Manganese mine out of action due to landslide in Gabon

Bullish for any manganese producer such as South32, JMS but more so E25.

Butcherbird is still burning cash after the last update, but the news from Gabon could mean higher prices for Mn which is good given E25 is a higher cost producer.

https://news.metal.com/newscontent/102054764/mixed-stockpiling-in-manganese-industry-ahead-of-cny

Imported manganese ore: Downstream manganese alloy producers normally restock ahead of CNY holidays. SMM survey showed that other than several manganese alloy plants that suspended production for maintenance amid severe losses, most of the other manganese alloy factories will remain in production, ensuring the demand for manganese ore in January. Meanwhile, the landslide at one manganese mine in Gabon triggered market concerns over shipments in the near term. Domestic market participants will therefore raise their quotes. The prices of manganese ore are likely to rise in the short term.

E25 (the one I mentioned in the Current State forum post which rallied heavily) released a presentation on ASX without any update on progress of manganese production (stage 1) and instead touted the HPMSM project (High purity managanese sulphate monohyrdrate) and how relevant the project is in regards to the inflation reduction bill.

My guess is they are raising funds (possible CR??) for this and may explain the fall today.

Rather disappointing there are no updates on production or cost numbers for stage 1.

Recommencement of Operations and Record Daily Production

• Repair and modification works completed on schedule, plant operating normally.

• Processing Plant demonstrating improved production volumes in line with expectations.

• New record daily production of 1,209 tonnes of concentrate produced on 3 January 2022.

• Record average daily production of 934 tonnes since 23 December 2021.

• Additional optimisation opportunities identified for follow up.

Element 25 Limited (E25or Company) (ASX:E25) is pleased to advise that the processing plant at the Company’s Butcherbird Manganese Project (Project) is demonstrating significant performance improvements since the log washer repair and engineering modification works were completed on schedule in December 2021.The Works undertaken during December 2021 focussed on the repair of the shaft failure as announced and updated on 22 November and 13 December 2021 respectively and the implementation of a range of engineering improvements that had already been planned prior to the plant failure. Pleasingly, plant production volumes have shown significant improvements since re-commissioning of the plant,with a new daily production record of 1,209 tonnes being achieved on 3 January 2022, well above the target nameplate production of 1,000 tpd for the Stage 1 production plant. In parallel with the repair works, a range of modifications have been made to the plant to improve plant access for maintenance, manage material flow through the plant, reduce wear on key components, improve noise and dust control as well as adjusting the overall site layout to increase operational and maintenance scheduling flexibility and throughput.

Maybe made the wrong call selling (my sell price 1.45)

If they keep achieving above nameplate then maybe operations could go back to breakeven. Won't know until the next update.

No longer hold.

Just an update that I no longer hold E25 since November 2021. The last operations update with the negative cash flow as a result of freight costs being on the higher end unfortunately forced my hand.

For the record, the project was meant to achieve positive cashflow by some time this year after commissioning which would be used to fund stage 2. Looks like they didn't forecast freight and trucking to be so high caused by supply chain and shipping disruptions. Overall I still exited at a small profit despite adding around $2+ but fortunately got out before the share price really collapsed.

Update: if you draw a route on Google Map from where Butcherbird is approximately located to the port, you can see how far it is and why I sold.

For those that still hold, best of luck. While China holds the upper hand in supply of high purity mangainese, I believe E25 may struggle.

Investor Presentation

https://twitter.com/Element25Ltd/status/1372341595282968579

Just a comment that the latest presentation shows the discount rate to be 5% instead of 8% (that was in the original PFS)

Obviously this conveniently bumps the NPV by an extra $100m. See slide 7.

Even though rates are low, I am a bit disappointed by this lack of consistency. But I will continue to hold nonetheless.

Butcherbrid Development Update

Highlights

• Appointment of Mining Contractor.

• Appointment of Resident Manager and initiation of operations team recruitment.

• Camp construction underway.

• Key processing plant equipment in transit from vendors.

• Work programme for the development of the borefield commenced.

• Expansion case PFS nearing completion.

Element 25 is currently developing the Butcherbird Manganese Project to supply manganese concentrate utilising technologies and processes developed in partnership with the CSIRO.

As the flowsheet developed with the CSIRO is "first of a kind", this is viewed as high risk despite successful small-scale tests. Possible huge upside if E25 pulls this off. Even so the share price has rallied on the back of a revision of this positive update.

Holding a small position of E25 shares since July.