Element 25 has announced sub-sampling of diamond core drilled back in 2013 from the Coodamudgi deposit resulted in manganese grades going up to 42.3 per cent right from surface. Coodamudgi is located near the company’s Yanneri Ridge resource within its Butcherbird project in the Pilbara. Butcherbird already has an outstanding pre-feasibility study wrapped around it showing a pre-tax NPV of $283m at a manganese concentrate grade of 33 percent.
Element 25 Managing Director, Justin Brown said: “The grades achieved in the sub-sampling exercise at Coodamudgi are indicative of the potential to achieve a product grade in excess of the grades published in the PFS of 33% manganese.”
“If this can be confirmed under full scale test work, this will have a positive impact on what are already excellent Project economics.”
Only a very thin band of drill core was tested in 2013 and even though that interval went 42.2 per cent manganese, it was never followed up with a more comprehensive analysis of the drill core at the time.
The company has now sampled a six-metre zone that returned an average of 37.6 per cent manganese, peaking at 42.3 per cent manganese in a one metre sample, right at the surface.
The Coodamudgi resource lies entirely within the Butcherbird project mining lease that was granted to Element 25 just last week. Element 25 said the manganese mineralisation at the Butcherbird project is characterised by flat-lying bands of clay inter-layered with high-grade manganese zones.
The sampling across a six-metre interval of drill core at Coodamudgi provides Element 25 with a more realistic representation of any potential mining scenario at the project. The sub-sampling of high-grade ore from the drill core emulates the processing route via beneficiation of the material on a small scale, according to the company.
Management is looking to potentially boost project revenues outlined in its PFS via a potential increase of the overall manganese concentrate grade however, said more work is required before it can make these assumptions.
Any substantial additional high-grade material identified within Element 25’s newly granted mining lease could potentially have a significant effect on Butcherbird’s already solid economics that shows a base case internal rate of return of 223 per cent over an initial 42-year mine life.
Element 25’s has front ended its cash flows with its PFS estimating the first five years of operations will yield annual free cash of $32.1m a year.
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