Element 25: Australia’s Next Manganese Producer

0:12 Hi, my name is Bianca Vichola. I'm the COO of 6 and welcome to Element25's Live Investor Summit. I'd like to start today by introducing our presenter, Justin Brown, Managing Director of Element 25. To kick things off, Justin will be telling the company story and then we'll be accepting questions. You can submit your questions in the Q&A panel on the right hand side of your screen. Without further ado, take it away, Justin. Thanks, Bianca, and thanks to all of you for joining us as I walk you through what I think is an exciting, emerging story in Western Australia. And I'll obviously walk you through a little bit of the past of the company, but more importantly focusing on the future. If you look at the state of play at Element 25, we're still sort of small cap ASX listed company.

1:01 We have recently enjoyed some strong share price appreciation due to the release of our pre-feasibility study, which I think the market got pretty excited about. So we're currently sitting at just under 40 million market capitalisation. Everything will be in Australian dollars that I tell you today. We've got a very experienced executive team. All of the guys that have been helping to push this project towards development have a lot of experience in the mining sector and will handle marketing and mineral processing, accounting, legal, geology. So you've got well over 100 years of combined experience guiding the direction the company's taking. And I think hopefully at the end of this presentation, you'll agree that that's a pretty exciting direction that we're going down. The, I guess The E25 story is focused on the Butcherboot Manganese resource, which is a world-class, huge resource located in Western Australia.

1:55 We have recently released a study which shows a very low capital cost pathway to developing this And I guess one of the key points about this project is once it gets up and running, it'll be there for a very long time because it truly is a massive resource. A little bit of background about manganese. Not everybody knows the manganese space, but it's the fourth largest traded metal. And the reason for that is because it's an essential input into steel. And more importantly, or more recently, batteries. So there's kind of a traditional high volume use in steels and various alloys. And then there's a new emerging market for lithium ion batteries. The batteries that go into most EVs are what's called NMC batteries and that the M stands for manganese. So that's kind of a growth market that's becoming more and more important.

2:41 And there's no substitute for manganese. So you're gonna see continued growth in demand for this metal. And I think the market fundamentals are pretty bullish. So what is Butchford? So Butchford is located about 130 kilometres south of a big mining town of Newman in Western Australia. It's basically the host's a 260 million tonne manganese resource. We've just published the made and proved and probable reserves of 50 million tonnes out of that global resource. It's 100% owned by element 25. And As most of you would be aware, WA is a well-recognised mining jurisdiction and has a very clear pathway to permitting for new projects. It is in fact ranked number 1 as the mining investment jurisdiction by the most recently released Fraser Institute report.

3:30 And this thing's got a very long wildlife. So the study that I'm gonna present to you today looks out for 42 years, but only utilises about 20% of the global resource. So you can probably appreciate the size of the project that we're talking about here. If you take a bird's eye view, the slide that you're seeing now is focusing in on the mining lease application area. It's the area which will be the target of that 42 years of production. The different colours you can see outline the middle resources and the various categories that we've drilled to various densities, the measured, indicated and inferred. Measured is obviously the highest confidence level for a resource and inferred is the lowest. So what we've done is drill out to a much higher drilling density, the red and the orange areas to give the maximum confidence in the resource in those areas, which is where we're going to start mining.

4:22 Importantly, you can see the blue and yellow lines are the Great Northern Highway and the Goldfields Gas Pipeline respectively. So from an infrastructure point of view, one of the things that is often a problem in Western Australia is the tyranny of distance. So it's a very big state. And often these resource projects can be located well away from infrastructure. We don't have that issue. So we can build a 1 kilometre access road and we're straight onto the Great Northern Highway. So from a logistics point of view, it's a fantastic location to be in. If you look at a cross-section, those of you who are geologically minded will understand by that slide that it's incredibly simple. So this is a very flat line outcropping ore body. So what that means is we start mining from surface and we're straight into ore. So we don't have to do a big pre-strip. And in fact, the life of mine pre-strip is about, life of mine strip ratio is about 0.3 to 1 which is phenomenally low. So we're basically straight into ore. There's no drilling and blasting required.

