Euro Manganese Reports Fourth Quarter and Year-End 2023 Financial Results and Project Developments
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NR 2022-24
Euro Manganese Reports Fourth Quarter and Year-End 2023 Financial Results
and Project Developments
VANCOUVER, British Columbia (December 14, 2023) – Euro Manganese Inc. (TSX-V and ASX: EMN; OTCQX:
EUMNF; Frankfurt: E06) (the "Company" or "EMN") is pleased to announce key developments during the
fourth fiscal quarter 2023 and to date. The Company has now filed its September 30, 2023 year-end
Financial Statements, Management’s Discussion and Analysis, and other financial reports.
Key Developments During and Subsequent to the Quarter
Chvaletice Project, Czech Republic
• US$100 million non-dilutive funding package announced to advance development of the Chvaletice
Manganese Project (the "Project"); US$20 million received on closing. Definitive agreements signed
with OMRF (BK) LLC ("Orion"), which is managed by the Orion Resource Group, for a US $100 million
funding package, split into two US$50 million components: a US$50 million Convertible Loan Facility
and a US$50 million Royalty Financing.
The 36-month secured Convertible Loan Facility bears interest at 12% p.a. and is structured in two
tranches: US$20 million, which was received upon closing, and an additional US$30 million to be
received upon meeting key technical and commercial milestones. The loan is convertible into a royalty
stream on Project revenue . The US$50 million Royalty Financing can be drawn following a final
investment decision by the Board.
All aspects of the funding package were structured to meet Project finance bankability requirements
and will sit alongside, and reduce, the project finance debt and equity required for the full Project
financing. For further details on the Convertible Loan Facility and Royalty Financing, please refer to
the Company’s announcement on November 28, 2023.
In connection with the funding package, Orion have an offtake option of between 20 -22.5% of the
Project’s high -purity manganese total production, for a term of 10 years from first delivery and
matching the commercial terms of the Company’s sales. Such righ t is exercisable until the Company
signs 60% of the total Project offtake.
• Production of HPMSM from the Chvaletice Demonstration Plant de-risks the process flow sheet .
Two independent external laboratories confirmed samples sent for testing met the Demonstration
Plant target specifications for high -purity manganese sulphate ("HPMSM") with low levels of
impurities.
Third-party high-purity electrolytic manganese metal ("HPEMM"), with similar product impurity levels
to those of the Chvaletice HPEMM product, was used as feedstock during the commissioning of the
dissolution and crystallization module. As part of the final commissioning stages of the Demonstration
Plant, the Company will use HPEMM produced from the electrowinning circuit for HPMSM
production.
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The team is gaining valuable insights from operation of the Demonstration Plant, which are leading to
engineering and operational process improvements.
• Revised ESIA resubmitted to Czech Ministry of Environment, no anticipated effect on timeline to
final investment decision. Work was completed to address the comments received related to noise
abatement. The Company anticipates the issuance of a positive decision on the revised Environmental
Social Impact Assessment ("ESIA") in early 2024.
• Preparation of other key permits is progressing well. Documentation for the Land Planning Permit is
substantially complete and will be finalised upon receipt of the conditions in the approved ESIA. The
Land Planning Permit will be submitted on approval of the ESIA. The Construction Permit is a
deliverable of the FEED phase of engineering and is expected to be submitted in H2 2024.
• Definitive Lease Agreement with ČEZ a.s. ("ČEZ") provides access to approximately 60% of th e
Proven and Probable Manganese Reserves in the historic tailings area. Land access is granted in
return for a royalty on gross sales from the Project. During the seven-year project finance debt period,
the royalty will operate on a sliding scale from 0.2 -1.8%, dependent on the average prices received
for the Project’s high -purity manganese products. The sliding scale royalty is designed to ensure
anticipated project finance debt covenants are met. Post the debt period, the royalty will be 1.8% of
gross sales from the Project.
• Access to approximately 85% of Chvaletice Proven and Probable Reserves secured. The ČEZ Lease
Agreement, together with previously announced land access agreements, secures access to
approximately 85% of the total Reserves of the Project. Negotiations with respect to acquisition of
the balance of the surface rights with the remaining landowner are progressing.
• Rezoning of all land required for the Project now complete. The Municipality of Chvaletice formally
approved the rezoning of tailings land for mining use and certain areas within the commercial plant
site that were required to be reclassified for heavy industrial use. Together with the rezoning of the
Village of Trnavka’s tailings land for mining use, announced in March 2022, the rezoning requirements
for the Project are now complete.
• Chvaletice Project selected for support under inter -governmental Mineral Security Partnership
("MSP"). The MSP is a collection of 13 countries and the European Union that aims to catalyze public
and private sector investment to build diverse, secure and responsible critical mineral supply chains
globally. Chvaletice was the only manganese project amongst the 17 projects the MSP is working to
advance. Projects are to receive support by lev eraging the collective financial and diplomatic
resources of the MSP’s 14 Partners and private sector financiers partnering with the MSP.
