Euro Manganese Inc. [TSX-V/ASX: EMN] says it has entered into an offtake term sheet with Verkor, a low-carbon battery manufacturer based in Grenoble, France, for the sale of high-purity manganese sulphate monohydrate from its Chvaletice Manganese Project in the Czech Republic. The term sheet is non-binding.
Euro Manganese is a battery materials company focused on becoming a leading, competitive, and environmentally superior producer of high-purity manganese for the electric vehicle industry and other high-technology applications. The Chvaletice Manganese Project is a unique waste-to-value recycling and remediation opportunity involving reprocessing old tailings from a decommissioned mine.
The project is the only sizable resource of manganese in Europe, strategically positioning Euro Manganese to provide battery supply chains with critical raw materials to support the global shift to a circular, low-carbon economy.
The parties said yesterday they intend to enter an offtake agreement, where upon the pricing mechanism and minimum tonnages outlined in the term sheet, would become binding upon the signing by the parties of a legally binding offtake agreement, together with any other agreements necessary to give effect to the project.
“This is a major milestone for Euro Manganese and for the European battery value chain,” said Dr. Matthew James, President & CEO of Euro Manganese. “I am immensely proud of the team and their hard work in negotiating the first long-term offtake term sheet, with a pricing structure, from a Western supplier in the high-purity manganese market. Verkor has undertaken due diligence on our completed feasibility study and has placed their confidence in us and in our product. We look forward to supplying to them as they advance on their goals of delivering batteries to their customers, including Renault Group. Together, we are aligned in our pursuit of helping to create a cleaner world by enabling the green energy transition.”
The offtake tonnages are equivalent to a percentage of the company’s annual HPMSM production on a take or pay basis. Deliveries are to commence from first production, expected to be in 2027, for an initial tenure of eight years with potential for renewal. The commencement of the initial term shall be subject to successful qualification of the company’s HPMSM from the demonstration plant in Verkor’s supply chain.
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Pricing will be based on an index-adjusted western benchmark price, representing HPMSM from a secure, traceable, local European supply source, with excellent ESG credentials and corelates to the Chvaletice HPMSM CO2 footprint, which is forecast to be approximately one-third of the incumbent Chinese industry.
Benoit Lemaignan, CEO of Verkor added: “This announcement is a further concretisation of the efforts undertaken over the last two years to build the future of electric mobility in Europe. Euro Manganese’s project meets our goals of securing traceable, local raw materials which align to European highest ESG standards. I know we can continue to count on them for the next milestone of our development as we make our first gigafactory project a reality.”
The price for Chvaletice HPMSM will rise and fall proportionally with the movement of a published HPMSM index, on a rolling three-month quotational period. Pricing is subject to a floor price which ensures Euro Manganese will meet its project financing debt covenants.
The term sheet is the company’s first term sheet for a long-term offtake. Euro Manganese said it anticipates more term sheets or agreements will follow in the near term as a result of the offtake tender process, which is currently underway.
