Euro Manganese Faces Liquidity Hurdles Despite Permit Wins and Financing Boost

Strategic Progress on Chvaletice Manganese Project

Euro Manganese Inc. (ASX, EMN) has reported significant strides in the development of its flagship Chvaletice Manganese Project in the Czech Republic during the third quarter ended June 30, 2025. The company secured a mining lease permit granting exclusive rights to mineral extraction, alongside final environmental and social impact approvals, marking critical regulatory milestones that underpin the project's advancement.

Located near Prague, the project aims to reprocess manganese-rich tailings from a decommissioned mine, producing high-purity electrolytic manganese metal (HPEMM) and manganese sulphate monohydrate (HPMSM) tailored for lithium-ion battery applications. The environmental remediation of the site aligns with stringent Czech and EU standards, enhancing the project's sustainability credentials.

Financing and Capital Structure Updates

To support ongoing development, Euro Manganese completed a financing package raising approximately $11.1 million through a combination of private placements and a share purchase plan. This capital injection involved participation from notable investors including the European Bank for Reconstruction and Development and Eric Sprott's investment vehicle. The company also amended its $100 million convertible loan facility with Orion Resource Partners, increasing the interest rate to 14% and deferring interest payments, while issuing warrants as part of the revised terms.

Despite this progress, liquidity remains a concern. The company acknowledges that current funds are insufficient to cover all corporate and project development activities over the next twelve months without additional financing. Euro Manganese continues to explore further funding options to sustain momentum toward a final investment decision.

Operational Highlights and Market Engagement

The demonstration plant commissioned in July 2024 has successfully produced on-spec high-purity manganese products, validated by independent laboratories. This facility serves as a critical platform for product qualification with prospective customers and process optimization ahead of commercial-scale operations.

Euro Manganese is actively negotiating offtake agreements with battery manufacturers and automotive OEMs, aiming to secure contracts covering 80-90% of production capacity. A recent non-binding term sheet with UK-based Integrals Power Limited highlights the company’s efforts to integrate its HPMSM into next-generation lithium iron phosphate battery cathodes, reflecting growing market interest in manganese-rich chemistries.

Strategic Designations and Regulatory Support

The Chvaletice Project has been designated a Strategic Deposit by the Czech government and a Strategic Project under the EU Critical Raw Materials Act. These statuses facilitate expedited permitting, access to preferential financing, and potential eligibility for grants and subsidies. Such support is crucial as the company navigates the complex regulatory landscape and seeks to align with evolving European supply chain security priorities.

Meanwhile, Euro Manganese’s North American ambitions continue with the Bécancour Project in Quebec, Canada. Although work remains on hold pending financing, the company has secured an option to acquire land at the Port of Bécancour, positioning itself to serve the growing North American battery market in the future.

Market Outlook and Challenges Ahead

The demand for high-purity manganese products remains robust, driven by the expanding electric vehicle market and innovations in battery chemistries that increase manganese content. However, regional market dynamics, such as slowing EV sales growth in Europe and the US, introduce uncertainties. Euro Manganese’s ability to finalize financing, secure remaining surface rights, and convert offtake agreements will be pivotal in advancing the project to commercial production.