EMN signs non-binding offtake agreement for high purity manganese

Published 20-AUG-2024 17:12 P.M.

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Yesterday, our development stage manganese Investment Euro Manganese (ASX: EMN) announced it has entered into an offtake term sheet with Wildcat Discovery Technologies for the sale of high-purity manganese products from its Chvaletice project in the Czech Republic.

Key deal terms:

Initial 7-year term with potential renewal, commencing from first production.
Deliveries contingent on Wildcat qualifying EMN's product from the demonstration plant.
Offtake tonnages increase over the term to represent a significant portion of EMN's planned output.
Pricing subject to market indicators and benchmarks.
Term sheet is non binding an subject to Wildcat building its US plant.

Wildcat is a U.S. company focused on producing nickel and cobalt-free cathode materials for EV batteries, with plans to build a domestic plant by 2026-2027.

The term sheet aligns with EMN's strategy of supplying European and North American EV supply chains.

EMN is currently at the offtake and financing stage of its project.

It can often be a “chicken or the egg” game with offtake and financing agreements.

Banks will be reluctant to lend to companies that don’t have a guaranteed future cash flows (offtakes) and offtake agreements don’t want to lock in their future supply with a company that may not reach production.

EMN signed a $100M convertible loan and royalty agreement with Orion late last year.

EMN’s next $30M funding unlock is when it reaches 40% of its future production under offtake agreement.

It is currently at 22.5% with a term sheet signed with Verkor.

Although the agreement is non-binding, and terms to be finalised when Wildcat completes its cathode plant, this deal shows that EMN is on the right path to finding customers for its manganese.

Currently, EMN has 11 parties in the late-stage discussions for offtake term sheets.

We hope that the company can deliver a number more of these as it gets closer to FID (Final Investment Decision) scheduled for next year.

How does this affect our EMN memo?

Objective #3: First Offtake Partner

Large scale samples of High Purity Manganese need to be assessed for quality by end users who then sign an offtake agreement for future supply - an offtake agreement would be a major achievement for EMN.

Milestones
✅ First offtake partner
🔄 Bonus: second offtake partner

Source: What do we expect EMN to deliver? Section - EMN Investment Memo 17-Jun-2022

Milestones
✅ First offtake partner
🔄 Bonus: second offtake partner