Manganese X PEA outlines Battery Hill mine with US$486M NPV, 25% IRR

Manganese X Energy (TSXV: MN; OTC: MNXXF) has delivered a positive preliminary economic assessment (PEA) for its wholly-owned Battery Hill project located near Woodstock, N.B., demonstrating the potential for a low-capital, long-life manganese mine operation in North America.

The study expects the project to produce about 68,000 tonnes of high-purity manganese sulphate over a 47-year mine life. At a 10% discount rate, the project would generate a post-tax net present value of US$486 million and a post-tax internal rate of return of 25% using a base case market price of US$2,900 per tonne for battery-grade high-purity manganese sulphate. Capital costs are estimated at US$350 million, with a payback of 2.8 years.   

“The PEA confirms robust economics, good business metrics (and the) long term viability of manganese, which is consistently in the news as a battery chemistry of choice,” Manganese X CEO Martin Kepman told The Northern Miner.

An increasing number of battery manufacturers are looking at manganese as a viable option as it is stable, can increase energy density – which increases capacity and improves driving range – and also because it can decrease the combustibility of batteries made for electric vehicles (EVs), Kepman said.

“To the best of our knowledge Manganese X is the only manganese company that can successfully convert a low grade (9%) manganese carbonate/silicate mineralization into an EV compliant high-purity manganese sulphate monohydrate (HPMSM) economically without using costly and environmentally unfriendly electrolytic manganese processing,” he said.

“This new process was validated through repeated cycles of testing and eliminated one of two major purification steps potentially creating important economic advantages for the project,” Kepman added.

Located 6 km away from the the town of Woodstock, the project covers about 14.07 sq. km and has a resource estimate of 35.14 million tonnes grading 6.39% manganese and 10.64% iron in the measured and indicated categories and 27.72 million tonnes grading 6.46% iron and 10.73% iron in the inferred category. 

According to the PEA, the project would generate average annual gross revenue of US$177 million over a life of 47 years, including 40 years of mine production and seven years of stockpile reclaim feed. Average gross revenue for the first seven years is US$220 million.

“Our economics are very positive…we  have been approached by several EV companies,” Kepman said. “We have also been in contact with various government agencies to help support our company financially and their response to date has been very positive. We hope to become   a possible North American EV battery raw materials supplier without depending on unstable foreign suppliers.” 

Kepman added that leading EV manufacturers like Tesla are using batteries that are rich in manganese since it helps achieve a longer driving range.

“Elon Musk loves manganese,” he said. “The fact that other battery metals (like lithium and nickel) are enjoying the spotlight just makes us more valuable as more and more batteries use higher manganese content.” 

The company is now advancing towards a pilot project, pre-feasibility study, as well as a drilling program to upgrade and expand the Battery Hill manganese resources. 

At press time in Toronto, Manganese X Energy’s shares were trading at 36.5¢ within a 52-week trading range of 22¢ and 58¢. The company has 125.5 million common shares outstanding for a market cap of about $45 million.