Firebird Metals (ASX:FRB) has confirmed its receipt of a safety permit in China “critical” to the company’s ability to build and operate a battery grade manganese sulphate plant.
The market hasn’t responded one way or the other with shares flat heading into the second hour of trade, despite manganese being part of the recent broad-based metals rally. Along with gold, silver, and copper, metals like manganese are also up 27.35% YoY.
Or perhaps the market is just waiting to see if it can get all 3 permits it needs. The stock expects approval on two other permits – an environmental impact report and an energy consumption report – within the June quarter.
Firebird Metals’ Tuesday announcement offers a glimpse into the Chinese industrial regulatory burden on companies as much as it offers a progress update. The enviro report is now in the post-review stage after going before an initial expert panel, while the Jinshi state government is handling the energy report.
Firebird’s plant will be located in that same jurisdiction part of the larger Hunan province.
All in all, the company expects to hit a positive Final Investment Decision (FID) in H2 of 2024. Upon a positive decision, the company stated on Tuesday it will then be “ready to immediately commence construction.”
The project is backed by a feasibility study published earlier this month, a document that estimated Firebird’s total spend to get the project up and running at US$83.5M (A$126.15M).
There was, however, a catch in the company’s Tuesday announcement – which could go towards helping the lack of market reaction (despite it being a flattish day.)
“Notwithstanding the Finance Update as set out in the ASX announcement dated 14/5/24, investors should note that there is no certainty that the Company will be able to raise the amount of funding to develop the Plant when needed,” it wrote.
“It is also possible that such funding may only be available on terms that may be dilutive to or otherwise affect the value of Company’s existing shares.”
(In other words: we’re not ruling out a capital raise.)
Still, management pointed to support coming from China’s regulatory and private entities.
“We are moving at a rapid pace on-the-ground in China and that is due to the hard work of our leading manganese team and the strong level of in-country support we have and continue to receive,” Firebird MD Peter Allen said.
“We expect to make a Final Investment Decision in the second half of 2024, immediately commence construction activities and work extremely hard towards commencing operations in late 2025.”
FRB last traded at 20cps.