The study concluded there are "compelling economics" for a plant capable of taking Butcherbird ore and turning it into high purity manganese sulphate monohydrate for use in lithium-ion batteries over a 20 year period.

 

With a post-tax net present value of up to US$1.1 billion, a base case internal rate of return of 47%, assuming forecast HPMSM prices of US$1950 per tonne and a fertiliser grade manganese sulphide price of $900/t compared with expected costs of $552/t, the company has decided to launch straight into a definitive feasibility study.

 

The plant likely won't be built in Australia, but probably somewhere in South East Asia such as Malaysia or South Korea, although options to co-locate at Butcherbird, for coastal WA, or industrial parks in Europe and the US, are being considered. 

 

The scoping study assumes start-up costs of US$150 million, including contingencies and working capital, for the 66,650tpa stage one, which will produce 50,000t of HPMSM and 16,000t fertiliser product.

 

The two expansion stages are expected to be funded from cashflow, rising over two subsequent stages to 150,000tpa HPMSM and 50,000tpa fertiliser.

 

The plant that will use a proprietary leaching and sulphate purification solution that has been developed in-house over the past few years and is said to support 'zero carbon' production with lower reagent and energy use; less, non-toxic wastes produced; all from a faster, more efficient process with claimed recoveries of at least 85%.

 

At full capacity, the three trains are expected to generate $205 million in annual cashflow, giving a payback period of 19 months.

 

The DFS will examine process optimisation and alternative ports to Utah Point at Port Hedland.

 

E25 believes it will be in a position to finalise debt and equity funding, and offtake agreements to allow the stage one train to begin construction from in 2023 and commissioned in 2024.

 

Trains two and three could commence construction in 2025 and 2026.

 

E25 commenced its DSO operations last year, but has always had a multi-stage plan for Butcherbird, rising to 1Mtpa, switching in high purity manganese with a feasibility study due this year, and ultimately bringing in the HPMSM option, which would likely consume 60% of the Butcherbird ore.

 

E25 shares, which have traded between A96.5c and $2.90 over the past year, were last traded at $1.41, valuing it at $216 million.

 

The stock was sub-20c in early 2020.