debt and equity funding commitments towards the HPMSM plant with the USA government grant of US$166m (A$243m) and the Stallantis / General Motors debt funding commitments. A project that based on the share price was considered very unlikely to progress would appear to have now flipped into the probable to proceed category. Its also in the probable to proceed without a completely massive equity issue category. Existing shareholders are may well still be the shareholders to benefit from a HPMSM plant. If you were to simply say that the US government grant was worth 80% of its face value ($194m) and add that to the existing MC of $47.3m you get a new MC of $241.7m which is still against 219.9m shares or $1.10/share. This is arguably a conservative view because the US government will have done more DD in the grant approval than any retail or institutional investor is likely to ever do on any small MC stock. They passed this DD test with the grant approval.

The second largest asset after these Louisiana funding comments is likely to be E25's patented IP re HPMSM methods. This grant from the US Government may reflect this if E25 has managed to patent one of the primary alternative pathways to HPMSM. If they have, it would explain why they are securing interest from General Motors, Stellantis and more recently Nissan (Chemical) who are all Massive multi-billion MC companies.

If Butcherbird can be restarted with appropriate capital equipment to deliver a lower price point it can be making ten's of millions on normal Manganese prices. This possibility was being significantly discounted as the capital cost of the expansion shifted past E25's MC.

While lithium sentiment is in the doldrum's, E25's Lake Johnston tenement isn't being given much value but it is adjacent to multiple companies that are exploring down there. One of them is undertaking infill drilling and has created the expectation they will be reporting a significant JORC resource off ~20Mt. E25 has grabbed the same geology area. If (when) lithium sentiment improves, E25's tenement could be worth $10's of millions. Rio Tinto is already sniffing around the area, has several tenement that have less special geology and one JV arrangement.

As per below, there is no massive future dilution from options that may well come back to being in the money.



From the Dec23 AR, HPMSM development assets were $12.2m and most of the $7.3m of investing cash flow over the last 6 months will have been re the HPMSM project.


And this was what the balance sheet looked like at Dec 2023.