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Euro Manganese Delivers Positive PEA for Chvaletice Project, Unlocking a New Path to Europe's Battery-Grade Manganese Future
Euro Manganese Inc. (TSX-V and ASX: EMN; FSE: E06) has released a positive Preliminary Economic Assessment (PEA) for its Chvaletice Manganese Project (CMP) in the Czech Republic, delivering an updated and optimised development blueprint that responds directly to current market conditions. Completed by independent engineering firm Tetra Tech Canada Inc., the Euro Manganese Chvaletice Project positive PEA results build on the company's 2022 Feasibility Study and incorporate learnings from its demonstration plant, extensive metallurgical test campaigns, and ongoing customer engagement.
The results confirm a project with meaningful scale, a robust operating margin, and a phased construction strategy designed to manage capital risk whilst maximising long-term value. With a targeted production start in 2032 and a 26-year project life, Chvaletice is shaping up as a long-duration, high-quality battery materials asset — potentially the only integrated high-purity manganese producer in Europe and North America.
"Despite the challenging market and pricing conditions, the PEA results demonstrate the strength and resilience of the Project. It provides a clear pathway to unlocking the full long-term value of the Chvaletice Manganese Project as demand accelerates for localised, traceable, and sustainably produced battery grade high purity manganese."
— Martina Blahova, President & CEO, Euro Manganese
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Headline Economics: A Resilient Project Built for Price Cycles
The Euro Manganese Chvaletice Project positive PEA results deliver a strong financial profile that holds up even under conservative pricing assumptions. The average life-of-project HPMSM (High-Purity Manganese Sulphate Monohydrate) price used in the model is $2,888 per tonne, sourced from an independent market study prepared by Marketeye.org in April 2026.
Key economic metrics are summarised below:
| Metric | Before-Tax | After-Tax |
|---|---|---|
| NPV (8% real discount rate) | $740.0 million | $492.1 million |
| IRR | 16.0% | 13.8% |
| Payback Period (from start of processing) | 6.5 years | 7.3 years |
| Undiscounted Cumulative Cash Flow | $4,304.4 million | $3,353.0 million |
| Operating Margin | 48% | — |
The 48% operating margin is a standout figure. It demonstrates that even at conservative pricing assumptions reflecting current market softness, the project retains the capacity to generate substantial cash flow across different commodity price environments.
A Phased Construction Strategy: Reducing Risk, Preserving Optionality
One of the most significant structural changes introduced in the Euro Manganese Chvaletice Project positive PEA results is the adoption of a two-phase construction approach. Rather than committing full capital upfront, the project is designed to be built in stages:
- Phase I (50% capacity): Initial capital of $627.5 million, targeting production of 75,000 tpa HPMSM in Years 1–3
- Phase II (capacity expansion to 100%): An additional $197.8 million invested across Years 1–3 of operations, scaling to 150,000 tpa HPMSM from Year 4 onwards
- Total capital expenditure (including sustaining capital): $964.4 million over the life of project
This phased structure means the company does not need to raise or deploy the full capital envelope before generating cash flow. Furthermore, Phase II spending is intended to be funded partly from Phase I operating cash flows, which meaningfully reduces funding risk and gives the team additional time to optimise the full-scale plant design.
Capital Schedule Summary
| Phase | Total Capital | Timing |
|---|---|---|
| Phase I (Initial) | $627.5 million | Pre-operations (years -4 to -1) |
| Phase II (Expansion) | $197.8 million | Years 1–3 of operations |
| Sustaining Capital (Mining, RSF, Process) | $139.1 million | Years 1–26 |
| Total Project Capital | $964.4 million | Full life of project |
The contingency on initial capital is $66.7 million, representing approximately 15.5% of direct costs — a conservative and appropriate provision for a project at this stage of development.
Higher Recoveries and Improved Unit Economics: The Metallurgical Edge
The PEA incorporates meaningful metallurgical improvements over the 2022 Feasibility Study, underpinned by additional test work, demonstration plant operational learnings, and process engineering updates.
