PERTH (miningweekly.com) – A prefeasibility study (PFS) into the Butcherbird manganese project, in Western Australia, has identified a startup manganese concentrate export scenario as part of a staged development strategy.
ASX-listed Element 25 on Tuesday said that the base case assumed production of 312 000 t/y of medium-grade lump manganese concentrate, grading between 30% to 35% manganese, over a mine life of 42 years.
The manganese lump product will be trucked from the Butcherbird mine site to the Utah Point at Port Hedland, from where it will be exported.
The study estimated that a capital investment of A$14.5-million would be required to fund the project, along with A$9.2-million in working capital.
The project is expected to generate average annual operating cash flows of A$32.1-million between years one and five of production.
The PFS estimated a pay-back period of six months from the start of the operation, with the pre-tax net present value estimated at A$441-million and the internal rate of return at 255%.
The study was based on a maiden proved and probable ore reserve of 50.55-million tonnes, at 10.3% manganese containing an estimated 5.22-million tonnes of manganese, with the resource estimated at 263-million tonnes, grading 11.4% manganese.
“The opportunity for a low capital and operating cost, rapid startup will transform Element 25 into producer status much earlier than previously anticipated,” said MD Justin Brown.
“The robust cashflows will be transformational in growing the company and generating long-term shareholder value.”
First production from Butcherbird has been targeted for early 2021.
Element 25 on Tuesday said that the company was in discussions with a number of potential funders, with a number of funding options being investigated including debt financing, traditional bank resource project financing, offtake funding, project and corporate level equity investment and equipment finance providers.