[Ferro-Alloys.com] Element 25 Limited (E25 or the Company) (ASX: E25; OTCQX: ELMTF) is pleased to announce it has been formally awarded and the Grant Agreement has been signed for US$166 million (A$268 million)1 in grant funding from the U.S. Department of Energy (DoE) under the Battery Materials Processing Grant Programme. This landmark funding will support the construction of its proposed battery-grade high-purity manganese sulphate monohydrate (HPMSM) facility in Louisiana, USA (Facility), which will bring domestic production of a key critical battery raw material to the USA. The grant award is in addition to the US$115 million (A$185 million) already committed by offtake partners General Motors LLC (GM) and Stellantis N.V. (Stellantis).

 HIGHLIGHTS:

• E25’s planned HPMSM facility in Louisiana awarded US$166 million (A$268 million) grant from the U.S. DoE.

• E25 and DoE have signed the DOE grant agreement and grant funding has been formally awarded.

• Project commencement date under the grant contract is 1 April 2025, with work able to commence up to 90 days prior.

• Grant is in addition to US$115 million (A$185 million) in project funding secured from GM and Stellantis2.

The grant application was submitted under the DoE’s Battery Materials Processing Grant Programme of the Office of Manufacturing and Energy Supply Chains, which is funded by the Bipartisan Infrastructure Law. The program is designed to provide grants for battery materials processing to ensure that the United States has a viable battery materials processing industry. The grant forms a key element of E25’s financing strategy for the Facility, and the project execution team will now work to finalise the project implementation schedule.

E25 plans to produce HPMSM from manganese ore sourced from its Butcherbird mine in Western Australia and shipped to Louisiana. It has developed an innovative, advanced processing flowsheet to convert Butcherbird manganese concentrate into HPMSM, a critical raw material for the manufacture of lithium-ion batteries. The proprietary flowsheet reduces energy consumption, virtually eliminates waste and delivers the lowest reported carbon intensity HPMSM globally.

Element 25 Managing Director Justin Brown said: “This grant from the U.S. Department of Energy, represents a major milestone in our development of the Louisiana HPMSM Project and adds to the commitments already received from GM and Stellantis which include both offtake and financing agreements in support of the refinery. The grant will fund up to half of the construction capital costs for the project and when combined with existing commitments, will propel the project towards financial close and commencement of construction, creating long-term jobs for Louisiana and delivering ethically sourced, IRA compliant HPMSM to our customers.”

E25’s process offers a pathway to the delivery of expanding volumes of ethically sourced, traceable, transparent HPMSM supply to US markets. E25 plans to produce up to 135Kt per annum of HPMSM (65Kt per annum per processing train) for US electric vehicle (EV) supply chains3 in a facility that is a first-of-its-kind processing facility in Louisiana.

The grant comprises a total of US$166,128,094 in grant funding, broken into five budget periods, each relating to a staged phase of project execution. The structure of the grant is based on matching funding (cost-share) being provided by the Company for a total of US$166,128,095 in cost-share. The grant agreement outlines the tasks and milestones required for each budget period with associated reporting and approval requirements.

Grant funding is made available during each budget period in accordance with the approved budget items and the terms and conditions of the grant award. The budget periods, milestones and stage gates have been agreed between the DoE contracts team and the Company as part of the grant negotiation and award process subsequent to the announcement that the project had been selected for the grant award.

COMMUNITY BENEFITS PLAN

The proposed Facility is supported by local communities, stakeholders, and the State of Louisiana, which has approved a substantial incentives package to support the project5, in acknowledgement of its significant local benefits. The Company is committed to supporting the local economy during and after the construction of the Facility, including a desire to recruit workers from the oil and gas industry and a recently closed refinery that can potentially provide a skilled workforce to the Facility. The Company intends to prioritise local workforce recruitment, including training programmes and engaging with local suppliers. The project is expected to create 400 jobs during construction and 144 full-time ongoing roles once production commences.

PROJECT FINANCING STRATEGY

In 2023, E25 secured a US$85 million loan under an agreement with GM, whereby E25 will, in turn, supply up to 32,500 metric tons of manganese sulphate annually for GM’s Ultium battery plant requirements, which added to the commitments from Stellantis that include take-or-pay offtake commitments for 45ktpa of HPMSM over five years and U$30 million of project funding6. The two transactions, combined with the grant award, total U$281M in financing support for the project, with only minor additional funding now required to complete the project financing structure. E25 has been co-ordinating a process to secure the balance of funding for the project’s construction costs, which were estimated in the Company’s April 2023 Feasibility Study at US$289 million.

ABOUT THE E25 HPMSM LOUISIANA PROJECT

Element 25 (Louisiana) LLC (Element 25 (Louisiana) / E25 LA) plans to build and operate a first-of-its-kind, environmentally sustainable refining facility in the Baton Rouge area, Louisiana, to produce HPMSM, a critical raw material in lithium-ion batteries.

E25 LA plans to construct a 230,000 square-foot (~21,000m2) HPMSM refining facility that will employ an innovative process to produce approximately 71,650 tons (65,000 metric tonnes) of HPMSM annually from the first processing train using manganese ore sourced from Element 25’s Butcherbird manganese mine in Western Australia (Project).

It will be one of the first commercial facilities to produce HPMSM in the U.S., reducing current dependency on Chinese sources. The Facility will create hundreds of highly-skilled, construction and permanent jobs for Louisianans. E25 LA has secured offtake and funding agreements, including five and seven-year supply agreements with global automakers Stellantis and GM7 and has now secured $166M in grant funding from the US Department of Energy8.

Element 25 (Louisiana) controls all intellectual property to develop and operate the HPMSM facility. It also has developed a proprietary process to remove solid waste residue as byproducts, which each have industrial applications, thus eliminating the need for a solid waste landform.

Element 25’s efficient process permits a mine-to-market carbon footprint that is approximately 67% lower than competitors in China9. The proposed site is located in the Baton Rouge area, and is proximal to raw materials suppliers, abundant utilities, and infrastructure, including ports and roads, which also boosts the Project’s viability and bolsters the local economy surrounding the facility. Project commissioning and development will be supported by multiple U.S.-based companies, including those based in Louisiana.

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• [Editor:tianyawei]