Key production improvements include:
- 60% overall manganese recovery to HPMSM (up from prior study levels)
- 61% overall manganese recovery to HPEMM (High-Purity Electrolytic Manganese Metal)
- 46% magnesium recovery to MgCO3 by-product
- Nominal annual production capacity of 150,000 tonnes HPMSM at full build-out
- Full flexibility to deliver both HPEMM and HPMSM as customer requirements evolve
The revised flowsheet also incorporates two new process circuits: one recovering manganese from anode slimes generated in the electrowinning circuit (previously a loss point), and one enabling production of magnesium carbonate (MgCO3) as a saleable by-product rather than a waste stream. At up to 20,000 tpa MgCO3, this adds incremental revenue with minimal additional capital.
Life-of-Project Production Summary
| Parameter | Total |
|---|---|
| Tailings processed | 26,960,000 tonnes |
| Average manganese grade | 7.33% |
| Contained manganese | 1,975,000 tonnes |
| HPMSM produced | 3,652,000 tonnes |
| Mn recovery to HPMSM | 60.0% |
Understanding HPMSM: Why This Product Matters to Battery Makers
For investors less familiar with battery materials, it is worth understanding what HPMSM is and why it commands a premium price.
High-Purity Manganese Sulphate Monohydrate (HPMSM) is a refined chemical compound containing at least 99.9% purity and a minimum of 32% manganese content. It serves as a critical precursor material used in the manufacture of lithium-ion battery cathodes, particularly for NMC (nickel-manganese-cobalt) and LMFP (lithium-manganese-iron-phosphate) chemistries — two of the fastest-growing battery types in electric vehicles and grid-scale energy storage applications.
Why Does Purity Matter?
The key distinction between standard manganese products and HPMSM is purity. Battery manufacturers require trace element levels — such as iron, copper, zinc, and sodium — to be extremely low to avoid degrading battery performance and safety. Achieving this requires sophisticated processing, which is precisely what the Chvaletice plant is designed to deliver.
What Is the Investment Significance?
HPMSM commands a significant price premium over conventional manganese products because of the technical complexity required to produce it and because supply is overwhelmingly concentrated in China. Euro Manganese's ability to produce HPMSM from a European feedstock, using a selenium-free and fluorine-free process, represents a genuine differentiating capability.
Key Terms Glossary
| Term | Definition |
|---|---|
| HPMSM | High-Purity Manganese Sulphate Monohydrate — battery-grade manganese product used in cathode precursors |
| HPEMM | High-Purity Electrolytic Manganese Metal — intermediate product, fully convertible to HPMSM on-site |
| MgCO3 | Magnesium Carbonate — by-product of HPMSM processing, now targeted as a saleable product |
| NPV | Net Present Value — the present value of future cash flows discounted at a set rate (8% used here) |
| IRR | Internal Rate of Return — the discount rate at which NPV equals zero; a measure of project profitability |
| PEA | Preliminary Economic Assessment — a conceptual-level study used to assess project viability |
Sensitivity Analysis: Testing the Downside
The PEA includes a thorough sensitivity analysis around the post-tax NPV base case of $492 million. Importantly, the results show the project retains positive NPV across all scenarios tested, including a 10% price decline and a 10% discount rate.
| Sensitivity Scenario | Change from Base ($ M) | After-Tax NPV ($ M) |
|---|---|---|
| Base Case (8% discount rate) | — | $492 |
| Discount rate at 10% | -$232 | $260 |
| Discount rate at 6% | +$343 | $835 |
| HPMSM price +10% | +$229 | $721 |
| HPMSM price -10% | -$229 | $263 |
| Total capital +10% | -$67 | $425 |
| Total capital -10% | +$67 | $559 |
| Total operating costs +10% | -$120 | $372 |
| Total operating costs -10% | +$119 | $611 |
| Recoveries +10% | +$127 | $619 |
| Recoveries -10% | -$127 | $365 |
Notably, the project is more sensitive to product prices and operating costs than to capital costs, which reflects the relatively capital-efficient nature of a tailings reprocessing operation compared to a conventional greenfield mine.