5:23 Most mines have to blast the ore before they can mine it. We don't have to do that. We can just free dig it and we don't mine below the water table for about 30 years. So most mines have dewatering bores and they have to maintain the water table levels below the mining zones. And we don't need to worry about that for at least 30 years in the mine life. So we discovered this project, I guess, in 2009, just by way of a bit of background. We've drilled it out, recognized the size and scale of this project for a few years. The question is, how do we commercialize it? And The last couple of years, we actually worked on a pretty sort of promising hydrometallurgical leach flow sheet, which was going to produce high purity manganese, including manganese metal and manganese sulphate for lithium ion batteries.

6:16 The challenge with that is that it's quite a high capex solution. And so this year and late last year, we've been looking for alternative ways to generate cashflow from this ore body without the capital intensive development required by the previous plan that most of you will be familiar with. And what we found was that we can, in fact, we've got very low mining costs because we don't need to drill and blast, we're just free dig. We then can, by way of simple screening, wet scrubbing and optical ore sorting, generate a 30 plus percent manganese concentrate, which then can be sold into the manganese alloy markets. And I guess the key there is that it's a simple process, it's a low capital process, and it has a short development timeline. So the strategy now is to get into positive cash flow as quickly as we can with minimal capital and then grow the business from there and then look at the more capital intensive, larger scale development opportunities that we have in front of us.

7:13 That's the slide you see now, it's just a simple schematic of the flow sheet but those of you who follow mining will recognise that most of the things in there are very run-of-the-mill. We can free dig and use loaders to load a crusher, screening and then wet attrition scrubbing followed by size fraction separation and then optical ore sorting. And that gives us a concentrate composition that you can see in the table there of about 33% manganese. Very low levels of deleterious elements which is important when you're selling the concentrate into the alloys markets. There are certain impurities such as phosphorus that are detrimental to steelmaking. We have very low levels, so it's quite a favourable composition for sale into that space. We also have 1 or 2 unique sort of attributes that we think can attract or potentially attract premium interest from premium markets. We're exploring that at the moment. So the base case you see doesn't allow for any of those potential premiums, but we're pursuing some upside on some of those things.

8:17 And I guess what we did, once we sort of cracked the flow sheet, which was just by way of background, a result of about 40 tonne bulk sampling exercise we did last year, which was the material we then used for the metallurgical testing or the beneficiation testing. It became clear that we can produce a commercial concentrate grade and composition. And so then we undertook an exercise of commercial analysis and that involved obviously looking at the capital cost and the operating cost intensity of getting this business up and running. And the numbers were quite staggering. So we came out with a pre-feasibility level study. In fact, I would call it a pre-feasibility level plus study because it was quite detailed with a real NPV of around $280 billion and outstanding IRRs of 223% with a six-month payback. And if you look at most mining projects going around, that's about as good as it gets. And so we were pretty excited, and that's why we've pushed the button on a very accelerated development timeline.

9:15 The assumptions that went into that were, we think, relatively conservative. And in fact, for example, the price assumptions we used for manganese concentrate are well below current spot levels. And I'll show you a couple of slides shortly that should reinforce that. And the cash it generates is gonna be really important in further growing the company. We throw off about $30 million in cash per year over that 42 year mine life. And importantly, the capital cost is really modest. It's about $15 million. On top of that, we've probably got about $9 million in working capital. And so the financing is a modest 25 or so million bucks. Obviously that needs to be refined slightly in the more detailed study, but it's a very achievable hurdle for a small cap company to take on.

10:07 So I guess it's important to understand what the sensitivities are when you look at these things. And in fact, when you plot some of the key variables, you can see that this project is very robust, even with significant reductions in the 3 key sensitivities of product, grade, exchange rate, and manganese price. We still do very well from an NPV point of view. And so this project should be able to ride out most of the bumps in the manganese sector and any operational problems we may have in the early stages of development. So we mine this material, we do the simple processing and obviously we then need to get it to market. And that's simply by way of road haulage to Port Hedland. Port Hedland is a very well-established bulk handling port in the northern part of the state. And it has a facility called Utah Point, which is a multi-user facility dedicated to the export of bulk ores. And it's been used for manganese before, it's used for iron ore and it has availability for the material that we need to ship out.

11:07 And so that's a pretty established logistics pathway to get this onto the ship and get it to markets in Malaysia and other Southeast Asian ports. So having established the pretty simple low-cap-ex solution that we see, we've plotted out a pretty aggressive development timeline and that takes us to first production in Q1 2021. The reason we can do that is because we've actually done most of the baseline environmental stuff that we need to do. There's one small survey remaining, which will happen in the next month or 2. Detailed engineering is well underway, but as you've seen from the simple flow sheet, there's not that much detail to go into it because most of this stuff will be skid mounted or track mounted mobile kit and there'll be very limited civil work. So my project lead has said to me he doesn't want to pour 1 cube of concrete if he can avoid it and that gives you a sense of how we're approaching this.

