US$4.5M Purchase To Create Significant Cost Savings
Euro Manganese Inc. (TSXV / ASX: EMN) has entered into royalty termination agreements to purchase and extinguish an aggregate 1.2% net smelter royalty (NSR) interest in the Chvaletice Manganese Project in the Czech Republic for an aggregate consideration of US$4.5 million.
The 1.2% NSR was granted in connection with the company’s acquisition of its 100% interest in Mangan Chvaletice s.r.o. in May 2016 from three arm’s-length parties.
Based on a preliminary economic assessment (PEA) completed in early 2019, extinguishing the NSR interests would eliminate US$91.1 million in expenditures over the Project’s 25-year life, reduce operating costs by US$3.40 per tonne of plant feed (or 2.5% of total cost per tonne of plant feed), and increase the after-tax NPV of the Project by US$25.3 million (approximately 4%) using the PEA’s 10% discount rate.
Euro Manganese CEO, Marco Romero, said all economic assumptions and results will be updated as part of the Project’s feasibility study, which is targeted for completion in the first quarter of 2022.
“Based on the 2019 PEA results and assumptions, this royalty buy-out enhances the Project’s economics, and the payment terms allow the Company substantial financial flexibility,” Mr Romero said. “We continue to evaluate other potential value-enhancing opportunities for the Project.”
Euro Manganese Inc. is a battery materials company whose principal focus is advancing the development of the Chvaletice Manganese Project, in which it holds a 100% interest. The proposed Project entails re- processing a significant manganese deposit hosted in mine tailings from a decommissioned mine, strategically located in the Czech Republic.
The company’s goal is to become a leading, competitive and environmentally superior primary producer of ultra-high-purity Manganese Products in the heart of Europe, serving the lithium-ion battery industry, as well as other high-technology applications.
