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Shares in manganese explorer Element 25 (ASX:E25) have experienced modest gains of +2% in morning trades as the company looks at restarting its Butcherbird project.
Butcherbird is a manganese play, prices for which are up over +30% YoY following damage to a key port at Groote Eyelandt earlier this year.
Overlapping supply issues have been the key catalyst driving prices upward.
BHP-tied miner South 32 (ASX:S32) shares dropped in March this year when a vessel at a port, reportedly untethered in the appropriate way, slammed into port infrastructure, crippling it until Q3 of 2025.
The Groote Eyelandt project was a significant enough source of manganese to the world market that metals traders began to pay attention. Damage was so bad to port infrastructure that South 32 even downgraded guidance days later.
Elsewhere, South Africa is also a large producer of manganese ore, but political risks in that country – as well as rolling blackouts – continue to stagger production.
Fortuitously, these omens come as good news for Element 25. The company’s now considering taking its Butcherbird project off the backburner, and back to the fore.
But whether the company can generate short-term cash from sales of existing lower-grade ore stockpiles remains the subject of a thorough C-Suite assessment.
At this time, the company is largely just looking at selling stockpiles, as opposed to fresh extraction of in-situ ore.
In between the lines, this is a strategy that can only work because of manganese prices at the port of Tianjin in North China – meaning a sudden reversal in prices could threaten the prospect.
Still, some investor and trader interest is clear in the +2% increase in shares this morning.
“A potential restart of Butcherbird’s processing operations at these increased manganese ore prices on a de-risked basis may be an ideal opportunity to monetise existing stockpiles,” Element 25 MD Justin Brown said.
“E25 looks forward to updating the market further as these investigations are completed.”
E25 last traded at 27cps.