12:01 We're going to keep it very lean, low cost and fast and nimble. So mobile off the shelf kit, nothing, very little in the way of fabrication required. All the baseline work on the approval is done. So that should go through a pretty simple process without EPA referral. And we're already advancing our project financing strategy, which is obviously key to getting this thing going. So all those threads will work in parallel. We're looking for equipment delivery, commencement of construction in Q4 of this year, followed by a relatively short commissioning time frame of about 6 weeks, and then commercial beneficial operation Q1 in 2021. So for investors who maybe used to, I guess they call it the dead period when companies announce the PFS and they expect 2 years for DFS and construction and financing.

12:53 We're going to contract that significantly. And for those who invest, you're not going to have to wait too long for A, key milestones and B, positive cash flow. And we go as we transition from explorer if you like to developer and then producer. And probably shortly after that you'll hear talk of expansion too because as I said this current plan is modestly sized at about 350,000 tonnes per annum of concentrate which is not a big development and it barely touches the sides with respect to the size of the global resource. So there's obviously a very clear opportunity in perhaps year 2 or perhaps shortly after to double or even treble the size of the production without impacting significantly on the global resource. So zooming in a little bit on manganese, it's, as I indicated earlier, it's primarily a steel input and as steel consumption continues to grow, so does manganese.

13:48 It's manganese goes into a number of alloys, including what they call silica manganese and various varieties of ferromanganese. And a part of it goes into manganese metal. You can see those categories down the bottom of the chart. All of them are growing, but the most important one is silica manganese is the highest growth segment. And that's the segment that our product is likely to go into. So that bodes very well for demand for the type of ore that we're intending or the type of concentrate we intend to produce. And there's no sign of that abating. So we expect that growth to continue. Supply in the manganese world is more challenging. Traditionally, China produced a lot of domestic manganese ore. That is in severe decline and their demand for imported ore increases every year.

14:35 South Africa is one of the main sources, West Africa, Brazil and the Ukraine area are other sources but all of those have supply challenges. So they're a long way from the primary consumer in China, and B, they all have their own logistics challenges domestically. So demand is increasing. The increase in supply is more challenging. We're obviously a lot closer to the marketplace than most of the others. The other competing mines in Australia are for the most part in decline. So Grid Island only has a few years of reserves left. Budu Creek's production profile is dropping. And Woody Woody is getting deeper and more expensive. So we think we are well placed to fill the gap in supply. And I think the overall supply demand fundamentals for manganese are looking pretty bullish in coming years.

15:25 This is a historical price chart for manganese. You can see on there that it's volatile, and that's always tended to be the case, but the overall long-term average pricing is around our price assumptions or a bit higher. But importantly on that slide, the green dashed line is our all-in sustaining costs. So if you sort of extrapolate that along that chart, you'll see that the only time we would not make money in that chart is for a brief period in 2016. So the price is likely to bounce around, but we're very well placed on the cost curve to ride out any bumps. And in fact, when the prices are in the zones they are now, as you can see from the red X, we stand to make a lot more money than is outlined in the pre-feasibility study. So I think there's upside in our study, if you look at that chart.

16:18 Just to reinforce the supply demand fundamentals, there's a recently released Macquarie report and the title is Manganese Ore Stronger for Longer, just released this month. It's available for those out there who have access to Macquarie reports. It paints a pretty bullish picture and we agree with that. The analysis we had from Roskill supports that and we think our PFS has got some significant upside as things play out in coming years. So I guess where to from here?

16:50 So we have a pretty clear path. We have just completed the pre-feasibility study. We're working hard on the permitting and project financing. We just outlined that roadmap that we have, Q1 production next year. Obviously to do that, we've got to get the permitting, the financing and the detailed design done, which is all well underway. We expect to commence that part of the business pretty aggressively and generate strong cash flows. But then we have a number of options in front of us. So we have the opportunity to refocus on, or at least in parallel focus on the larger, more capital intensive electrolytic manganese metal project that you guys would have read about in the past months for those that have followed the company.