Permitting Progress and Environmental Credentials
The Euro Manganese Chvaletice Project positive PEA results benefit from a permitting foundation that meaningfully reduces development risk relative to many early-stage projects. Key regulatory milestones already achieved include:
- A positive Environmental and Social Binding Statement issued by the Czech Ministry of Environment in March 2024, confirming the project meets environmental and social standards
- A Mining Lease District permit granted on 23 January 2025, authorising the company to conduct mining activities
- Permit for the location of the processing plant
- Permit for the location of the rail spur
- Product registration under the EU's REACH Regulation
- Official designation as a Strategic Deposit under Czech law and as a Strategic Project under the EU Critical Raw Materials Act
What Is the Environmental Distinction?
The project carries a genuine environmental distinction: because it involves reprocessing historical mine tailings rather than opening a new mine, it is classified as waste recycling, aligning with circular economy principles. The environmental assessment confirms that project implementation will reduce existing contamination of groundwater and surface water in the tailings area.
Infrastructure Advantages
The site footprint benefits from excellent existing infrastructure: direct rail access, a highway connection to Prague (~89 km), a gas pipeline, and proximity to an operating power plant. In addition, the proposed plant site is already zoned for industrial use.
Community and Social Commitments
The Chvaletice project is positioned as an economic catalyst for the Pardubice Region. In terms of employment and engagement, the project offers the following:
- 800–1,000 construction jobs during the build phase
- Approximately 400 permanent direct operational roles, with an 85% local hiring commitment
- A dedicated public information centre in Chvaletice and digital engagement platforms
- The project currently faces no material barriers to community acceptance, reflecting a strong Social Licence to Operate
Near-Term Catalysts and the 2026–2027 Roadmap
Euro Manganese has laid out a clear set of priorities to advance the project toward a full feasibility study. Key near-term objectives include:
- H1 2027: Targeted completion of a full Feasibility Study
- 2026 priorities:
- Advance financing strategy and progress discussions with strategic partners
- Complete acquisition of or access to remaining land surface rights
- Continue permitting advancement under the Czech Building Act toward the final operating permit
- Actively pursue non-dilutive funding through EU and Czech state grants, investment tax credits, and accelerated depreciation opportunities
- Secure additional offtake term sheets and advance customer product testing
A NI 43-101 Technical Report will be filed on SEDAR+ within 45 days of this announcement, with a corresponding JORC report to be lodged with the ASX shortly thereafter.
"With no operating manganese mines in Europe and as the only integrated high purity manganese producer in Europe and North America, the Chvaletice Manganese Project is uniquely positioned to become a cornerstone of Europe's emerging battery materials supply chain."
— Rick Anthon, Chairman, Euro Manganese
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Investment Case: Why Investors Should Keep Watching Euro Manganese
The Euro Manganese Chvaletice Project positive PEA results crystallise an investment case across several dimensions that are difficult to replicate.
Unique Supply Position
No operating manganese mines exist in Europe. Euro Manganese describes Chvaletice as the only near-term, integrated high-purity manganese project in Europe and North America — a position of considerable strategic advantage.
Demand Tailwinds
HPMSM demand is driven by electric vehicle battery production and grid-scale energy storage — two of the fastest-growing industrial sectors globally. The market study underpinning the PEA (Marketeye.org, April 2026) projects demand growth across the project life.
Pricing Durability
The PEA uses conservative long-term pricing of $2,888/tonne HPMSM, and the project nevertheless generates a $492 million post-tax NPV and a 13.8% post-tax IRR on those assumptions.
Metallurgical De-risking
Years of test work, three semi-continuous pilot plant runs, and a demonstration plant continuous operation programme completed in October 2024 provide unusually strong technical foundations for a PEA-stage project.
Capital-Efficient Structure
The phased construction approach limits initial capital to $627.5 million for Phase I, with Phase II capex of $197.8 million designed to be funded from early cash flows, reducing dilution risk considerably.
Advancing Permitting and By-product Upside
With most key permits secured and a favourable ESIA in hand, the permitting pathway is well progressed. Furthermore, the new MgCO3 revenue stream adds incremental economics not previously captured in the project model — a welcome addition to the overall financial case.
"Euro Manganese has positioned itself as the most advanced high-purity manganese developer in Europe, with a technically de-risked project, meaningful economic returns under conservative assumptions, and a phased development approach designed to manage capital risk and align investment with cash flow. With a feasibility study targeted for H1 2027 and customer engagement actively underway, the Chvaletice Manganese Project is approaching a significant inflection point for investors tracking the battery materials supply chain."
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