VANCOUVER, Jan. 30, 2019 -
Euro Manganese Inc. (TSX-V/ASX: EMN) (the "Company" or "EMN"), today announced the results of the Preliminary Economic Assessment (“PEA”) for the development of Western Europe’s largest manganese deposit owned by Mangan Chvaletice s.r.o. (“Mangan”), a 100% owned subsidiary of EMN in the Czech Republic, the Chvaletice Manganese Project (“Chvaletice Manganese Project”, “CMP”, or “Project”), and provided further information for the Company’s development plans for 2019. All economic values are in US dollars unless indicated otherwise.
HIGHLIGHTS:
- PEA based on the recycling of a 27 million tonnes Measured and Indicated tailings resource (98.3% Measured) with a combined grade averaging 7.33% Mn, without the requirement of any hard rock mining, crushing or milling.
- 25-year project operating life producing 1.19 million tonnes of high-purity electrolytic manganese metal (“HPEMM”), two-thirds of which is expected to be converted into high-purity manganese sulphate monohydrate powder (“HPMSM”).
- Saleable product includes 404,100 tonnes of HPEMM and 2.35 million tonnes of HPMSM, focusing principally on Europe's rapidly emerging electric vehicle battery industry.
- Flexibility to supply either HPEMM or HPMSM, to suit customer preference.
- Pre-tax NPV of $782 million and after tax NPV of $593 million, using a 10% real discount rate.
- $404 million in pre-production capital, $24.8 million in sustaining capital, and $31 million in working capital, with an ungeared, pre-tax 25.2% IRR with a 4.5-year payback, and a post-tax 22.6% IRR with a 4.9-year payback.
- Project economics are based on projected average HPEMM (containing 99.9% Mn) price of $4,617/tonne and HPMSM (containing 32% Mn) price of $2,666/tonne over the project life.
- Targeting production of ultra-high-purity electrolytic manganese metal with specifications exceeding 99.9% Mn and ultra-high-purity manganese sulphate monohydrate with a minimum manganese content of 32.34%, which exceed typical industry standards.
- Exceptionally green project credentials. Project designed to meet or exceed all Czech and European safety, health and environmental standards, to remediate the Chvaletice tailings and arrest ongoing pollution related to unlined historical tailings piles.
- Access to excellent transportation, energy and community infrastructure.
- Proposed process plant site to be located in an industrially-zoned brownfields site, where a historical process plant generated the Chvaletice tailings.
- Sophisticated, stable and business-friendly European Union jurisdiction that is highly supportive of new and, especially, green investments.
- Robust project economic potential and rapidly growing market demand for high-purity manganese products support a wide range of potential financing alternatives.
- Opportunities exist to enhance returns through process optimization initiatives and various investment incentives that may be available through the Czech Republic and European Union.
- Next steps: Build and commission a Demonstration Plant in 2019 to produce multi-tonne, High-Purity Manganese product samples for customer testing and qualification, in conjunction with ongoing studies leading to completion of a feasibility study and submission of permit applications that will require further environmental investigations.
Marco Romero, President and CEO of EMN, commented:
"The PEA demonstrates the compelling potential of the Chvaletice Manganese Project. Euro Manganese is in a unique position in the battery industry, with its 100% holding of Western Europe’s most significant and strategically-located manganese deposit. What makes this project even more significant for an automotive industry focused on making our world greener, and for other consumers striving to secure sustainably produced raw materials, is that these products would be produced by recycling waste.”
Dr. Roman Shklanka, Chairman of EMN, added:
“The advent of electric vehicle manufacturing is transforming the entire global automobile industry. Revolutionary changes are taking place before our eyes and these have created unprecedented opportunities for an entirely new battery raw materials supply chain. Manganese is emerging as a key component in the dominant formulations of lithium-ion batteries, which are expected to drive strong demand for highly-refined manganese products well into the coming decades. A great deal of high-purity manganese materials production capacity needs to be brought on stream to meet the requirements of electric vehicle battery makers alone. Our plan is to be there for them, as a reliable supplier of environmentally-superior, high-purity manganese products. Our strategic location in the Czech Republic, central to a major emerging cluster of electric vehicle plants and a related ecosystem of chemical, cell and battery producers, our 25-year Project operating life, and our focus on the green production of high-purity manganese products made from the remediation of an old environmentally-impacted site, has attracted the attention of lithium-ion battery, battery precursor and cathode makers around the world.”