17:36 We think this ore export business will put us in at the top of the bottom third of the cost curve. The EMM business will put us, we firmly believe at the bottom of the cost curve, well below existing cost of production, which is a great place to be, but we also have the opportunity to potentially expand the concentrate business. And so there's gonna be some optionality there, and we wanna become a

17:57 environmentally friendly, ethical manganese source. The world's looking for resources from well-regulated jurisdictions like Western Australia. I've had people say to me they'd much prefer to source supply in Australia than say many African countries. And we think we can grow into the growing demand and become a significant global manganese producer. And the ethical and sustainable production that we can do here in Australia, I think is gonna be quite attractive to the world going forward, and also importantly generate strong and sustainable returns for investors. So, I guess setting the scene for the project, I think it has a lot of attributes that make it quite attractive. Its location in the West Australian jurisdiction, established infrastructure, low cost operations.

18:43 We've got our permitting, native title agreements pretty well done, native title is done, permitting is getting close to finished, Very simple process to get into cashflow. So technical risk is low, geological risk is low. And we think the supply demand fundamentals are favourable going forward. And the large resource means that we can just keep growing this thing. It's this current 42 year mine, we only consume about 20% of the global resource. The

19:07 resource is not closed off. We can drill more if we need to. And so there's a very, there's potential for a very strong growth profile in coming years. Just to set the scene, some of you are probably from WA, but many may not be. This is what the project, lay of the land, looks like. It's broad, flat, wide open spaces. We're not near any towns. We're not going to upset anyone by starting this operation. It's a pretty low impact above the water table, low strip. It won't generate a lot of waste. So I think it ticks a lot of boxes in that regard. There's a drill rig drilling out the resource, for those of you that aren't familiar with how we do that. And this is a photo of the digger that we had up there in December last year, which was extracting about 40 tonnes of bulk sampling material in 6 pits going down to about 7 metres from surface.

20:00 And that's the material that was the basis for our beneficiation test work that has taken up the best part of the first quarter of this calendar year and gave us such favourable results that allowed us to push the button on the development of the project. So thank you. So that leaves now, I think time for Q and A, I'll hand it back to Bianca to sort of run us through that, but thank you for listening. And I hope you found it interesting. I hope we get some good questions. Thank you, Justin. Yes, so now's the time for investor questions. As a reminder, you can submit your questions using the Q&A column on the right-hand side of your screen. To kick things off, we had some questions submitted in advance. The first one here, Are you still planning to release the 2nd PFS for EMM this quarter or next quarter?

20:52 Yeah, so the timing of the EMM PFS is well advanced. We do need to do a little more metallurgical test work. The current focus is gonna be on the ore concentrate export business. So I'm not gonna give viewers an actual time for that PFS release, but we have not forgotten about it. It is well advanced. There is a bit more work, which is gonna require obviously a budget. Our preference at the moment is to divert financial resources to getting the All Concentrate business up and running. When we can, we will resume work on that stream, but it's not priority 1 at the moment. Second question here, what can shareholders expect in ways of the order for the next few catalyst events?

21:38 Yeah, so as I said, we have a native title agreements in place, we have a access agreement with 1 of 2 past release holders that cover the area that we're aiming to start production in. We have one more to close out. We're very close to that. That'll allow the mining list to be granted, which opens the door for approvals to be submitted. We expect that imminently. And in terms of work on the ground, we have a water bore rig mobilising next week, which will do the test bores to allow us to pump test the aquifer to confirm water supply. We've got a small Stagaforna environmental survey to do on the ball field area. And obviously you're gonna hear more about the progress on financing. We've got good discussions going with various lenders and people who specialise in the equity space.

22:28 You would have seen the recent announcement about the acuity capital and the sell down of the RAREX position. There's more coming in that vein. And so watch that space. And then I guess on the detailed engineering, you'll see that progressing with various announcements going forward at the offtake, which is important to underpin financing. We're in discussions with a number of trading houses, Chinese and non-Chinese. You should see progress on that. MOUs progressing to formal offtake agreements in coming months. So I think you'll see it jam-packed with news and we're trying to get this done really quickly by regular standards and so I don't think there's going to be too many quiet periods. Great.

