Euro Manganese to Buy Back Chvaletice Royalties
Euro Manganese to purchase and extinguish an aggregate 1.2% royalty interest in the Chvaletice Manganese Project for US$4.5 million.
Based on the 2019 PEA assumptions and results, which will be updated with the completion of the definitive feasibility study, eliminating the royalty would increase the Chvaletice Manganese Project’s after-tax NPV10%by US$25.3 million.
Similarly, based on the 2019 PEA assumptions and results, eliminating the royalty would reduce operating expenses by US$91.1 million over the Project’s 25-year life, and reduce cost per tonne of plant feed by 2.5%.
VANCOUVER, British Columbia (May 31, 2021) – Euro Manganese Inc. (TSX-V / ASX: EMN) (the “Company” or “EMN”) is pleased to announce that it has entered into royalty termination agreements (the “Royalty Termination Agreements”) to purchase and extinguish an aggregate 1.2% net smelter royalty (“NSR”) interest in the Chvaletice Manganese Project (the “Project”) for aggregate consideration of US$4.5 million (approximately CAD$5.45 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. See EMN news release of January 30, 2019, entitled “Euro Manganese Announces PEA Results for Chvaletice Manganese Project with an after-tax Net Present Value of US$593 Million.” 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,” says Euro Manganese CEO Marco Romero. “We continue to evaluate other potential value-enhancing opportunities for the Project.” Terms of the Royalty Termination Agreements
Under the terms of the Royalty Termination Agreements, the purchase price of US$4,500,000 (approximately CAD$5,450,000) is to be paid to the former holders of the NSR as follows:
1. Twenty percent (20%) in cash, amounting to US$900,000 (CAD$1,090,000) which was paid May 31, 2021; and
2. the remaining eighty percent (80%), amounting to US$3,600,000 (approximately CAD$4,360,000), on or before January 31, 2022 by one of the methods below, at the sole option of the Company:
(a) all in cash; or
(b) a combination of cash and up to 50% in common shares of the Company (“Shares”), based on a price per share equal to the 20-day volume weighted average price of the Shares on the TSX Venture Exchange (“TSXV”) immediately prior to the date of issuance.
The issuance of Shares as payment for the NSR purchase price is subject to approval of the TSXV.
Related Background Information
A copy of the NI 43-101 Technical Report entitled "Technical Report and Preliminary Economic Assessment for the Chvaletice Manganese Project Chvaletice, Czech Republic" having an effective date of January 29, 2019 (release date March 15, 2019) was filed on SEDAR on March 15, 2019. The JORC Code Report entitled “Public Report and Preliminary Economic Assessment of the Chvaletice Manganese Project, Chvaletice, Czech Republic” having an effective date of January 29, 2019 (release date March 22, 2019) was lodged on the ASX announcement platform on March 26, 2019.
The technical information in this news release concerning the Chvaletice Manganese Project was prepared under the supervision of Ms. Andrea Zaradic, P. Eng., a Qualified Person under National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101"). Ms. Zaradic has reviewed and approved the technical information contained in this news release and has consented to the inclusion of the matters in this news release based on the information in the form and context in which it appears.
Download news release here:
About Euro Manganese:
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.
Authorized for release by the CEO of Euro Manganese Inc.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) or the ASX accepts responsibility for the adequacy or accuracy of this release.
Euro Manganese Inc.
Marco A. Romero
President & CEO
(604)-681-1010 ext. 101
Fausto Taddei Vice President, Corporate Development & Corporate Secretary
(604) 681-1010 ext. 105
Director of Communications
#709 -700 West Pender St.
Vancouver, British Columbia, Canada, V6C 1G8