• €3 billion fund proposed by the European Commission to boost growth in EU battery industry a
potential opportunity. Starting in 2024, up to €3 billion in funding is proposed to be provided via the
Commission’s Innovation Fund to incentivize investment in the European Union’s battery
manufacturing capacity. The Commission intends to set up a dedicated instrument under the
Innovation Fund to provide support, possibly as a fixed premium to European manufacturers of the
most sustainable batteries, creating impact across the entire battery value chain, including its
upstream raw material segment.
Offtake Process
• Offtake process progressing with over 100% of annual production capacity under discussion. Active
discussions and negotiations are taking place with potential customers across the battery supply
chain, including battery, chemical and automobile manufacturers. The Company is targeting 80% of
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production capacity under offtake contract to support project finance. In addition, several larger
potential customers are yet to provide an allocation of tonnage to the Company but have expressed
an expectation to do so.
Bécancour Facility, Quebec, Canada
• Bécancour Dissolution Plant Scoping Study delivered strong preliminary project economics .1 The
Scoping Study outlined a post-tax Net Present Value ("NPV") of C$190 million using an 8% discount
rate, a post-tax Internal Rate of Return ("IRR") of 26%, and a payback period of approximately 4 years.
The economic analysis has a margin of error of -30%/+50% and was run on an unlevered and constant
dollar basis with no inflation or government grants considered. Initial capital is estimated at C$110.8
million, including contingencies of C$15.1 million. Plant production capacity is estimated to be 48,500
tonnes per annum ( "tpa") of HPMSM, assuming sufficient supply of HPEMM feedstock. This could
meet up to 20% of projected North American 2027 demand for HPMSM, according to forecasts by
CPM Group. There is no current processing capacity or production of battery -grade mangane se in
North America.
• MoU signed with Manganese Metal Company ("MMC") for supply of HPEMM. The MoU provides
feedstock optionality for the Bécancour Plant, allowing it to be fed with HPEMM from MMC and/or
with HPEMM from the Company’s Chvaletice Project. This enables the potential for the Bécancour
Plant to supply the North American market as early as mid-2027, thus bringing forward cash flows for
the Company.
• WSP Canada selected for Bécancour Dissolution Plant Feasibility Study. The Feasibility Study will
further define project design, costs, economics, and customer off-take opportunities and is subject to
financing. Permitting is expected to advance in parallel with the Study to facilitate the path to
production.
• Cooperation Agreement signed with the Grand Conseil de la Nation Waban-Aki ("W8banaki"). The
Agreement defines how the Company and the W8banaki intend to communicate openly and regularly,
and to work together for the mutually acceptable development of the Bécancour Project, especially
during the evaluation and planning phases.
Financial Position
• Cash and cash equivalents of approximately C$7.6 million at FQ4/fiscal year-end (September 30,
2023); compared to C$10.9 million at FQ3 (June 30, 2023) and C$21.6 million at fiscal year-end 2022.
The decrease in cash of $13.9 million year over year is a result of $10.8 million used in operating
activities and $3.1 million used in investing activities, which included payment for the Demonstration
Plant costs and certain land.
• Working capital of C$5.7 million at FQ4/fiscal year-end (September 30, 202 3), compared to
C$9.2 million at FQ3 (June 30, 2023) and C$19.8 million at fiscal year-end 2022.
• Sufficient funding for delivery of key project milestones . The net proc eeds from the first US$20
million tranche of the Convertible Loan Facility , received post fiscal year -end, is expected to be
sufficient funding to complete permitting of the Project, commissioning of the Chvaletice
1 Euro Manganese cautions that the Study does not constitute a scoping study within the definition used by the Canadian Institu te of Mining,
Metallurgy and Petroleum ("CIM"), as it relates to a standalone industrial project and does not concern a mineral pr oject of the Company. As a
result, disclosure standards prescribed by National Instrument 43 -101 – Standards of Disclosure for Mineral Projects ("NI -43-101") are not
applicable to the scientific and technical disclosure in the Study. Any references to Scop ing Study or Feasibility Study by Euro Manganese in
relation to the Bécancour Plant are not the same as terms defined by the CIM Definition Standards and used in NI 43 -101.
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Demonstration Plant and its operation, and acquisitions of certain land parcels. It is also expected to
fund initiation of the FEED phase of the EPCM contract, certain site preparation works, and for general
and administration expenses for more than 12 months.
Funding to progress the Company's North American strategy, including the Bécancour Plant feasibility
study, is expected to be provided by the Company’s current cash and cash equivalents and future
equity raises, and funding by strategic industry investors and government programs.