23:14 Question here from Lian Ding. He says, how does your project compare to existing manganese producers in South Africa like Jupiter mines? Yeah, good question. So Jupiter is one of the major South African producers. They produce from the Kalahari Basin in South Africa. Kalahari Basin is the largest manganese resource base globally and is responsible for about half of the seaboard manganese ore. The typical product that they ship out these days is about a 36 or 37% manganese product. It's either a semi-carbonate or an oxide ore. They ship it, they have to travel about 1000 kilometres to the ports in South Africa and then they have to ship it pretty much halfway around the world to get it to the main consumers in China.

24:03 I guess by comparison, we give up a little bit on grade at 33%, but we think our mechanical and chemical properties of our ore are either as good or better than the South African ores. And quite importantly, we're a lot closer to the end users. So obviously, from us, where we are in Port Hedland to either China or perhaps Malaysia or Vietnam, there's a much shorter shipping distance. So that gives us an advantage on logistics costs. But yeah, I think we can compete. I mean, cost wise, we're probably on par, close to close to the cost of production of the Jupiter mines to shipping project. Great. A simple straight to the 0.1. Hi, Justin, what is your main concern at this point?

24:49 Yeah look I think we've painted a pretty aggressive development timeline. We need to make sure everything happens the way it needs to happen. We've got some long lead time items that we need to put down payments on So some of these things permitting the critical paths will kind of chop and change as we hit our goals. But in order for us to get to that Q1 production, we need to make sure everything goes right.

25:12 I don't think that anything else is, I don't think anything's going to stop us. I think it's just a case of executing well. Transitioning company from an explorer to a producer has a lot of challenges, and we need to get the right people on the right jobs. But I think we can. Brenton Winter wants to know what will finance be made of, debt slash equity? Yes, I think in the model that we have for PFS, it's a pretty traditional 60-40 debt equity split. We're in discussions with lenders. The cash that the project generates should make that quite doable. Equity is likely to be a combination of shareholder participation, potentially through an SPP or rights issue.

26:01 Also may include equity investment from offtake partners, but also may include traditional main street equity through the brokers. Debt, we're talking to the North Australia Infrastructure Facility, we're talking to various sort of lenders like funds, I guess, Taurus, Orion, RCF. The mix is still fluid, but it's most likely going to be about a 60-40 debt equity split. Great. Leigh-Anne and Ding have another question here. What sort of CAPEX will be required to produce EMM? I can't give you a number on that, but EMM is not a, it's a chemical plant. So you need to basically build a hydrometallurgical plant with an electrowitting cell house. So it'll be, you know, in the hundreds of millions, it's not gonna be in the tens of millions, but we won't have a firm number until we complete that PFS.

26:57 Phil Vivian wants to know, does road haulage create any constraints on maximum annual production of concentrate? Not at the level that we're looking at. You know, we, there are examples in Western Australia of road hauled ore businesses up to, you know, several million tonnes, Atlas Iron being 1 recent example, the Woody Woody Mine hauls by road. There's no short term constraints as we double, treble, quadruple production over coming years. Another question from Phil here, Do you believe the company faces any takeover risk given or depletion elsewhere in Australia? Yeah, good question. I mean, I'm open to it as long as the price is 2 or 3 bucks. I'd hate to think that we would lose control of the asset at these levels. Obviously that's gonna be ultimately if that comes, it's gonna be up to the shareholders to decide what that price needs to be. Look, I think our asset will be attractive. I think when we get into production, I mean, the scale of it means that it could quite easily go to 1 or 2 million tonnes of production over time.

28:03 I think that will be attractive to certain people. You know, what they're thinking, I can't tell you, but as I said, if they wanna try and take over the asset, I hope we can get a good price for shelters. In so far as the capital costs, Leanne asks, with such a low, modest capital costs of 15 million, why would the financing activity take 2 plus 0.25? Look, We want to get it right. Look, the PFS spoke for itself. We've had approaches from all sorts of people to assist in financing the project. We want to make sure we get the right deals, certain things, debt, for example, is contingent on certain things like permitting. It's also contingent on finalising the equity. So there is a process.

28:51 You know, I suppose you could just walk out and do it all in equity today, but that would be very diluted to shareholders. So that's not the preferred strategy. And if you want to do a debt component of financing, there's certain procedures and processes and due diligence that has to be gone through. So you unfortunately can't just snap your fingers and do it. It is a process and we need to work through that. 2 questions here. Are there chances of more manganese nearby and are there any other new manganese projects in Australia? Yeah, there are others looking for manganese. Briar Resources to the south of us has recently announced some quite interesting drilling results. There are, In our immediate area, there is definitely room for extension of the resource. We stopped drilling because 260 million tonnes is a heck of a lot of manganese. We kind of felt there's no point in drilling out more until we establish a way to commercialise it. But as the need arises, we can continue to drill and I'm pretty confident to add to that resource.

