Euro Manganese Inc. (TSX-V and ASX: EMN; OTCQX: EUMNF; Frankfurt:
E06) (the "Company" or "EMN") is pleased to announce key
developments during the second fiscal quarter and to date. The
Company has now filed its March 31, 2023 Second Fiscal Quarter
Financial Statements and Management’s Discussion and Analysis. Euro
Manganese reports to a fiscal year-end of September 30.
Key Developments During and Subsequent
to the Quarter
-
Production of 99.9% pure HPEMM from Chvaletice
Demonstration Plant significantly de-risks the process
flow sheet. External laboratory testing confirmed that the first
sample of high-purity electrolytic manganese metal ("HPEMM") has
met the Demonstration Plant target specifications. High-purity
manganese sulphate monohydrate ("HPMSM") is currently under
production in the final crystallization module and samples will be
sent for testing in the coming weeks. After confirmation from
external labs of product meeting specifications, expected to be the
end of June, deliveries of HPEMM and HPMSM samples are expected to
commence. Customer deliveries of the Company’s Demonstration Plant
products, however, are not expected to be required for completion
of offtake contracts.
-
Demonstration Plant contractual guarantee testing is
underway. Contract guarantee testing is expected to be
complete by the end of May 2023. Thereafter, evaluation of the
results from external labs will confirm performance parameters of
the Plant.
- Offtake
Term Sheet announced with Verkor. The Term Sheet defines
minimum tonnages and a pricing mechanism based on an index-adjusted
western benchmark price for HPMSM that also correlates to the
carbon footprint of Chvaletice HPMSM. Offtake tonnages are
equivalent to a percentage of Chvaletice’s annual HPMSM production
on a take or pay basis, for an initial tenure of eight years with
potential for renewal.
- More
than 150,000 tonnes of Chvaletice HPMSM (100% of annual production
capacity) under discussion as part of offtake tender
process. Discussions are progressing well with
potential customers across the battery supply chain, including
cathode active material ("CAM") and the precursor product ("pCAM")
producers, battery makers and automobile manufacturers. Multiple
parties are at various stages in the offtake process. Approximately
75% of offtake capacity (more than 115,000 tpa) is moving through
the offtake process (term sheet negotiations with one term sheet
signed), with approximately 30,000 tpa mid-process (MoU or
conversations significantly progressed) and approximately 20,000
tpa under earlier stages of discussion. Several larger potential
customers are yet to provide an allocation of tonnage to the
Company; however, they have expressed an expectation to do so in
the near future. The Company is targeting 80% of production
capacity under offtake contract to support project finance.
-
Strategic partner conversations initiated. As part
of the Company’s strategy for raising financing for the Chvaletice
Project, BMO Capital Markets ("BMO") has been engaged to assist the
Company in securing a strategic partner to invest at the project
level in combination with an offtake agreement. BMO is currently
initiating discussions with key automotive OEMs.
-
Selection of EPCM contractor underway for development of
the Chvaletice processing plant. The Company evaluated
five bids from tier-1 Engineering, Procurement and Construction
Management ("EPCM") firms and is now finalizing selection of the
preferred EPCM firm. On appointment, the EPCM contractor will focus
on advancing basic engineering design, procurement of long lead
process equipment and construction permitting.
-
Battery-grade manganese identified as a strategic raw
material under the proposed European Critical Raw Materials Act
("CRMA"). Potential for the Chvaletice Project to be
recognized as a Strategic Project, which would qualify it for
priority permitting and support for funding access and facilitation
of offtake agreements. Additionally, in order to reduce the
European Union’s reliance on a single supply country for certain
raw materials, the CRMA would require that by 2030 no more than 65%
of any strategic raw materials come from a single third country.
Europe currently relies on imports of high-purity manganese to meet
90% of its demand. The Company’s Chvaletice Project expects to
deliver almost 50,000 t of high-purity manganese metal per year
when in full production, meeting approximately 25% of European
demand and helping the EU reduce its trade reliance on this
strategic raw material.
- US
Department of Treasury clarification on eligibility for EV tax
subsidies under the Inflationary Reduction Act ("IRA") positive for
Euro Manganese. The Company’s high-purity manganese
products are well positioned to benefit from the March 2023
clarification that EV batteries containing critical raw materials
that are extracted, processed or recycled within a foreign entity
of concern render an EV ineligible for IRA tax subsidies.
- Hosted
site tour for Canadian Ambassador to the Czech Republic and various
municipal officials. Canadian Ambassador to the Czech
Republic, Ayesha Rekhi, visited the Chvaletice Project site in
March alongside other Embassy officials, mayors from both
Chvaletice and Trnavka villages, and representatives from the
Pardubice district and CzechInvest. The group saw the local project
office, the Demonstration Plant and the historic tailings area. The
Czech and Canadian governments continue to be supportive of the
Chvaletice Project.