Dr. Matthew James, President & CEO of Euro Manganese, commented:
“We continued to deliver to plan in 2023 and achieved several key milestones during and subsequent to
the fourth fiscal and calendar quarter . Our Team successfully produc ed on-spec HPMSM from our
Demonstration Plant, advanced ESIA permitting, and completed a significant land-lease agreement, which
provides us with access to approximately 60% of the Project’s manganese Reserve s and overall, secures
land access to roughly 85% of Reserves. Outstanding land rezoning requirements were also completed.
The Chvaletice Project received high-level inter-governmental support during the fourth calendar quarter
by being named as a project under the Minerals Security Partnership. We aim to leverage opportunities to
meet with private sector financiers partnering with the MSP as we advance with Project financing.
We were very pleased to announce the non -dilutive US$100 million funding package with Orion in late
November. The proceeds from the initial US$20 million tranche allow us to further advance the Project,
particularly completing permitting, initiating the FEED phase of the EPCM contract, and commissioning of
the Demonstration Plant . We remain focused o n delivering on these items, in addition to continuing
negotiations with potential customers to enter offtake contracts and initiating the project finance debt
process.
I am proud of the ongoing commitment of our Team to advance the Chvaletice Project and look forward
to continued delivery of key catalysts in 2024 and beyond. Together, we are moving closer to our vision of
being a leading and environmentally responsible producer of high-purity manganese.”
Q4 and Year-End 2023 Conference Call Details
Euro Manganese will host two separate Fourth Quarter and Year -End 2023 conference calls to serve
stakeholders in their respective time zones. Content of both calls will be the same. Replays and transcripts
of both calls will be available on Euro Manganese’s website: www.mn25.ca
CALL #1 – For North American and UK/European Audiences
North America UK/Europe
Date Tuesday, January 9, 2024 Tuesday, January 9, 2024
Time 8:30am PST | 11:30am EST 4:30pm GMT | 5:30pm CET
Registration: https://us06web.zoom.us/webinar/register/WN_AfPAHSfXRHaM1Qp3KlXOMg
CALL #2 – For Australian and North American Audiences
Australia North America
Date Wednesday, January 10, 2024 Tuesday, January 9, 2024
Time 9:00am AEDT | 6:00am AWST 2:00pm PST | 5:00pm EST
Registration: https://us06web.zoom.us/webinar/register/WN_mu69TZNYQBqyXrI_1oBGEw
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About Euro Manganese Inc.
Euro Manganese is a battery materials company focused on becoming a leading producer of high-purity
manganese for the electric vehicle industry. The Company is advancing development of the Chvaletice
Manganese Project in the Czech Republic and exploring an early -stage opportunity to produce battery -
grade manganese products in Bécancour, Québec.
The Chvaletice Project is a unique waste -to-value recycling and remediation opportunity involving
reprocessing old tailings from a decommissioned mine. It is also the only sizable resource of manganese
in the European Union, strategically positioning the Company to provide battery supply chains with critical
raw materials to support the global shift to a circular, low-carbon economy.
Euro Manganese is dual listed on the TSX.V and the ASX, and is also traded on the OTCQX.
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 t he ASX accepts responsibility for the adequacy or accuracy of t his
release.
Inquiries
Dr. Matthew James Louise Burgess
President & CEO Senior Director, Investor Relations & Communications
[email protected] [email protected]
+1 (604) 312-7546
Company Address
#709 -700 West Pender Street
Vancouver, British Columbia, Canada, V6C 1G8 www.mn25.ca
Forward-Looking Statements
Certain statements in this news release constitute “forward-looking statements” or “forward-looking information”
within the meaning of applicable securities laws. Such statements and information involve known and unknown
risks, uncertainties and other factors that may cause the actual results, performance or achievements of the
Company, its Chvaletice mineral project, its proposed Bécancour Plant or industry results, to be materially different
from any future results, performance or achievements expressed or implied by such forward-looking statements or
information. Such statements can be identified by the use of words such as “may”, “would”, “could”, “will”, “intend”,
“expect”, “believ e”, “plan”, “anticipate”, “estimate”, “scheduled”, “forecast”, “predict” and other similar
terminology, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken,
occur or be achieved.
