- Element 25 (E25) and OM Holdings’ wholly-owned subsidiary, OM Materials, have entered a memorandum of understanding (MoU)
- The non-binding agreement will see Element 25 supply manganese concentrate from its Butcherbird Manganese Project in WA
- Butcherbird is considered a world-class manganese resource and has a low capital requirement of around $14.5 million
- Over the next few months, the companies will negotiate an offtake agreement as part of the development of the Butcherbird Project
- Company shares are up five per cent and trading for 42 cents each
Element 25 (E25) and OM Holdings’ wholly-owned subsidiary, OM Materials, have entered a memorandum of understanding (MoU).
The non-binding agreement will see Element 25 supply manganese concentrate products from its Butcherbird Manganese Project in Western Australia.
Element 25 considers this agreement a milestone after engaging with a number of discussions over the last few weeks since the company released its pre-feasibility study in May.
The Butcherbird Manganese Project is considered a world-class manganese resource, with a current JORC resource of more than 263 million tonnes of manganese ore.
The project also has a low capital requirement of around $14.5 million, as well as $9.2 million in working capital to see it through to production. First ore is expected in early 2021.
“Discussions with OMH and others have highlighted the demand for high quality, reliable supply of manganese from Australia,” E25 Managing Director Justin Brown said.
Over the next few months, the companies will negotiate an offtake agreement as part of the development of the Butcherbird Project.
Final terms are yet to be discussed however the agreement provides a framework for negotiations regarding a binding offtake of between 50 and 100 per cent of the concentrate produced from Butcherbird, pricing, an initial term of up to five years, and optimising the logistics solution for the project.
Company shares are up five per cent and trading for 42 cents each at 1:46 pm AEST.