Euro Manganese Inc. (EMN.V) Earnings Call Transcript & Summary

Okay. So good morning, and welcome to the Euro Manganese Investor Webinar. I'm Jane Morgan, the Australian Investor and Media Relations Manager. And today, I'm joined by our Chairman, Rick Anthon; and our Interim CEO, Martina Blahova. We'll be providing a company update and running through our recently launched SPP, followed by a Q&A session. So I'll hand over to you first up. Thanks, Martina.

Thank you, Jane. It's good to be here. Good morning, everyone. Thank you for your time this morning. I'll just give a quick update on what we've done over the past few months. We have achieved quite a few significant operational, permitting and regulatory milestones. Our Czech project, which is focused on reprocessing of historic tailings into battery-grade manganese products, was declared under the European Critical Raw Materials Act as strategic in March 2025. And in the same month, the Czech government also designated our manganese deposit as critical strategic for the Czech Republic. What that means is that these 2 designations can expedite and streamline the permitting process, and they also allow us to pursue certain grants and subsidies that are at the national and the EU level. We have also obtained a mining lease permit, which replaces the exploration licenses we held and were still valid until May 2026. But this mining lease permit gives us the sole right to extract the mineral from the deposit, and it's our sole right, the deposit is we -- and only us, we can -- sorry, and only we can extract the mineral and process it into the high-purity manganese. We also have a fully commissioned demonstration plant at site, and we have produced samples available for testing and qualification processes by our potential customers. Those samples are for the manganese metal, which is the first product that we produce, and also we then convert it into high-purity manganese sulfate, which is also meant for the batteries in EV, electric vehicles. A little bit on the battery-grade manganese and how it plays an important role in the energy transition. Manganese these days is already in about 50% of the cathodes in the battery. When it comes to car batteries, the focus these days is on decreasing the cost of the batteries and also on increasing the range. And manganese can play a significant role in both of these. Emerging technologies aim to improve the energy density and introduce manganese into cathodes, and also by increasing manganese in some other battery chemistries that -- where it's already present and replacing, for example, nickel or cobalt, the cost can be decreased while the performance of the battery is still at the same level. Even though the sales of electric vehicles have decreased a little bit than expected, so the growth is not as significant, the sales are still increasing and especially in some regions like Asia, and the U.S. and Europe are picking up as well. So we at Euro Manganese believe that manganese is the future of the electrification, and we are ideally positioned to service not only our European customers but also others in the rest of the world. Recently, on April 11, we welcomed Rick Anthon as the Chairman of our Board, and I will now hand it over to him to make his introduction.

Thanks, Martina, and thanks, Jane. Yes, I've just very recently joined Euro Manganese as Chairman. My background, aside from being a reform lawyer, but I think more relevantly, I've been involved in the lithium and the battery industry for 9 on 20 years now, I think, probably from when there was barely a lithium and battery mainstream industry. Firstly, I worked with Orocobre pre-IPO, worked with the IPO and joined the company full time well over 10 years ago. So I had the opportunity to work through the development of Orocobre's projects through the financing and the partnering and the building and the family offtaking, and those are projects both in Argentina and in Japan. And then we went through a series of acquisitions and mergers, which grew the company substantially. We merged with Galaxy and formed Allkem and then subsequently merged with Livent to form Arcadium, and these were both multibillion-dollar mergers that created -- depending on how you measure these things, created the third or fourth largest lithium producer in the world. And ultimately, as I think as most people are aware, Arcadium has been taken over by Rio, which only, I mean, recently settled. And I think that for a company like Rio, to spend USD 10 billion is a resounding endorsement of the future of this industry despite -- as Martina alluded to, despite some of the headwinds that we have in adoption and also the geopolitical headwinds that seem to be driving most people crazy at the moment. So for me, the question was, well, why Euro Manganese? I think as Martina spoke to briefly, the high-purity manganese of which there is very little outside of China is going to be a vital part in the growth of this industry. The project which the company has is -- has robust economics. It's proven that it's technically deliverable by a very large-scale demonstration plant. And to me, that means that that project is going to be financeable and it's going to be profitable. So it's an opportunity for me to take my experience in working in companies like this that have been trying to build themselves up and find partners and deliver projects and assist as best I can with Martina and her team and pushing the project and pushing the company forward.

Wonderful. Well, thank you for the introduction, Rick, and for the overview, Martina. [Operator Instructions] I might jump into a few questions now. We've obviously talked about the fact that we've got our SPP live at the moment. So what's the strategic rationale behind launching this $1.5 million SPP at this time? And how does that fit in within the broader funding strategy for Euro Manganese?

So we've -- this share purchase plan is part of the whole equity raise that we're running. We wanted to give the Australian shareholders an opportunity to take a part in this financing. Unfortunately, this vehicle does not exist in Canada. So it's only open to shareholders in Australia and New Zealand. We wanted to complement the private placement with the SPP, and we did adjust the size of it, but originally, that was always the plan. And we now currently have the maximum SPP kind of subscription at AUD 1.5 million. The price is currently about 20% above the subscription price, and it also comes with one free attaching warrant. This financing will allow us to continue operating the project to advance some of the permitting and to get us a bit closer to the next kind of larger financing, which would then bring us to the final investment decision.

Wonderful. We did have quite a few other questions in there that have come through already. There's just a few questions that have been on the use of funds. So can you provide a bit of a detailed breakdown on the SPP proceeds and how they're going to be used?

So in addition to kind of operating expenses of the company, we also will be, as needed and if needed, continue operating the demonstration plant. We do have currently enough samples to send to our customers, but we can always produce more at the demo plant. There are some permits that we're still pursuing so that we don't delay the project itself. There's quite a few permits at site. And we also will be pursuing the Czech government grants. The main kind of focus of now the rest of 2025 and going forward is, of course, securing more offtake agreements and converting those agreements, the term sheets that we have into proper agreements so that we can underpin the bank debt when we come to project financing. And a significant effort will also go into securing a strategic investor into the project, ideally at the project level and with an offtake agreement, but we will see how and what shape and form that will take.

Thank you, Martin. You touched on this earlier, but this was obviously attached to another placement. Wondering, perhaps just give a little bit more detail on the funds that were raised through that other placement.