Regarding the Chvaletice Project, forward -looking information or statements include, but are not limited to,
statements regarding the ability of the Company to deliver on samples meeting specifications to potential customers
from the demonstration plant, t he timing for FEED under the EPCM contract, final investment decision, ESIA
approval and other various regulatory approvals, statements regarding the ability of the Company to obtain
remaining surface rights and various permits, the benefits of remediating the historic tailings areas, statements
regarding the expectation of the Company that the net proceeds from the first tranche of the Convertible Loan
Facility will be sufficient funding to complete the permitting of the Chvaletice mineral project, complete the
commissioning of the demonstration plant and its operation, initiation of FEED, complete the acquisition of certain
land parcels needed for the Project, and certain site preparation works, and for general and administration expenses
for more than 12 months; the growth and development of the high purity manganese products market, the
desirability of the Company’s products, the ability of the Company to enter into binding offtake agreements with
potential customers on favorable terms or at all, the growth of the EV industry, the use of manganese in batteries,
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the manganese project supply line, support from European financial institutions and any government funding, any
anticipated benefits from legislation and the Company’s ability to obtain financing.
Regarding the Bécancour Plant, forward-looking statements include, but are not limited to, statements concerning
the Company’s plans for advancing the Bécancour Plant and results of the Scoping Study including estimates of
internal rates of return, net present values, and estimates of costs. Such forward-looking information or statements
also include, but are not limited to, statements regarding the timing for completion of the Bécancour feasibility
study, the Company’s ability to reach a definitive agreement with MMC to supply feedstock, the Company’s ability
to operate the Bécancour Plant and associated production , the projected growth of the North American demand
for high-purity manganese products, any benefits of legislation, the Company’s ability to secure offtake from North
American customers, the Company’s ability to raise the necessary financing, and the timing of any permit application
submissions and approvals and continuing successful cooperation with the W8banaki Nation.
Readers are cautioned not to place undue reliance on forward-looking information or statements. Forward-looking
statements are subject to a number of risks and uncertainties that may cause the actual results of the Company to
differ materially from those discussed in the forward-looking statements and, even if such actual results are realized
or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on,
the Company.
Factors that could cause actual results or events to differ materially from current expectations include, among other
things for the Chvaletice Project, lack of sufficient funding; the ability to develop adequate processing capacity and
production; the availability of equipment, facilities, and suppliers necessary to complete development; the cost of
consumables and extraction and processing equipment; risks and uncertainties related to the ability to obtain,
amend, or maintain necessary licenses, or permit s, risks related to acquisition of surface rights; the potential for
unknown or unexpected events to cause contractual conditions to not be satisfied; the failure of parties to contract
with the Company to perform as agreed; risks and uncertainties related to the accuracy of mineral resource and
reserve estimates, variations in rates of recovery and extraction, the price of HPEMM and HPMSM, power supply
sources and price, reagent supply resources and prices, future cash flow, total costs of production, and diminishing
quantities or grades of mineral resources and reserves; the inability to secure sufficient offtake agreements; the
inability to meet conditions under the Company’s secured credit facility and risks related to granting security; a delay
or inability to get the ESIA approved by relevant authorities; unexpected results or unsuccessful completion of the
various stages of the EPCM contract; and changes in project parameters as plans continue to be refined. For the
Bécancour Plant, factors include, among other things: assumptions in the scoping study not proving accurate over
time and negatively affecting results; an inability to obtain financing, unanticipated operational difficulties including
failure of the Bécancour Plant; cost escalation for reage nts, labour, power and other cost increases; inability to
secure key reagents; a delay or inability to obtain or maintain necessary licenses or permits; the potential for
unknown or unexpected events to cause contractual conditions to not be satisfied; inability to complete feasibility
study or other technical studies or unexpected results; and risks and uncertainties related to limited feedstock supply
options.
Additional factors that could cause results or events to differ materially from current expectations include risks
related to global epidemics or pandemics and other health crises; availability and productivity of skilled labour; risks
and uncertainties related to interruptions in production; unforeseen technological and engineering problems; the
adequacy of infrastructure; social unrest or war; the possibility that future results will not be consistent with the
Company's expectations; increase in competition, developments in EV battery markets and chemistries; risks related
to fluctuations in currency exchange rates, changes in laws or regulations; and regulation by various governmental
agencies and changes or deterioration in general economic conditions. For a further discussion of risks relevant to
the Company, see "Risk Factors" in the Company's annual information form for the year ended September 30, 2023,
available on the Company's SEDAR+ profile at www.sedarplus.ca.
All forward-looking statements are made based on the Company's current beliefs as well as various assumptions
made by the Company and information currently available to the Company. In general, these include that the
Company can achieve its goals; that the political and community environment in which the Company operates in will
continue to support its projects; the Company can meet its obligations under the Convertible Loan Facility and secure
additional financing, and assumptions related to the factors set out herein.
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Although the forward-looking statements contained in this news release are based upon what management of the
Company believes are reasonable assumptions, the Company cannot assure investors that actual results will be
consistent with these forward-looking statements. These forward-looking statements are made as of the date of this
news release and are expressly qualified in their entirety by this cautionary statement. Subject to applicable
securities laws, the Company does not assume any obligation to update or revise the forward -looking statements
contained herein to reflect events or circumstances occurring after the date of this news release.