Announcement PDF Element 25 Limited Investor Update Building a World-Class Battery Grade Manganese business June 2023 – Clarkson’s Battery Value Chain Webinar ASX:E25 Disclaimer This presentation contains only a brief overview of Element 25 Limited and its associated entities (“Element 25") and their respective activities and operations. The contents of this presentation, including matters relating to the geology of Element 25's projects, may rely on various assumptions and subjective interpretations which it is not possible to detail in this presentation and which have not been subject to any independent verification. This presentation contains multiple forward-looking statements. Known and unknown risks and uncertainties, and factors outside of Element 25’s control, may cause the actual results, performance and achievements of Element 25 to differ materially from those expressed or implied in this presentation. To the maximum extent permitted by law, Element 25 does not warrant the accuracy, currency or completeness of the information in this presentation, nor the future performance of Element 25, and will not be responsible for any loss or damage arising from the use of the information. The information contained in this presentation is not a substitute for detailed investigation or analysis of any particular issue. Current and potential investors and shareholders should seek independent advice before making any investment decision in regard to Element 25 or its activities. Corporate Summary Financial Information ASX Ticker E25 Shares on Issue 190M Share Price $0.60 Debt Nil Introduction Developing the world class Butcherbird Manganese Project in Western Australia to produce high quality manganese concentrate and battery grade High Purity Manganese Sulphate Monohydrate (HPMSM) products for traditional and new energy markets. Reference: www.asx.com.au -3- Experienced Owners Team BOARD OF DIRECTORS Seamus Cornelius Chairman Lawyer Justin Brown Managing Director Geologist John Ribbons Non-Executive Director CPA Fanie van Jaarsveld Non-Executive Director Analytical Chemist Sam Lancuba Non-Executive Director Chemical Engineer Ian Huitson Study Manager Mining Engineer Sias Jordaan Marketing Manager Accountant Neil Graham Development Manager Chemical Engineer PROJECT DEVELOPMENT TEAM Michael Jordon Chief Financial Officer CPA Doug Flanagan COO (HPMSM) Engineer -4- Recent board additions strengthens depth of industry & operational experience for both mining and chemical processing divisions. Our Strategic Vision… Stage 1 Stage 2 Stage 3 Stage 4 365Kt per annum 1 Mt per annum High Purity MnSO4 MnSO4 Expansion Expansion The Prize Zero Carbon Manganese™ In production, optimising process, preparing expansion Strong OEM support –signed with Stellantis for offtake and financing Engineering design and costing in progress using DMS option Long term - multiple HPMSM modules globally 1 year plan 5 year plan Cashflow Low capital cost, rapid start up to establish E25 as a producer while minimising dilution. Improved resource utilisation, reduction in unit operating costs, increased operating cash. Position E25 as a globally dominant producer of high purity, sustainable manganese products. -5- Best in class, zero carbon, ethically produced, scalable high purity manganese for global markets. Not all manganese is created equal Serving the Established… • And the Emerging… Manganese (Mn) is the fourth most used metal • on earth in terms of tonnage. • Used in steel, specialty alloys and aluminium products. • Traditionally the market has been dominated by the requires vast amounts of cathode materials. • There is no substitute for manganese in steel. • E25 manganese concentrate and EMM feed this market. Nickel and cobalt supplies cannot meet projected demand for new energy vehicle (NEV) growth. steel and alkaline battery industries. • The electrification of the global vehicle fleet • Batteries are trending toward higher manganese content for safer, more cost-effective solutions. • -6- E25 high purity manganese will feed these markets. Great infrastructure endowment, fully permitted 100% E25 owned, long term tenure. E52/2350 M52/1074 Granted Mining Lease Measured & Indicated Simple