Aspiring manganese producer Element 25 (ASX: E25) has delivered a pre-feasibility study for its flagship Butcherbird project in Western Australia’s Pilbara region based on the export and sale of manganese concentrate from a long-life open pit operation.
The study focuses on mining at the Yanneri Ridge deposit, where the mineralisation has been determined to be of “most economic value” and amenable to simple physical beneficiation.
Ore will be processed at a purpose-built electrolytic manganese metal (EMM) facility to yield 312,000 tonnes per annum of medium-grade lump product grading up to 35% manganese.
The product will be trucked to nearby Port Hedland and sold to manganese consumers around the world, specifically lithium-ion battery cathode and specialty steel manufacturers.
A relatively low capital requirement of $14.5 million plus $9.2 million in working funds will be required to realise an average annual operating cashflow of $32.1 million over the first five years and a payback period of six months.
Start-up mining and processing is expected to commence at a throughput rate of 1.2 million tonnes per annum with total mine life extending past 40 years.
Element 25 managing director Justin Brown said a potentially rapid start-up will be a game changer for the company.
“The opportunity for a low capital, rapid start-up operation will move [us] to producer status much earlier than previously anticipated,” he said.
“Robust cashflows will be transformational in growing the company and generating long-term shareholder value,” Mr Brown added.
Yanneri Ridge is one of eight known manganese deposits contained within the Butcherbird project, which spans more than 600sq km of the southern Pilbara.
It is a shallow, outcropping, supergene manganese resource and has been shown to be most economic to mine by open pit methods over multiple stages utilising conventional equipment.
Preliminary geotechnical work has indicated the majority of the mineralisation could be mined as free-dig material without the use of drill or blast techniques.
Dozer ripping will be employed to loosen ore and improve productivity rates.
Yanneri Ridge has a proven and probable ore reserve of 50.55Mt grading 10.3% for 5.22Mt manganese (or 4.28Mt recoverable manganese).
Butcherbird holds a current JORC resource in excess of 260Mt and has been held by Element 25 since 2009.
In December, an exploration program at Yanneri mined approximately 40t of ore over seven pits, which were excavated and bulk sampled in nominal 1t lots to a maximum depth of 7m below the surface caprock.
The pits provided material representative of the first four years of mining for subsequent test work and for large-scale hydrometallurgical pilot testing at the planned EMM facility.
The sampling program also enhanced the geological interpretation and confirmed the suitability of mining methods.
Earlier this year, a separate program focused on physical beneficiation processes to optimise the grade and recovery curve for manganese concentrate.
At mid-morning, shares in Element 25 were trading 40% at $0.280.