Element 25 Boosts Finance for Butcherbird Project from Rare Earth Sales

Recently, element 25, a manganese developer listed on the ASX, picked up a handy $1 million from the $3 million sales of the Cummins Range rare earth deposit in WA's East Kimberley region which the company says will be ploughed into its developing $15 million Butcherbird manganese mine in the Pilbara.

The Perth-based company received an initial payment of US$1 million from RareX Ltd 12 months ago as part of the Cummins Range divestiture transaction. The Perth-based company received an initial $1 million payment 12 months ago from RareX Ltd as part of the Cummins Range divestment deal. Element 25 has now secured the second tranche comprising $500,000 in cash and the issue of 7,462,687 fully paid shares in RareX at a deemed issue price of 6.7 cents per share. RareX shares are currently trading at 16 cents representing a useful paper profit for the budding manganese miner.

Element 25 is currently rapidly entering the start-up phase of manganese concentrate production in the project in the March quarter of 2021. Its recently released pre-feasibility study, or "PFS" on Butcherbird envisaged an eye-popping CAPEX of a mere $14.5 million for the planned development of a new operation producing concentrate for export, plus working capital of $9.3 million.

PFS data shows that Butcherbird is expected to mine about 357,000 tons of concentrate each year, with an operating cash flow of approximately US$32.1 million per year, and an initial mine life of 5 years. Commercial exploitation of the deposit is aided by the very simple outcropping geology that paves the way for a low strip ratio, and free-dig, low-cost mining.

Element 25's smaller-scale first-stage mine development is designed to generate quick cash flows with only low capital outlays needed. The plan is to establish financial flexibility from the rare earth sales that will allow the company to investigate and contribute funding towards the potential staged ramping up to a larger, higher-purity manganese production operation.

The newly announced Butcherbird's proven and probable reserves are 50.55 million tons of manganese ore, with a manganese content of 10.3%, and the estimated recovered manganese is 4.27 million tons. According to Element 25, The project straddles the Great Northern Highway and the Goldfields Gas Pipeline, which offer turnkey logistics and energy solutions.

Boosts manganese project from rare earth sales, the company also stated that if the economics prove favorable, Butcherbird's life of mine could blow out to more than four decades based on its prodigious total measured and indicated resources of 263 million tonnes of manganese ore grading 10 per cent manganese.

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