Feasibility Study Confirms Potential for Low-Cost, High-Purity Manganese Production

Firebird Metals Limited (ASX: FRB, “Firebird” or “the Company”) is pleased to announce excellent results from the Company’s Battery Grade Manganese Sulphate Feasibility Study (“Feasibility Study” or “Study”) for stage one of production in China, which will utilise third party manganese ore to produce high-purity manganese sulphate.

HIGHLIGHTS

CHINA-BASED HIGH-PURITY MANGANESE PROJECT FEASIBILITY STUDY RESULTS

• Study results demonstrate the opportunity for Firebird to become a low-cost producer of high-purity manganese sulphate
• Significant cost, development and operational advantages gained by building a plant and establishing operations in China
• Feasibility Study incorporated conservative cost estimates and the lowest selling sulphate price compared with peers
• Key results include:
  • Projected CAPEX of US$ 83.5 million – refer to pages 14, 15 and 17 of the Feasibility Study
  • Projected Working Capital of US$ 10.6 million – refer to pages 14 and 15 of the Feasibility Study
  • Chinese circular industry and plant location within the Jinshi High-Tech Industrial Park provides localised key reagents and inputs that drive a low OPEX of approximately US$609/mt for production of battery grade manganese sulphate
  • Plant Capacity for Battery Grade Manganese Sulphate (MnSO4) of 50kt/a & Manganese Tetra Oxide (Mn3O4) 10kt/or equivalent MnSO4 of 72.5kt/a
• Firebird aims to become a low-cost producer of battery grade high-purity manganese at a time when the Lithium Manganese Iron Phosphate (LMFP) battery market is forecast to experience significant growth in coming years

DEVELOPMENT PROGRESS UPDATE

• Strong progress and support from the Jinshi Government and tier-one banks for the development and construction of the Company’s Battery-Grade Manganese Sulphate Plant
• Advanced discussions with Chinese Banks regarding attractive financing options, with the Company expecting to provide an update in the coming weeks
• Positive formal advice from Jinshi Government and relevant departments regarding the process to repatriate profits generated from operations
• European customer site visits and offtake discussions commenced with initial positive feedback
• Third party manganese ore offtake discussions for the Study progressing well
• Permitting and design completion expected by late Q3 2024
• Final Investment Decision expected in H2 2024, with a 12-15 month construction
• Flagship Oakover Project continues to be an integral part of Firebird’s long term manganese battery materials strategy and development at the site is ongoing

The Feasibility Study referred to in this announcement is a Technical Feasibility of the establishment of the Battery Grade Manganese Sulphate Project Stage 1 Processing Plant in China (the Plant).

The Feasibility Study is based on the material assumptions contained in the Feasibility Study document accompanying this announcement. These include assumptions about the availability of funding. While the Company considers all of the material assumptions to be based on reasonable grounds, there is no certainty that they will prove to be correct or that the range of outcomes indicated by the Feasibility Study will be achieved.

Investors should note that there is no certainty that the Company will be able to raise the amount of funding to develop the Plant when needed. It is also possible that such funding may only be available on terms that may be dilutive to or otherwise affect the value of Company’s existing shares.

It is also possible that the Company could pursue other ‘value realisation’ strategies such as a sale, partial sale or joint venture of the Plant. If it does, this could materially reduce the Company’s proportionate ownership of the Plant.

Given the uncertainties involved, investors should not make any investment decisions based solely on the results of the Feasibility Study.

The Company’s long-term strategy is to develop into a low-cost manganese producer and provide security of supply across both traditional outputs and new materials being used in fast-growing energy storage industries.

Completion of the Feasibility Study follows the announcement by Firebird in September 2023 of the Company’s China-based Lithium Manganese Iron Phosphate (“LMFP”) growth strategy, aimed at establishing the Company as a low-cost producer of battery-grade MnSO4 (high-purity manganese sulphate) and Mn3O4 (high purity manganese tetra oxide). Both products are key cathode materials in LMFP batteries for electric vehicles.

LMFP is considered a key future cathode for electric vehicle (“EV”) batteries and is a significant upgrade from the Lithium Iron Phosphate (LFP) cathode, which is currently he most popular EV battery cathode.

Adding high purity manganese sulphate (MnSO4) to LFP, creates LMFP, delivering significant operational and safety benefits to a battery, including:

• a higher thermal runaway temperature than nickel-based batteries
• costs approximately 30% lower than nickel-based batteries
• enhanced voltage platform and 15-20% increase in energy density

The Chinese chemical project design and engineering process differs from western processes.

A Feasibility Study is completed first and forms the basis of engineering design, government permitting and financing activities. The Feasibility Study contains a large portion of compliance and project economics assessment.

The Feasibility Study was completed by Hunan Chemical Engineering Design Institute Co., Ltd (“HCEDI”) and in line with stringent Chinese regulations. Importantly, HCDEI have completed several similar studies for the Chinese Manganese Sulphate industry.

HCEDI is the leading MnSO4 project design institute globally and Firebird’s in-country technical team have previously worked closely with HCEDI on several projects.

Results from the China-based high-purity manganese project Feasibility Study validates Firebird’s LMFP battery strategy to produce battery grade manganese sulphate in China.

These results have continued to build upon the solid platform for Firebird to successfully deliver on its vision to become a global leader in the manganese industry, combining mining and downstream processing with a dedication to the advancement of the Li-ion battery sector.

The company is working closely with HCEDI on preliminary plant design which is 50% complete. At the same time, equipment supplier engagement and due diligence of supplier’s manufacturing process and supplier’s customer experience are vital in the development and operational process in China. Through this process, the Company has identified that further efficiencies can be achieved and has applied for two patents on energy saving (calcining process & product drying), which will further improve the impressive economics of the Project.

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This article includes content from Firebird Metals Limited, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.