Australia's Element 25 said on Friday it had secured firm commitments for a A$10-million share placement to help fund an expansion of its Butcherbird manganese project in Western Australia and support working capital.

The company would issue 36.3-million new shares at A$0.28 each, a 16.4% discount to its last close. The placement is expected to settle September 18, with shares issued the following day, the Perth-based miner said in a statement.

The funding package comes after Element 25 won approval in June for a A$50-million senior debt facility from the Northern Australia Infrastructure Facility to support the Butcherbird expansion, known as BBX.

The project is designed to lift Butcherbird’s production to 1.1-million tons a year of manganese oxide concentrate. A feasibility study updated in January estimated a capital cost of A$64.8-million, with a pre-tax net present value of A$561-million and an internal rate of return of 96%. Butcherbird holds an ore reserve of 101-million tons grading 10.4% manganese.

“Funds raised under the placement will allow key orders to be placed for long-lead equipment items and will fund the acceleration of detailed engineering design activities to progress the project in line with the project plan,” MD Justin Brown said.

Element 25 plans to use feedstock from Butcherbird to supply a proposed high-purity manganese sulphate monohydrate (HPMSM) refinery in Louisiana, a first-of-its-kind US facility backed by General Motors Co., Stellantis and the US Department of Energy. The miner has already secured a $166-million US government grant and $115-million in support from its offtake partners.

The Louisiana plant is expected to produce up to 135 000 t/y of HPMSM for US electric vehicle supply chains, leveraging a proprietary flowsheet that the company says reduces energy use, virtually eliminates waste and delivers the lowest reported carbon intensity globally.

The push coincides with automakers’ interest in lithium-manganese-rich battery chemistries, which could increase manganese demand tenfold compared with high-nickel cells.

Element 25 said it continued to evaluate financing options for the balance of BBX funding, including royalty streams, offtake prepayments and subordinated debt.