Euro Manganese shares jump on US$100M financing with Orion

Euro Manganese (TSXV: EMN; ASX: EMN) has signed a US$100-million financing agreement with private equity firm Orion Resource Partners to advance its Chvaletice project in the Czech Republic.

The news sent shares of Euro Manganese up 83%, or 7.5¢, by early afternoon in Toronto to 16¢. The company has a market capitalization of $64 million.

The funding is split into two US$50 million components. A US$50 million loan facility, convertible into a 1.29-1.65% royalty on project revenues and another US$50 million in exchange for a 1.93-2.47% royalty on project revenues following a final investment decision by the company’s board.

Euro Manganese’s Chvaletice project is the only sizeable, classified resource of manganese in the European Union. 

The project entails re-processing manganese deposits contained in waste (tailings) from a decommissioned mine that operated between 1951 and 1975.

A 2022 feasibility study pegged initial capital costs for the project at US$757.3 million. The after-tax net present value (at an 8% discount rate) was estimated at US$1.3 billion, and the internal rate of return at 21.9%.

Manganese is a key ingredient in nickel-manganese-cobalt (NMC) and lithium-ion batteries.

The company plans to convert the carbonate to high-purity manganese metal and sulphate and send it to Euro Manganese’s planned processing facility in Quebec, where it will be converted into a liquid sulphate. The site is adjacent to two proposed cathode plants allowing the liquid sulphate to be piped directly into the cathode production processes.