Why the Element 25 (ASX:E25) share price will be in the spotlight today

The manganese producer is one to watch after some positive news. Here are the details.

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The Element 25 Ltd (ASX: E25) share price will be one to watch this morning. This follows the mineral exploration and mining company’s announcement of another positive update on its Butcherbird manganese project.

Just yesterday, Element 25 executed a Multi User Access Agreement with the Pilbara Port Authority.

At yesterday’s market close, Element 25 shares ended the day at $2.40 – closing in on their all-time high of $2.90.

What did Element 25 announce?

Element shares could be on the move today after investors digest the company’s latest news.

In a statement to the ASX, Element 25 advised it has sold the first parcel of its manganese product to OM Holdings Limited (ASX: OMH). This marks a significant milestone for Element 25 after it published the project’s pre-feasibility study in May 2020.

Under the offtake agreement, the company will supply material in contract specification of 30% to 35% of manganese concentrate.

As part of ramping up the company’s activities, the Butcherbird mine site has progressed to 24-hour processing. The increased production rate will facilitate the first shipment to OM Holdings, scheduled for June 2021.

Element 25 managing director Justin Brown commented:

Delivering the first material under the offtake agreement within 12 months of publishing the Pre-Feasibility Study is a testament to the hard work and dedication of the Project team. This is another important milestone for the Project and Company and we are excited to be heading for our first shipment of Butcherbird’s material to our offtake partners.

Powering ahead

In further news that could impact Element 25 shares, the company is focusing on the next stages of its Butcherbird project. A multi-stage development strategy is in the works which will see a stage 2 expansion of the concentrate business.

This will be followed by a stage 3 development to convert the concentrate material into high purity manganese sulphate monohydrate – a key ingredient for electric vehicle batteries.

How has the Element 25 share price been performing?

Over the past 12 months, Element 25 shares have accelerated by more than 500%, with year-to-date performance returning over 50%. The company’s share price reached an all-time high of $2.90 in late March before trending lower recently.

On valuation grounds, Element 25 commands a market capitalisation of around $357 million, with approximately 148 million shares on issue.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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