Logistics Resources are the basis for the 42-year Base Case -7- Very simple geology equals low-cost, low impact manganese units Classification Tonnes (Mt) Mn (%) Contained Mn (Mt) Resource 263 10.0 20.8 Reserve 50.6 10.3 5.22 RESOURCE GROWTH POTENTIAL • Enough resource base for multidecade long expansion pathway. • Can produce concentrate, battery grade HPMSM and EMM without resource limitation. ENVIRONMENTALLY BENIGN OPERATION -8- • Ore from surface • No explosives required • No waste water • One reagent – water • Extremely low levels of contaminants Stage 1: Project Delivery Complete – Engineering Optimisation Progressing Process Water Storage Tails Storage ROM Stocks Main Access Road Processing Plant Ore Stockpiles Feedstock for HPMSM conversion -9- Our Goal – Zero Carbon High Purity Manganese… Stage 1 First production of manganese concentrate to sell to manganese alloy manufacturers Multi-stage growth potential Stage 2 Expansion of the concentrate production to produce manganese feedstock to convert to MnSO4 Stage 3 Establishing a conversion facility to convert the concentrate to battery grade HPMSM with renewable energy New Energy Vehicle (NEV) Demand Growing Strongly Umicore chemistries addres vehicles equals more EV batteries! of More total Light-duty CAM d Global CAM demand (GWh) LDV only – Chemistry split 2,400 ~25% CAGR 1,300 ~75% 400 Mn 2022 ~25% 2026 NMC/NCA, Manganese-rich Reference: McKinsey & Company: - Electric vehicles: The next growth engine in chemicals, 2023 - 11 - 2030 LF(M)P U a m d to d a The Battery Industry is Looking to Manganese LMR NMC NMC → LMR LFP LFP LMFP → LMFP Manganese in cathodes: 17% of material but only 2% of cost (NMC 622) Reference: Volkswagen, Stellantis, Tesla, CPM Group, Morgan Stanley Research, Bloomberg New Energy Finance Umicore Capital Markets Day 2022 Reference: Volkswagen, Stellantis, Tesla, CPM Group, Morgan Stanley Research, Bloomberg New Energy Finance Mn Battery Chemistries are Adapting to Supply Constraints Manganese, the battery raw material supply chain solution? PDAC 2023 Keynote Speaker “…manganese (is) the single most critical mineral for batteries right now,” he said. “How many companies outside of China make manganese commercially for a battery right now? Which is the hottest metal for batteries? How many? None, not one,” Hoffman said, adding “and there’s where the opportunity is — unbelievable.” “…manganese is the single most critical mineral for batteries right now…” Ken Hoffman, co-head of the EV battery materials research group and senior expert at McKinsey & Company https://www.benzinga.com/news/23/03/31265433/exclusive-ev-battery-guru-ken-hoffman-at-pdac-talks-critical-minerals-which-metals-will-rise Low cost, efficient HPMSM process – significant improvements… Problems with Current Technologies • • • • • The Element 25 Process makes significant changes & improvements… Large volumes of waste residues Toxic Reagents Inefficient Higher Cost Outdated processing technology Reagents/Cost Carbon Emissions Waste Residue Element 25 Process • • • • • More efficient (fast kinetics, reduced energy) Minimises reagent requirements Reduced carbon intensity Lower volumes of waste residues Non-toxic residues may be able to be repurposed. 99.9% MnSO4 - 14 - Targeting Zero Carbon Manganese – ESG is integral to our thinking • LCA covers Scope 1,2 and 3 emissions from mining through Existing producers often use high energy processes to the proposed USA-based HPMSM processing plant. like electrowinning and/or toxic reagents like fluoride. E25 HPMSM to produce ~1.7kg of CO2 for every 1kg of HPMSM: o ~ 67% lower than competitors in China. o up to 47% lower than competitors outside China. o ~26% lower than next lowest project’s optimised case. • E25 process is not yet fully optimised for carbon reduction. • E25 to explore renewable energy and other potential carbon reduction strategies to further reduce CO2. Supply chain transparency and traceability partner. 