Okay, good morning and welcome to the Euro Manganese Investor Webinar. I'm Jane Morgan, the Australian Investor and Media Relations Manager, and today I am joined by our Chairman, Rick Anthon, and our Interim CEO, Martina Blahova. We'll be providing a company update and running through our recently lodged SPP, followed by a Q&A session. 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. 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 two 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. 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, 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 a 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. 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 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.
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 11th, 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. Yeah, so 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 nigh 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 IPO and joined the company full-time well over 10 years ago, so had the opportunity to work through the development of Orocobre's projects through the financing and the partnering and the building and the off-taking, and those are projects both in Argentina and in Japan. 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 multi-billion dollar mergers that created, depending on how you measure these things, the third or fourth largest lithium producer in the world. Ultimately, as I think most people are aware, Arcadium has been taken over by Rio Tinto, which only recently settled, and I think that for a company like Rio Tinto to spend CAD 10 billion is a resounding endorsement of the future of this industry, despite, as Martina alluded to, 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. For me, the question was, 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 has robust economics. It is proven that it is technically deliverable by a very large-scale demonstration plant. To me, that means that that project is going to be financeable and it is going to be profitable. It is 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. Thank you for the introduction, Rick, and for the overview, Martina. Again, should the attendees on the line have any questions for Rick or Martina, please use the Q&A function, which can be found at the bottom of your screen. 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. What is the strategic rationale behind launching this CAD 1.5 million SPP at this time, and how does that fit in within the broader funding strategy for Euro Manganese?
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 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. 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 answer quite a few of the questions in there that have come through already. There's just a few questions that have been on the use of funds. Can you provide a bit of a detailed breakdown on the SPP proceeds and how they're going to be used?
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 do not delay the project itself. There are quite a few permits at site. 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 off-take 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.
A significant effort will also go into securing a strategic investor into the project, ideally at the project level and with an off-take agreement, but we will see how and what shape and form that will take.
Thank you, Martina. You touched on this earlier, but this was obviously attached to another placement. Do you want to perhaps just give a little bit more detail on the funds that were raised through that other placement?
With the private placement that we launched in March, we have secured EUR 3.8 million from the European Bank for Reconstruction and Development. The EBRD is already a shareholder. They're currently at 4%, and they will increase their shareholding to about 16%. They have been a long-term supporter of the project, and we fit ideally into the mandate of the project that they support. We also have secured CAD 3 million from Eric Sprott, a well-known Canadian investor who has taken a large interest in manganese and believes in the future of high-purity manganese sulfate. We also have kind of the president's list, obviously current owners and management and directors participating.
Wonderful. Next one here. Can we explain the shortfall mechanism for the SPP and how Orion Resource Partners may participate in any potential funding shortfall?
Any shortfall from the SPP will be filled by the subscription from Orion Resource Partners. They are a secured creditor. Once we know how much we've raised from the SPP, which closes this Friday, the remainder has been backed by Orion. We know that we will fully fill the whole plant equity raise.
Thank you, Martina. You did just touch on this as well. The placement is closing this Friday. We encourage, you have my contact details on the bottom of the ASX releases, or contact Computershare to receive your personalized BPA form, but reach out if you do have any other questions. Moving on now. This one has come through a few times, in fact. Just looking ahead, what should investors be looking forward to from a news flow catalyst standpoint over the next 6-12 months?
As I mentioned, our focus is on securing more off-take term sheets and agreements. We're working with several parties, and we're continuing to advance those discussions, despite some of the headwinds that Rick and I mentioned. Also, we'll be looking for the strategic investor, some of the permitting milestones, and also as we're pursuing the Czech government grant, we might know where we are by the end of this calendar year. Some funding, some advancement of the project itself, and customers.
All exciting times. I think that actually might be all the questions that have come through. I'd also like to note that we will be putting an updated investor presentation out on the ASX, hopefully this week, which will provide further information on the project and the catalyst that we spoke about now. If we've missed any of your questions, I would encourage you to reach out via the contact details on the bottom of our ASX releases. Thank you again for your time, everyone.
Thanks, everyone.
Yeah.