[Ferro-Alloys.com] NAIF to Provide $50 Million Finance Package For Butcherbird Expansion Project

 HIGHLIGHTS:

Northern Australia Infrastructure Facility (NAIF) to provide up to AU$50 million senior debt facility for Element 25’s Butcherbird Manganese Expansion Project (BBX) in Western Australia’s (WA) Pilbara region.

Updated BBX Feasibility Study (BBX FS) released in January 2025 based on a 1.1Mtpa manganese ore operation and delivers outstanding metrics

Butcherbird manganese concentrate will be the primary feedstock for Element 25’s planned battery grade, high purity manganese sulphate monohydrate (HPMSM) processing facility in Louisiana, USA which has been awarded US$166 million in grant funding from the USA Department of Energy.

Manganese concentrate not required for HPMSM conversion will be sold to customers in the manganese alloy and steel industries.

BBX is fully approved under WA Regulatory Framework including WA Department of Water (DWER)3 and Environmental Regulation and WA Department of Energy, Mines, Industry Regulation and Safety (DEMIRS)4.

Under the current project financing strategy for BBX, NAIF will act as the sole senior secured lender to the project with the balance of required funds to be sourced from alternative financiers including offtake prepayment, subordinated debt and royalty financing as potential mechanisms.

Finalisation of formal documentation for the funding package, including a AU$7.5 million cost overrun facility, is scheduled for completion in line with the BBX project plan.

Element 25 Limited is pleased to announce it has secured a senior debt finance facility of up to AU$50 million from the Federal Government’s Northern Australia Infrastructure Facility (NAIF) towards expansion of its Butcherbird Manganese Project in WA.

NAIF is a Commonwealth Government financier providing concessional loans for the development of infrastructure projects in northern Australia and the Australian Indian Ocean Territories to deliver economic and social growth5. NAIF completed a strategic assessment and due diligence process over the BBX Project in 2024.

NAIF will provide AU$42.5 million in senior debt and AU$7.5 million cost overrun facility to support Element 25’s plans to expand Butcherbird’s production capacity to 1.1 million tonnes per annum (Mtpa)1 of manganese oxide concentrate. Butcherbird’s expansion will enable it to supply manganese concentrate feedstock for Element 25’s planned battery grade, high purity manganese sulphate monohydrate (HPMSM) processing facility which it plans to build in Louisiana, USA, as well as securing concentrate sales to other customers.

The Company is in discussions with a number of potential financiers for the balance of the required project finance for BBX vias a range of potential structures including offtake prepayment and royalty instruments.

Element 25 Managing Director Justin Brown said: “Securing this support from the Federal Government’s Northern Australia Infrastructure Facility reaffirms the government’s commitment to developing Australia’s critical minerals sector and Butcherbird’s economic importance to Australia and the Pilbara region of WA. Our Feasibility Studies have confirmed Butcherbird’s pedigree as a long-life manganese concentrate production hub from its 274 million tonne resource, which is integral to our plans for HPMSM in the USA as well as potentially other locations around the world. This support from NAIF is critical to our plans to expand Butcherbird to meet this growing demand as the world continues to shift towards electrification and energy transition. Batteries will potentially use as much as 10 times more manganese if battery chemistry shifts towards lithium manganese rich, or LMR, chemistries as recently announced by various tier 1 OEMs and battery makers including General Motors, Ford and Posco FM. We want to expand Butcherbird to help meet this demand, and look forward to delivering the expansion with NAIF’s support.”

A Feasibility Study for Butcherbird expansion updated in January 2025 estimated a capital cost of AU$64.8 million with a pre-tax Net Present Value (NPV) of AU$561 million with a 96% pre-tax Internal Rate of Return (IRR), generating an average of AU$70.5 million per year cashflow over a mine life of more than 18 years.

NAIF’s support for the Butcherbird Expansion Project follows Element 25’s awarding of a Grant Agreement for US$166 million (AU$268 million) from the U.S. Department of Energy (DoE) under the Battery Materials Processing Grant Program9 to support construction of its planned HPMSM facility in Louisiana, which will bring domestic production of a key critical battery raw material to the USA. Element 25 has also secured US$115 million from its offtake partners General Motors LLC (GM) and Stellantis N.V. (Stellantis).

Using manganese ore sourced from Element 25’s Butcherbird mine and shipped to Louisiana, Element 25 plans to leverage its innovative, advanced processing flowsheet to convert Butcherbird manganese concentrate into HPMSM, a critical raw material for the manufacture of lithium-ion batteries. The proprietary flowsheet reduces energy consumption, virtually eliminates waste and delivers the lowest reported carbon intensity HPMSM globally.

Recent industry developments include a potential industry shift towards lithium manganese rich (LMR) battery chemistry, rather than a high nickel formulation, with Element 25’s offtake partner GM one of the first automakers looking to adopt this technology, after spending more than a decade on research12. While high nickel battery cells typically use about 5-10% manganese, LMR battery cells use around to 50-70% manganese increasing the required manganese by a factor of around ten.

Element 25’s process offers a pathway to the delivery of expanding volumes of ethically sourced, traceable, transparent HPMSM supply to US markets. Element 25 plans to produce up to 135Kt per annum of HPMSM for US electric vehicle (EV) supply chains in a first-of-its-kind processing facility in Louisiana.

APPROVALS

Element 25 has all necessary approvals in place for BBX after receiving final statutory approval from the WA Department of Water and Environmental Regulation (DWER) in March 202515, and works approval of its Mining Proposal and Mine Closure Plan by WA Department of Energy, Mines, Industry Regulation and Safety (DEMIRS) in January 2025.

All other required approvals and access agreements are in place and established from Butcherbird’s Stage 1 pilot operations including water abstraction, heritage clearances, Native Title and pastoral agreements.

NEXT STEPS

The NAIF financing facility is subject to customary legal due diligence and the execution of formal contracts typical for a facility of this type. The balance of funds are currently being sourced from a range of potential financing groups including royalty, stream and offtake prepayment. The Company also has strong relationships with various equity providers. The details of the financing structure to support the NAIF facility will be reported as they are finalised.

The Company has also been actively working with key suppliers to support the project, including engineering contractors, mining and haulage contractors and representatives from the Pilbara Ports Authority in regards to mining and logistics support services. Key commercial contracts will be finalised in accordance with the Project plan. The BBX Project team is working to a detailed project execution plan and schedule which will deliver the project in 2026.

• [Editor:tianyawei]