Euro Manganese (ASX:EMN) has amended its facility with Orion Resource Partners Group’s Orion OMRF, converting US$23.5 million ($33.78 million) in outstanding debt to a royalty structure on the Chvaletice Manganese Project.
Under the revised agreement, the outstanding loan and accrued interest will automatically convert into a royalty once a fundraising condition is met by a date acceptable to Orion. The conversion will fully discharge the company’s repayment obligation for the outstanding loan amount.
According to Euro Manganese, the revised structure removes time-based milestones contained in previous versions of the agreement, providing greater flexibility to advance the project alongside financing, permitting, and market conditions.
Following conversion, the royalty will range from 2.29–2.46% of project revenues, calculated quarterly using a sliding scale linked to achieved prices for the project’s high-purity manganese products. The original Orion funding package announced in November 2023 was structured as US$100 million split into two US$50 million components.
CEO Martina Blahova says the agreement represents a constructive outcome for the company.
“By converting the existing facility into a royalty, we are simplifying our capital structure, improving financing flexibility and positioning the company to advance the Chvaletice Manganese Project through its next stage of development,” Blahova says.
Chairman Rick Anthon says the revised agreement reflects the company’s relationship with Orion.
“The strong relationship and latest agreement mean EMN is well positioned heading into the next phase of development. We now have a clearer, simpler capital structure and greater financial flexibility to move forward,” Anthon says.
The Chvaletice Manganese Project in the Czech Republic aims to reprocess historic mine tailings to produce high-purity electrolytic manganese metal and high-purity manganese sulphate monohydrate.
Orion retains offtake rights of between 20% and 22.5% of the project’s high-purity manganese production for 10 years from first delivery. According to Euro Manganese, the offtake terms will match commercial terms achieved by the company to meet bankability requirements.
Write to France Pinzon at Mining.com.au
Images: Euro Manganese
