Manganese X Energy (TSXV: MN) has secured a $2-million investment from Canadian mining billionaire Eric Sprott to support its Battery Hill project in New Brunswick. Shares of the manganese developer soared on the announcement.
The investment is part of a private placement of 60 million subscription receipts priced at 3.5¢ each for $2.1 million. Sprott has committed to purchasing approximately 57.1 million of the receipts, which would make him a control person of the company (holding over 20% of voting shares) upon closing.
Manganese X’s shares gained 43% to close at 5¢ apiece on Thursday in Toronto for a market capitalization of $6.8 million.
The company plans to use the proceeds to advance the proposed $350-million capex Battery Hill towards a prefeasibility study. The project could produce about 68,000 tonnes of high-purity manganese sulphate over a 47-year mine life, according to a preliminary economic assessment in 2022.
Manganese is used in batteries and steelmaking among other industries.
Woodstock
Located near the town of Woodstock, NB, the project hosts a series of banded iron formations that collectively constitute one of the largest manganese resources in North America, according to a study cited by the company.
The property covers about 14 sq. km and has a resource estimate of 35.14 million tonnes grading 6.39% manganese and 10.64% iron in the measured and indicated categories, plus 27.72 million tonnes grading 6.46% iron and 10.73% iron in the inferred category.
At a 10% discount rate, the project would generate a post-tax net present value of US$486 million and a post-tax internal rate of return of 25%. Capital cost payback is estimated at 2.8 years.
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