Interview with Marco Romero, President & CEO of Euro Manganese Inc. (TSXV/ASX: EMN) Euro Manganese is a Czech Republic-based Manganese tailings/recovery story. Euro Manganese is working on a Feasibility Study. It has already done a PEA, and is in the late stages of its EIA. It is also filing for permits and preparing to build a demonstration plant.
Euro Manganese has a share price of CAD$0.15, a market cap of CAD$25M and 176M shares outstanding. This is also a green story.
Romero regards Manganese as the forgotten battery metal. He says every Western EV brand needs Manganese. Manganese is predominantly intended for NMC cathodes in lithium-ion batteries. Euro Manganese offers investors access to Manganese, in the form of Manganese product production from tailings. Euro Manganese has a single asset: the Chvaletice Manganese Project. Romero regards it as Europe’s largest manganese deposit by far, and a "globally significant deposit." The resource has been 95% quantified over the last 4.5 years, and this has been aided by the mineralogy of the material: very fine particles that are well homogenised and distributed throughout the deposit laterally.
A pilot plant was built as part of the PEA, bur Euro Manganese is now ready to construct its demonstration plant. It needs to source appropriate funding of US$4M, and US$1M per annum for operational purposes. The demonstration plant is designed to produce bulk, multi-ton samples of manganese products for companies to trial. This will prove Euro Manganese's processing flowsheet is effective, which Romero is confident about, given all technology is completely conventional. If they like the manganese products, a CAPEX of US$400M + operating costs has been suggested for a main plant, designed to produce 50,000t of high purity “pharmaceutical” grade manganese products for Chvaletice’s life of resource: c. 20 years.
There are some problems in the way of progress for Romero. Euro Manganese only has US$4.2M on the books as of Q3/19, and will need to raise cash soon to get things off the ground. While the company has signed some contracts an extremely large Chinese international mining company investors will have questions regarding the 'pay-as-you-go nature of Euro Manganese's supply. There is an element of uncertainty as to how much companies will buy, and if they will come back for more. Investors will want to see supply contracts soon.
Romero didn't state Euro Manganese will go to market to raise capital, but we expect this to happen, leading to dilution for shareholders. Will this be the right strategy in the long run?
In terms of timings, investors will also have some major questions. Our educated assumption is that the Demonstration Plant will take c.1 year to construct, followed by a trial period for the Manganese products. Then the Main Plant will need to be constructed and made operational. This could be 4-5 years before EMN actually starts to demonstrate its potential, and there are a huge number of obstacles in the way as far as raising capital, permitting and supply contracts. This story looks like a slow-burner, but one that could be rewarding in the long term. We will keep watch as this story progresses.
What did you make of Marco Romero? Is Manganese a commodity you're familiar with?
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1:13 - Company Overview
1:58 - Manganese Uses in Lithium-Ion Batteries
3:05 - Background Story: Check Republic, the Resource and De-Risking Measures
9:52 - Business Model and Positioning the Company
14:13 - Pilot Plant Results and Contracts with CRIM
18:32 - Goals for the Demonstration Plant
22:40 - Building the Main Plant: Expected Costs
24:20 - Cash Position: What They're Spending and Looking at Future Raises
27:36, 29:59 - The Team: Remuneration, Holdings, and Customer Relations
28:47 - Shareholders, Share Count and Exchanges
31:49 - Challenges for 2020
36:03 - Expected Timings for Deliverables
38:16 - Share Price Hit: What Happened and How They Will Fix it?
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