[SMM News] European Manganese Industry: the Chvaletice Manganese Project will provide high purity manganese products for large-scale lithium battery manufacturing

SMM6, May 5-(Euro Manganese) of the European manganese industry provides an update on the operation of Chvaletice's manganese project, which is located in the Czech Republic and is wholly owned by the European manganese industry. The agreement includes the signing of strategic agreements with consumers of battery raw materials, feasibility studies and updates on demonstration plants. This includes the issuance of two major contracts related to the launch of the project feasibility study and its licensing and environmental impact assessment procedures, as well as some positive developments in the local communities adjacent to the project.

Mr. Marco Romero, President and Chief Executive Officer of the European Manganese Industry, commented, "We are pleased to report on the company's first important potential cooperative customer, the appointment of two main contractors, and we have decided to move the project to the feasibility study stage. We demonstrate the continued progress in the proposed development of the plant and the further development of a valuable relationship with the local community. "

Sign the first strategic agreement

In early May 2019, the company signed a strategic agreement with potential customers on high-purity manganese products to provide a strategic and technical cooperation framework for large-scale lithium-ion battery manufacturing, including production. High-performance lithium-ion batteries in multiple market segments, including electric vehicles. Under the strategic agreement, the two sides intend to cooperate in order for the company to propose the design and construction of the Chvaletice manganese project plant to meet the environmental quality and long-term supply requirements of high-purity manganese products from counterparties and their customers.

Under the terms of the agreement, the company plans to deliver a specified amount of high-purity manganese sulfate monohydrate ("HPMSM") ("model material") to counterparty plants in early 2020. Demonstration materials will be provided in batches and tons of finished product samples for customer testing and evaluation at the company's demonstration plant. Upon completion of the testing and identification of the model materials, the parties intend to negotiate with a view to reaching the terms and provisions of an off-take agreement on the supply and purchase of high-purity manganese products produced by the project.

The company will continue to engage in active discussions with several consumers of high-purity manganese products in Europe, Asia and North America, with the goal of entering into similar strategic, commercial, technical and framework agreements with these companies for testing and certification. The high-purity manganese products of the project are designed to enable the parties to enter into binding off-take agreements and long-term commercial or strategic relationships.

Feasibility study, main contractor and demonstration plant

Following the completion of the preliminary economic assessment ("PEA") earlier this year, the company plans to advance the project to the feasibility phase. Proposals in the list of engineering companies are being evaluated and it is expected that the relevant contracts for the feasibility study will be awarded to two or more parties during the second quarter of 2019.

The company has appointed Tetra Tech Canada Inc. ("Tetra Tech") as the owner's engineering representative to supervise other consultants and service providers related to the feasibility study and to prepare a study report on the feasibility of the National Instrument 43 / JORC project. In addition, a department of Bilfinger Tebodin (Bilfinger SE, Czech Republic) has been appointed to prepare the description and notification of the project for submission to the Czech Ministry of the Environment to advance the licensing and environmental assessment procedures for the project.

Tetra Tech carried out some early feasibility studies during the quarter ended 31 March 2019. Therefore, subject to the acquisition of the remaining feasibility study contract, EMN expects the feasibility study to be completed by early 2020. As the feasibility phase progresses, the company hopes to continue to assess potential value-added opportunities for the project. These include the potential to optimize building size and layout, equipment selection, solid-liquid separation methods, alternative solution purification methods, manganese sulfate crystallization techniques, leaching methods, waste generation and recovery, and minimizing energy and water consumption. In cooperation with one or more potential consumers of high-purity manganese products, the company also intends to assess the feasibility of building one or more satellite manganese metal dissolution plants at the customer's NMC precursor plant. This will enable the company to sell manganese sulfate solutions instead of granular manganese sulfate monohydrate, thus eliminating the crystallization steps at these locations. The company also plans to assess the possibility of selling magnesium sulfate, a by-product, for agricultural purposes. These and other opportunities will be assessed within the scope of the design study of the feasibility study.

The establishment and commissioning of a demonstration plant in the Czech Republic will also be planned and prepared, which will provide large quantities of multi-tonne finished product samples for customer evaluation and identification. The plant aims to replicate the entire process flow chart proposed in PEA and to produce the equivalent of 100kg of HPMSM per day. Some potential customers have expressed interest in testing and identifying these products for the production of lithium-ion batteries and cathode precursor materials, combined with existing nickel, cobalt and lithium products. The demonstration plant will also achieve process optimization and testing of the final product and serve as a testing and training facility for future operators. Design work has been initiated and the company is currently evaluating turnkey plant supply proposals for completion and performance assurance support, with the goal of signing contracts during the second quarter of 2019. The company expects the plant to be completed by the end of 2019 and to provide the first batch of finished product samples to potential customers in early 2020.

Rezoning of land for projects and land purchases

The adjacent towns of Chvaletice and Trnavka, where the tailings of the company project are located in the west and east of the project, respectively, voted unanimously to initiate the rezoning process. According to the municipal land use plan, the base land for the tailings of the project.

In mid-May 2019, the Company entered into a conditional sale and purchase agreement with the city of Trnavka for the purchase of a narrow 2.96 hectares of land near the Chvaletice tailings. The land is mainly used for the infrastructure of the project and the establishment of a visual and acoustic buffer zone between the project and the village of Trnavka. The payment period is several years and is linked to specific licensing milestones.

Mr. Marco Romero, President and Chief Executive Officer of Manganese Europe, said, "We are pleased that our relations with the adjacent communities of Chvaletice and Trnavka continue to develop. Our team is working to ensure that local communities are informed and create meaningful opportunities for them to participate in the evaluation and planning of the Chvaletice manganese project, and their input is integrated into their development plans. It also aims to bring them overwhelming positive benefits, including the restoration of brown areas affected by the environment. Our goal remains to build long-term, respectful and collaborative relationships with these communities, while ensuring that projects are seamlessly integrated into the environmental, social and economic structures of the region. "

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