29:51 There's obviously other occurrences around. There's not too many people actively exploring in the manganese space at the moment, but bright resources is 1 notable example. Insofar as the early cash flows, where do you anticipate those to be dedicated towards? So I think it'll be a growth story. So that capital will be directed most likely to reducing operating costs by getting more efficient equipment. And it'll also be directed, I suspect, towards growing the business to expand the concentrate side of it, but also diverting a budget to completing the bigger journey on the EMM, PFS and DFS.

30:37 And at the appropriate time, probably not in the first couple of years, we would look to possibly return some of that to shareholders but we see a really great story in reinvesting that in the business in the early stages. Great. Another question here from Phil Vivian. Is sufficient water available for future high purity manganese production? We believe so. So we've done water exploration drilling. We've identified 2 aquifers to the east of the mining list area. We have, as I said, a water bore rig mobilising in the very short term to drill test bores. And then from that, you can do what's called pump testing to confirm the production potential of those aquifers. And obviously, then we'll have a clearer idea on the availability of water. But interestingly, the water's very clean up our way. So what they call a TDS is between 9 and 1,200, which for Western Australia is incredibly fresh, so we don't have any, you know, very salty waters to deal with. So that bodes well for the EMM production.

31:39 As to volumes, you'll have to watch this space, but we are confident, we believe, there's not going to be an issue with water production for both the concentrate business and the EMM plant. Question here about location. Your project is in a remote location, so logistics will be a significant part of your... So will significant... Will... One more time. Your project is in a remote location. So logistics will be a significant part of your OPEX. If it is, are there any options to reduce this? So I think we've done pretty much the work we can on that. It's, there's a configuration called a super quad here in Western Australia, in our part of the state where they're permitted for the use on the Great Northern Highway. Those trucks can haul about 150 tonnes of ore per truck.

32:26 And that is at the moment the biggest configuration that's available in Western Australia for road haulage. There's railway from Newman, which is about 130 kms north of us to the port, but that's owned by BHP. A number of proponents have tried to get access to that. It hasn't been able to be accessed by other companies at this point. That may change, but look, I'm not banking on it in the short term. When is the decision to go to electrolytic manganese taken and what assurance will you have about generating a sellable product?

33:03 So I don't think there's any problem with generating the product. We've done that multiple times. We have a very efficient leach process. We've got our heads around the purification required. We've produced manganese metal. If you look back at previous announcements, you'll see the photographs of the metal that we've produced. It's very high purity. It's 99.9% or so pure, which is well above the required 99.7 that the consumers require. So that's not an issue. I think the challenge was really the short term sort of drop in EMM prices in China due to various domestic factors, obviously COVID-19 being one of them. So, and then the larger CapEx, it's quite a capital intensive project compared to the ore concentrate business. So obviously, it's a much easier proposition for us to get the ore export up and running and then turn our mind to the EMM.

33:55 But I don't think it's an issue with our flow sheet. It's just more about how do you finance a larger project like that. How has COVID-19 impacted you and your operations at all? Yeah, not too bad actually. And I think here in Western Australia, we've done pretty well. We sort of had an early flare up of cases and then a pretty quick decline due to the self-imposed isolation that the government invoked. They haven't stopped us from moving around for business, and so we've been able to do most of what we need. Labs and things have had much tighter restrictions on visitors and stuff so there's been some extra procedure to go through but generally we've been able to continue work on the project without too much disruption.

34:41 So yeah, it's been it's been pretty good here. Excellent. Great. I think that's the end of our questions. One thing I'll say is if anyone has any questions that we couldn't answer that you weren't able to submit, please submit them to friends at 6 calm. Oh wait, hold on. In the final hour, we have another one. Okay, this is actually a pretty good one. Let's call this one the final question and I'll send it to you for the final one, Justin. How slash who sets the market price for manganese? Is it traded on the LME? Yeah, good question. It's probably what you know, it's not trade on the LME, just first up. It is what I'd call a translucent market. It's not completely opaque in the sense that there aren't 1 or 2 consumers who have a have a cartel or monopoly on the business.