- Scoping
Study completed for the Bécancour dissolution plant. The
scoping study evaluated the development of an HPEMM dissolution
plant to produce an HPMSM powder and/or a high-purity manganese
sulphate solution. Based on the positive outcome of the scoping
study results, the Company is preparing a request for proposals for
a feasibility study for the Bécancour dissolution plant.
Financial Position
- Cash and
cash equivalents of approximately C$13.8 million as at end of
fiscal Q2 (March 31, 2023); compared to $18.3 million at
fiscal Q1 (December 31, 2022). The reduction in cash position is
mainly attributable to: expenses related to project advancement,
including for commissioning of the Demonstration Plant; certain
milestone deposits for land at the tailings area; submission of the
final Environmental and Social Impact Assessment; and
administrative expenses related to project financing efforts and
the corporate office. Additional expenses were also incurred for
the evaluation of a potential dissolution plant at the Port of
Bécancour in Québec.
-
Sufficient funding for delivery of near-term project
milestones including completion of permitting for
construction of the Chvaletice Project, commissioning of the
Demonstration Plant and its operation on a batch basis. Additional
funding will be required for execution of the EPCM services for the
Project, future payments for land acquisitions, as well as future
construction of infrastructure and facilities for the Project and
to advance the Company's North American strategy.
Dr. Matthew James, President & CEO of Euro Manganese,
commented:
“We delivered on a number of fronts during the
second fiscal quarter and to date. Production of high-purity
manganese metal from the Chvaletice Demonstration plant was a
significant milestone and de-risks our process flowsheet. Equally,
the offtake term sheet with Verkor established a great precedent as
we advance offtake discussions with potential customers.
Recent EU and US regulation related to onshoring
supply chains have triggered a positive response in dynamics with
offtakers. Potential customers are reaching out to us proactively
and are motivated to advance through the offtake process. Moreover,
there is a growing acknowledgement of price premiums for western
extracted and processed products, including our high-purity
manganese. This has resulted in more than 100% of our annual
Chvaletice production being under discussion as part of our offtake
tender process. That is significant as we are targeting 80% of
production capacity under contract to support project finance. Euro
Manganese is very well positioned to offer a local, secure source
of supply for the EV market.”
Fiscal Q2 Conference Call
Details
Euro Manganese will host two separate conference
calls to serve stakeholders in their respective time zones. Content
of both calls will be the same. Replays and transcripts of both
calls will be available on Euro Manganese’s website:
www.mn25.ca
CALL #1 – For North American and UK/European
Audiences |
|
North America |
UK/Europe |
Date |
Monday, May 15, 2023 |
Monday, May 15, 2023 |
Time |
8:30am PDT | 11:30am EDT |
4:30pm BST | 5:30pm CEST |
Registration: |
https://us06web.zoom.us/webinar/register/WN_Rk1SptqxTbeHX4SL2B82vw |
CALL #2 – For Australian and UK/European
Audiences |
|
Australia |
UK/Europe |
Date |
Tuesday, May 16, 2023 |
Tuesday, May 16, 2023 |
Time |
4:00pm AEST | 2:00pm AWST |
7:00am BST | 8:00am CEST |
Registration: |
https://us06web.zoom.us/webinar/register/WN_CR3cIpCXRXux9MGU4bzPyw |
About Euro Manganese
Euro Manganese is a battery materials company
focused on becoming a leading producer of high-purity manganese for
the electric vehicle industry. The Company is advancing development
of the Chvaletice Manganese Project in the Czech Republic and
exploring an early-stage opportunity to produce battery-grade
manganese products in Bécancour, Québec.
The Chvaletice Project is a unique
waste-to-value recycling and remediation opportunity involving
reprocessing old tailings from a decommissioned mine. It is also
the only sizable resource of manganese in the European Union,
strategically positioning the Company to provide battery supply
chains with critical raw materials to support the global shift to a
circular, low-carbon economy.
Euro Manganese is dual-listed on the TSXV and
the ASX, and is also traded on the OTCQX.
Qualified Person(s) Statement
The technical information in this news release
was prepared under the supervision of Ms. Andrea Zaradic, P. Eng.,
a Qualified Person under National Instrument 43-101 Standards of
Disclosure for Mineral Projects ("NI 43-101"). Ms. Zaradic
has reviewed and approved the information in this news release for
which she is responsible and has consented to the inclusion of the
matters in this news release based on the information in the form
and context in which it appears.
Authorized for release by the CEO of Euro
Manganese Inc.
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) or the ASX accepts responsibility for the
adequacy or accuracy of this release.
