Element 25 (ASX:E25) is running a $10 million share placement to fund expansion at the Butcherbird Manganese Project in Western Australia.
The company will issue 36.32 million shares at an issue price of $0.28 per share, representing a 13.4% discount to the 10-day volume weighted average price (VWAP) of $0.323 per share.
Petra Capital acted as the sole lead manager and bookrunner to this placement, which is expected to settle on 18 September.
Element 25 intends to use the proceeds raised to expand the project’s production capacity to 1.1 million tonnes per year.
Managing Director Justin Brown says the company is pleased with the support returned in the placement.
“Expanding Butcherbird is an important part of our strategy to produce high-purity manganese sulphate monohydrate, with our first facility planned for Louisiana, USA and a development strategy that is backed by General Motors, Stellantis and the US Department of Energy,” Brown says.
“Funds raised under the placement will allow key orders to be placed for long lead equipment items and will fund the acceleration of detailed engineering design activities to progress the project in line with the project plan.”
The placement comes not long after the company secured a $50 million senior debt facility from the Northern Australia Infrastructure Facility, which will accompany the expansion.
Element 25 intends to build the processing facility in Louisiana, US, after returning a January Feasibility Study predicted a capital cost of $64.8 million.
The facility holds a pre-tax net present value of $561 million and a 96% internal rate of return, which will return an average cashflow of $70.5 million per year for an 18-year mine life.
The company will continue to work with prospective investors ahead of the project expansion to secure the funding balance.
Write to Maddison Elliott at Mining.com.au
Images: Element 25
