Element 25 picks up half mil in shares for royalty streams

ASX-listed Element 25 has completed a deal that will see it sell a portfolio of royalties it was holding over multiple projects for around A$500,000 worth of shares in TSX-listed specialist royalty company, Vox Royalty Corp.

Element 25 will be issued with 151,700 Vox shares at a value of CAD$3 per share in return for handing over its portfolio of royalties that stem from multiple projects that it has worked on over the years. .

The royalties included in the agreement are the 1.0% royalty over the Fortnum / Peak Hill project held by Westgold Resources; the 2.0% royalty over the Green Dam project held by St Barbara Limited; the 1.0% royalty over the Holleton project held by Ramelius Resources; the 0.75% royalty over the Yalbra project held by Buxton Resources and the A$7.50 / ounce discovery payment over the Yamarna project held by Gold Road Resources.

Vox is a fast growing royalty and streaming company that has been involved in more than $1.5b worth of royalty transactions over the past 30 years.

It provides punters with an alternate route to investment in the mining sector without the risk of holding actual shares.

Element 25 recently delivered an exceptional pre-feasibility study for its Butcherbird manganese project in WA that shows the operation will produce a pre-tax NPV in real terms of AUD$283M at an incredible 223 per cent IRR.

The company’s maiden ore reserve at Butcherbird stands at 50.55M tonnes grading 10.3 per cent, containing 5.22M tonnes of manganese.

Element 25’s ‘Phase 1’ PFS modelled a 42-year life of mine, which should churn out about AUD$24.4M a year in free cash on average.

Manganese is used in the process to convert raw iron ore into iron as it removes oxygen and sulphur. It also is a critical alloy that aids the chemical process to convert iron into steel - its properties impart strength and decrease the brittleness of the construction material. 

Curiously, manganese is also a key component of lithium battery cathodes, which offers Element 25 the opportunity to ride the rising electric vehicle wave.

Element 25’s Butcherbird project is located south of Newman in WA and is on the main highway and adjacent to the Goldfields gas pipeline, providing access to a realistic turnkey operation.

Element 25 Managing Director, Justin Brown said the royalty transaction: …”adds important additional capital to the balance sheet and will contribute to funding the development of the Butcherbird Manganese Project, the Company’s flagship asset.” 

Over the last couple of weeks, Element 25’s stock doubled from 20c to 40c after the market consumed its pre-feasibility study and unlike many other flash in the pan ASX-listed company share price runs – it stayed there.

Is your ASX listed company doing something interesting ? Contact : matt.birney@businessnews.com.au