Inquiries
Dr. Matthew JamesPresident & CEO+44 (0)747
229 6688
Louise BurgessSenior Director, Investor
Relations & Communications+1 (604) 312-7546lburgess@mn25.ca
Company Address: #709 -700 West Pender St.,
Vancouver, British Columbia, Canada, V6C
1G8Website: www.mn25.ca
Forward-Looking Statements
Certain statements in this news release
constitute “forward-looking statements” or “forward-looking
information” within the meaning of applicable securities laws. Such
statements and information involve known and unknown risks,
uncertainties and other factors that may cause the actual results,
performance or achievements of the Company, its Chvaletice Project,
its North American growth strategy, or industry results, to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements or information. Such statements can be identified by the
use of words such as “may”, “would”, “could”, “will”, “intend”,
“expect”, “believe”, “plan”, “anticipate”, “estimate”, “scheduled”,
“forecast”, “predict” and other similar terminology, or state that
certain actions, events or results “may”, “could”, “would”, “might”
or “will” be taken, occur or be
achieved.
Such forward-looking information or statements
include, but are not limited to, statements regarding the Company’s
intentions regarding the development of the Chvaletice Project in
the Czech Republic, anticipated timelines for commissioning of the
Demonstration Plant and the sustained on-spec HPEMM and HPMSM
production and sample availability, expected demand for
Demonstration Plant samples, its ability to enter into a long term
off-take agreement with Verkor, its ability to enter into term
sheets and long term off-take agreements with other customers,
anticipated amount of product the Company will be able to sell, its
ability to secure a strategic partner to invest at the project
level in combination with an offtake agreement, anticipated
timelines for EPCM contract award, statements regarding the
Chvaletice Project’s potential recognition as a Strategic Project
under the CRMA and any associated benefits and funding support
resulting therefrom, statements regarding any potential benefits
from the IRA’s clarification that EV battery raw materials sourced
from foreign entities of concern would render an EV ineligible for
IRA tax subsidies, statements regarding the Company’s North
American growth strategy, statements regarding the sufficiency of
the Company’s current cash resources to complete its near-term
project milestones, and the availability of additional funding to
carry out the Company’s longer term project
milestones.
Readers are cautioned not to place undue
reliance on forward-looking information or statements.
Forward-looking statements are subject to a number of risks and
uncertainties that may cause the actual results of the Company to
differ materially from those discussed in the forward-looking
statements and, even if such actual results are realized or
substantially realized, there can be no assurance that they will
have the expected consequences to, or effects on, the Company.
Factors that could cause actual results or
events to differ materially from current expectations include,
among other things: the ability to develop adequate processing
capacity; the availability and reliability of equipment,
facilities, and suppliers necessary to complete development; the
cost of consumables and extraction and processing equipment; risks
and uncertainties related to the ability to obtain, amend, or
maintain necessary licenses, or permits, risks related to
acquisition of surface rights; risks and uncertainties related to
expected production rates; timing and amount of production and
total costs of production; the potential for unknown or unexpected
events to cause contractual conditions to not be satisfied; the
failure of parties to contracts with the Company to perform as
agreed; risks and uncertainties related to the accuracy of mineral
resource and reserve estimates, the price of HPEMM and HPMSM, power
supply sources and price, and diminishing quantities or grades of
mineral resources and reserves; changes in project parameters as
plans continue to be refined; risks related to global epidemics or
pandemics and other health crises; availability and productivity of
skilled labour; risks and uncertainties related to interruptions in
production; unforeseen technological and engineering problems; the
adequacy of infrastructure; risks related to project working
conditions, accidents or labour disputes; social unrest or war; the
possibility that future results will not be consistent with the
Company's expectations; risks relating to variations in the mineral
content and grade within resources from that predicted; variations
in rates of recovery and extraction; developments in EV battery
markets and chemistries; and risks related to fluctuations in
currency exchange rates, changes in laws or regulations; and
regulation by various governmental agencies. For a further
discussion of risks relevant to the Company, see "Risk Factors" in
the Company's annual information form for the year ended September
30, 2022, available on the Company's SEDAR profile at
www.sedar.com.
All forward-looking statements are made based on
the Company's current beliefs as well as various assumptions made
by the Company and information currently available to the Company.
Generally, these assumptions include, among others: the presence of
and continuity of manganese at the Chvaletice Project at estimated
grades; the ability of the Company to obtain all necessary land
access rights; the ability of the Company obtain all required
environmental and other permits; the availability of personnel,
machinery, and equipment at estimated prices, in good order, and
within estimated delivery times; currency exchange rates; manganese
sales prices and exchange rates assumed; growth in the manganese
market; appropriate discount rates applied to the cash flows in
economic analyses; tax rates and royalty rates applicable to the
proposed operations; the availability of acceptable financing for
the Chvaletice Project and for continued operations; anticipated
extraction losses and dilution; success in realizing proposed
operations in the Czech Republic and for the Company’s North
American growth strategy; and demand for the Company’s
products.
Although the forward-looking statements
contained in this news release are based upon what management of
the Company believes are reasonable assumptions, the Company cannot
assure investors that actual results will be consistent with these
forward-looking statements. These forward-looking statements are
made as of the date of this news release and are expressly
qualified in their entirety by this cautionary statement. Subject
to applicable securities laws, the Company does not assume any
obligation to update or revise the forward-looking statements
contained herein to reflect events or circumstances occurring after
the date of this news release.
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