Element 25 Ltd (ASX:E25) (FRA:QFP) and OM Holdings Ltd's (ASX:OMH) subsidiary OM Materials (S) Pte Ltd have agreed to an extension to the manganese ore offtake exclusivity period for its Butcherbird Manganese Project in Western Australia.
This extension is to allow sufficient time for the definitive documents to be finalised.
The exclusivity will be extended by 30 days and will now expire on January 10, 2021.
Key commercial terms have and continue to be agreed under a non-binding term sheet to sell 100% of the manganese ore produced - up to 365,000 tonnes per annum - from the first stage of the Butcherbird project development to OM Materials, under a take-or-pay offtake arrangement
In addition to the offtake deal, E25 and OM Materials are also negotiating the final terms of a $2 million convertible funding agreement, which will be part of the overall project financing.
World-class manganese resource
The Butcherbird project is a world-class manganese resource with current JORC resources in excess of 263 million tonnes of manganese ore.
E25 recently completed a pre-feasibility study with respect to developing the deposit to produce manganese concentrate for export to generate early cash flow with a modest capital requirement.
The outstanding economics and low capital hurdle of less than A$15 million will allow the company to develop the project in a relatively short timeframe.
OM Holdings has over 25-years history
OM Holdings Limited is an integrated manganese and silicon company, involved in the mining and trading of raw ores, as well as the smelting and marketing of processed ferroalloys.
With an established history of over 25 years in the industry, OMH captures value across the entire process chain through operations in Australia, China, Japan, Malaysia, Singapore and South Africa.