35:32 It is supply and demand driven. It's negotiated on a case by case basis. It depends on the value and use of your particular product and how much appetite there is for it. There are different ores coming from different parts of the world and they have different physical and chemical properties. And depending on the desirability of those physical and chemical properties is, you know, you can negotiate a higher or lower price. So it tends to jump around a little bit, but ultimately like all commodities, it's driven by the cost of production as, you know, in terms of the floor and the marginal producers at the moment are the South African producers that have no access to rail, and they need to truck their material about 1000 kilometres from the Kalahari Basin to the ports in South Africa. And so they, it's generally thought that they have a marginal cost of production of about $5.50 a dry metric tonne unit. So that equates to around about $180, $200 US per tonne. So a lot of people think that's kind of where below which the producers are under cost pressure.

36:38 And so that kind of, and then above that it's demand driven. Great. Since you've started answering that question, we've got a few more in. So you know what, if you have the time, I'm open to taking some more if you can. Let's do it. Okay, let's do it. John Debrow wants to know, are there companies that are similar that could give a similar framework to understand possible company market caps once up and running? There's no immediate sort of analogue. You know, I guess OMH has the Buduk Creek mine, which is not dissimilar in the terms of geology, the type of product it produces, but they have quite a lot of downstream vertical integration. So they have their smelters in Malaysia, which makes it a little bit difficult to sort of value the mine.

37:24 Jupiter Mines also produces something that's not too dissimilar, But they're much larger than us at the moment. They produce, I think, 2.5 million tons a year. So you could look at them. There's obviously South32 as the grid island mine, but they're obviously a much bigger beast with a more complex portfolio of assets. So it'd be pretty hard to unpack the valuation of the manganese mine itself. But yeah, and then a lot of the, you know, Woody Woody's Chinese iron, so that's opaque. And then there's Aramat in Gabon that you can have a look at as well. But again, they produce other things. So in terms of pure, you know, single mine, manganese produces, it's a bit of a tricky one. I can't give you a straight answer, but there's some that you can look at to try and get a bit of a feel for it.

38:13 Great. Maria Cahill wants to know, what are the key sustainability goals for the project and how are they being managed and she also wants to say thanks Justin, Justin very insightful presentation. Thank you for that I appreciate those kind words. So we are, I guess, most of our sustainability works been actually on the side of things. Been actually on the EMM side of things. What we want to become is a renewable energy powered manganese production hub. That's a journey, obviously, but we've done quite a lot of work on renewable energy generation at site. We have a gas pipeline that goes through the project area, which is obviously a big step forward in sustainability from diesel, which is what a lot of the mines traditionally use in Western Australia. But we've also done a lot of work on integration of wind and solar into that. And we have a base case at the moment of 50% renewable energy penetration, but we've also got some work going on, which is looking to push that to as high as 90% renewable energy generation. So we're very keen to become a clean, green manganese producer over time.

39:15 I think the key was me saying that was the last question, because now we have much more. Mark Nessie wants to know, is Element 25 still aiming for 50% renewable power for the project and how will that power generation be financed? Yeah, I think most of that, we're probably going to start up on, I mean, our initial power requirement for stage 1 is only about 650 kVA. So it's pretty modest and probably not enough to make solar, or certainly not wind. Wind is too big for that. It'll probably have some solar. We haven't refined that yet. And then I think the growth in renewable energy penetration will come from the cash flow generated by the project. There are certainly solutions for solar-powered ball pumps, which we're looking at.

40:02 And then, you know, obviously, the power requirements around the equipment will hopefully include more renewables as time goes on. This one is part question, part statement comes from Shane Langsford. And he says, can Justin do more talks and presentations? Every time he does, the share price goes up up another 7% in the last 30 minutes. Fantastic, Shane. I'm glad for that. I haven't had a chance to look as you can appreciate, but I'll do my best to keep telling the story. Awesome. I think that is the end of the questions. So first off, I want to thank absolutely everyone for attending anyone who submitted questions, people who just watched. Absolute pleasure to have you all here. I'd like to pass it along to Justin for the final word.

40:50 Thanks Bianca, I'd say thank you as well. I hope you got something out of it. I think we're on a really exciting journey. It's a bit different to a lot of development projects that you'll see out there. And If you're interested in investing, take a closer look and any questions that come through, I'll do my best to give you