5.2 4.8 PUBLISHED PEER COMPARISONS Kg CO2 eq. per kg (Scope 1+2+3) • Global Warming Potential 3.2 2.3 1.7 ELEMENT 25 EURO MANGANESE (RENEWABLE) GIYANI METALS THE E25 PROCESS IS THE LOWEST CARBON INTENSITY OPTION FOR HPMSM TODAY Reference: Company ASX Release dated 16 February 2023 EURO MANGANESE (GRID) CHINESE PLANTS (CURRENT) Stage 3 Expansion of Conversion Capacity – Multiple Plants Planned EU JP KR Mn Concentrate Feedstock (33% Mn): Up to 1M tonnes per annum manganese concentrate production planned at the Butcherbird Project in Western Australia. MY • E25 manganese concentrate is a very AU stable, easily transported feedstock. • Allows location optionality for the processing facility. • Feasibility Study Site: Louisiana USA Multiple potential sites being explored. - 16 - Design One Build Many US Inflation Reduction Act 2022 – What’s Changed? Summary of Impacts on Battery Supply Chains • Regulations effective from January 1, 2025. • Requirement for 40% of battery materials to be sourced from north American or allied countries from 2024. • Increasing to 80% by 2026. • Allied countries include Australia, manganese is a qualifying critical mineral. What does this mean for E25? • E25 HPMSM can meet all the stated requirements of the new regulations. • E25 resource size can supply conversion requirements for USA customers to meet their consumption needs for decades. • Potential built in north America to ensure customers’ HPMSM requirements meet regulatory and strategic goals. • After calendar year 2024, the incentives will not be available for EVs that contain critical minerals that were “extracted, processed, or recycled by a foreign entity of concern”. Reference: DLA Piper website, Argonne National Laboratory, US Dept. of Energy Mn Geopolitical Challenges are Influencing Investment Trends Supply Chain Diversification • Current battery raw material supply is dominated by China. • Single source supply threatens supply security. • Supply chain diversity increasingly important to OEMs. Manganese is increasingly important as an EV battery cathode material. OEMs are seeking ethical, cost competitive, low carbon supply. Australian HPMSM can solve these challenges. ESG • OEM commitments to zero carbon require low carbon supply. • E25 process provides the lowest carbon intensity HPMSM available. Transparency & Traceability • ESG considerations are increasingly influencing supply decisions. • Carbon Zero commitments by vehicle makers requires clarity on supply chain carbon intensity. • Single source Australian manganese processed in a vertically integrated USA facility for OEM customers can solve this challenge. Reference: McKinsey & Company: - Electric vehicles: The next growth engine in chemicals, 2023 - 18 - Feasibility Study - compelling economics Production Plant – Location Optionality PACKAGING & PRODUCT STORAGE PURIFICATION & CRYSTALLISATION PROVISION FOR EXPANSION STAGE (2X PRODUCTION) ORE STORAGE & COMMINUTION Note: artist’s impression – subject to final design - 20 - REDUCTANT STORAGE Offtake & Financing – Stellantis • E25 and Stellantis sign definitive agreements for the supply of battery-grade highpurity manganese sulphate (HPMSM) for Stellantis’ EV battery requirements. • Key commercial terms include: Stellantis is a leading global automaker and mobility • E25 to supply HPMSM for a minimum of five years, with opportunities to extend. provider that offers clean, connected, affordable and • E25 to supply up to 10,000tpa HPMSM for five years with provisions to increase volumes. safe mobility solutions. Our Company’s strength lies in • Stellantis to part-fund development of E25’s HPMSM processing facility with US$30M investment in two tranches. the breadth of our iconic brand portfolio, the diversity and passion of our people, and our deep roots in the communities in which we operate. • Offtake represents ~15% of total planned production volumes. • Funding commitment represents ~15% of total anticipated capital cost. and the creation of an innovative ecosystem of • Arrangement includes commitments from E25 with respect to ESG and IRA transformation to a sustainable mobility tech company. compliant supply chains (Australian ore processed in USA). Our ambitious electrification and software strategies strategic, game-changing partnerships are driving our Our Strategic Vision… Stage 1 Stage 2 Stage 3 Stage 4 365Kt per annum 1 Mt per annum High Purity MnSO4 MnSO4 Expansion Expansion The Prize Zero Carbon Manganese™ In