Mr. Romero continued, “Our Project team is now focused on further defining and refining our plans to advance the Project through front-end engineering and optimization work, and on the efficient progression of Project permitting. Planning, process engineering design and metallurgical test work are ongoing, ahead of the upcoming feasibility study, which we target completing by late 2019. Our plan for this year includes building and operating a demonstration plant capable of producing multi-tonne, high-purity manganese product samples for customer testing and qualification. Our 2019 plans also include intensifying community, stakeholder and regulatory consultation, and the filing of Project Permit Application.”
The PEA is based on a Measured and Indicated Mineral Resource Estimate, as detailed in the NI 43-101 and Technical Report prepared by Tetra Tech on January 28, 2019, a copy of which is filed on SEDAR and can be found on the Company’s website. The JORC Technical Report is expected to be lodged with the Australian Securities Exchange (“ASX”) within the next week. None of these Mineral Resources have been converted to Mineral Reserves. The PEA is considered preliminary in nature and includes estimated costs that are subject to an approximate margin of error of plus or minus 35%. Accordingly, there is no certainty that the PEA will be realized. Mineral Resources that are not Mineral Reserves do not by definition have demonstrated economic viability.
This PEA was compiled and project-managed by Tetra Tech Canada Inc. (“Tetra Tech”), Vancouver, with major input from CINF Engineering Ltd (“CINF”) (comprehensive process design, plant engineering, equipment selection and testing), Changsha Research Institute for Mining and Metallurgy (“CRIMM”) (metallurgical testwork, process design, product development and pilot plant testing), Bilfinger Tebodin Czech Republic (“Tebodin”) (Czech and European cost estimation, localization and environmental services), GET s.r.o. (“GET”) (geology and sampling, environmental and tailings extraction planning) and Sudop Ltd (railway infrastructure design study). An updated NI 43-101 Technical Report on the Chvaletice Manganese Project including results of the PEA will be filed within 45 days on SEDAR and made available on the Company’s website.
Project Design Approach and Benefits to Local Residents
- The CMP process plant is being designed to reliably and cost-effectively produce HPEMM and HPMSM products that meet or exceed all known customer specifications, including those for low-cobalt NMC cathode formulations, while complying with the stringent Czech Republic and European Union health, safety and environmental standards. In setting the life of the Project at 25 years with stable production levels, the goals of providing a long-term stable product supply for our customers, market stability and economic benefits for local communities and the citizens of the Czech Republic, were balanced against the generation of acceptable rates of return for the long-term investment that are required by EMN to develop the Project.
- The Project is designed to produce high-purity manganese products, anticipating customer specifications for the emerging specifications for low-nickel battery formulations, produced with the cleanest technology available, assuring customers product quality, verifiable provenance and n small environmental footprint.
- The Project would result in the environmental remediation of a polluted site, where metals and other compounds currently leach into the groundwater. As extraction, reprocessing and proper disposal of the Chvaletice tailings is carried out, the site will be progressively rehabilitated to be in compliance with Czech and European environmental requirements.
- Modern, conventional and commercially-proven technologies that are employed in a variety of industries were incorporated in the various components of the CMP process flowsheet.
- The Company has extensively engaged and plans to continue meaningful consultation with local residents, communities, organizations and regulatory agencies, soliciting active local participation and input in the Project’s evaluation and planning process.
- Since the inception of the CMP, the Company has sought-out, trained and helped to develop numerous talented Czech professionals. EMN expects that the project would employ Czech residents during construction and operations. The Project would be expected to employ approximately 400 people during operations.
- During its construction period and its 25-year life, total expenditures within the Czech Republic are estimated at $2.70 billion (CZK 62.0 billion), which would include corporate and payroll taxes and royalties payable within the Czech Republic of approximately $1.07 billion (CZK 23.8 billion).
PEA Summary and Economic Analysis
The following summarizes the material assumptions used in, and the results of, the PEA, assuming a targeted start of production in the second half of 2022:
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