Consideration for the sale is $1 million along with a 1% net smelter royalty (NSR) for Element 25 on all future production from the Holleton project.
The sale is part of Element 25’s strategy to focus on the development potential of the high purity manganese business at the Butcherbird project in the Southern Pilbara region.
This strategy includes rationalising the company’s project portfolio.
Holleton exploration licence application covers around 115 square kilometres of the Holleton Greenstone Belt, about 400 kilometres east of Perth.
The consideration of $1 million is payable in cash, shares or any combination at EMO’s election.
Element 25 said it was very pleased with the outcome of the transaction.
The cash and/or share component would provide important working capital, the company said.
“The royalty ensures shareholders will benefit from future exploration success as EMO and RMS roll out their exploration programs.”
The transaction is binding but remains subject to a number of conditions which must be satisfied or waived by both parties within 60 days of executing the agreement.
These include the transfer of existing permits and agreements to EMO.
Element 25 recently changed its name from Montezuma Mining as part of its transition from a diversified explorer to the developer of a world-class manganese project.
The company has commenced all key work streams for a pre-feasibility study at its 100%-owned Butcherbird project.
The PFS is building on a 2018 scoping study that concluded Butcherbird has potential to be an economically viable producer of high-purity manganese sulphate for lithium-ion battery markets.
Simulus Engineering has been contracted to undertake a 600-kilogram bulk leach test program to further optimise process and produce samples for offtake discussions.
A key adviser has been appointed to provide consulting support in finding the optimal power strategy.
Discussions with prospective advisors are also progressing regarding project financing.