production, optimising process, preparing expansion Strong OEM support –signed with Stellantis for offtake and financing Engineering design and costing in progress using DMS option Long term - multiple HPMSM modules globally 1 year plan 5 year plan Cashflow Low capital cost, rapid start up to establish E25 as a producer while minimising dilution. Improved resource utilisation, reduction in unit operating costs, increased operating cash. Position E25 as a globally dominant producer of high purity, sustainable manganese products. - 23 - Best in class, zero carbon, ethically produced, scalable high purity manganese for global markets. Thank you For more information, please contact Element 25 Limited: +61 8 6375 2525 admin@e25.com.au www.element25.com.au ASX:E25 Our Strategic Vision… FUTURE FOCUS CURRENT FOCUS Resource scale of the Butcherbird Project underpins long-term growth. Company Growth Stages Industry Segments Opportunity Manganese Ore All Manganese Industries Reliable Long Term Supply Ethical Clean Manganese Supply Long term ethical supply of manganese units for downstream processing Manganese is the world’s fourth largest metal market and is used in many products from steel to batteries, glass, ceramics and more. Demand for high quality, ethically sourced manganese units remains strong. Australia is close to market and geopolitically stable. Manganese Sulphate Lithium Ion Battery Cathodes Electrification of Global Vehicle Fleet Powering the EV Revolution Providing ethical, low carbon battery materials to enable the EV transition Manganese offers advantages including increased safety, lower costs and ethical supply. High Mn cathodes are in focus. A macro trend that will dominate the car industry for decades. Demand for high quality ethical HPMSM to grow for many years. Manganese Metal Steel and Specialty Alloys Supply Chain Diversity Future R&D Pathway Supply chain issues not limited to batteries. Traditional consumers are also desperate for ethical, low carbon supply of EMM. Strong interest from steel makers to access alternative, ethically sourced, low carbon steel inputs. Applying the E25 technology to other manganese products including EMM. Reserves and Resources Maiden Ore Reserve1 Category Tonnes (Mt) Mn (%) Contained Mn (Mt) Proved 14.4 11.5 1.65 Probable 36.2 9.8 3.56 Total 50.6 10.3 5.22 • indicated resources to reserve. • Maiden Reserve only exploits approximately 20% of global mineral resource. Global Mineral Resource2 Category Tonnes (Mt) Mn (%) Si (%) Fe (%) Al (%) Measured 16 11.6 20.6 11.7 5.7 Indicated 41 10.0 20.9 11.0 5.8 Inferred 206 9.8 20.8 11.4 5.9 Total 263 10.0 20.8 11.4 5.9 1Reference: Element 25 Limited ASX release dated 30 September 2022. 2 89% conversion of measured and Reference: Element 25 Limited ASX releases dated 17 April 2019. - 26 - • Excellent potential for future expansion. • More drilling has potential to add to global resource. Competent Person’s Statement The information in this presentation that relates to Exploration Results is based on information compiled by Mr Justin Brown who is a full-time employee of the Company and is a member of the Australasian Institute of Mining and Metallurgy. Justin Brown has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Justin Brown consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. All references to Mineral Resources pertain to the ASX release dated 17 April 2019. The Company confirms that all material assumptions, underpinning the estimations continue to apply and have not materially changed. All references to Mineral Reserves pertain to the ASX release dated 30 September 2022. The Company confirms that all material assumptions, underpinning the estimations continue to apply and have not materially changed. For further information on Element 25 Limited and its Projects please visit its website at www.element25.com.au which contains copies of all continuous disclosure documents to ASX, Competent Persons’ Statements and Corporate Governance Statement and Policies. DISCLAIMER The views expressed herein are not necessarily the views of the Australian Government, and the Australian Government does not accept responsibility for any information or advice contained herein. - 27 -