ELEMENT 25 LIMITED — Capital/Financing Update 2021

Oct 27, 2021

The future has always been electric...

ASX ANNOUNCEMENT 28 OCTOBER 2021

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Battery Grade HPMSM Processing Breakthrough Further Reduces Complexity and Cost

• Refinement and optimisation of flowsheet results in significant improvements.

• Testing conducted on Butcherbird run-of-mine ore confirming suitability as feed.

• Previously announced organic, low-carbon leaching reagent test conditions have been further optimised with significant improvements over previous flowsheet.

• Tests demonstrate major reduction in reagent consumption and process complexity relative to previous highly efficient flowsheet design.

• Modifications anticipated to result in lower capital and operating costs .

• Optimisation work has reduced residue volumes by approximately 50%, further improving costs and environmental outcomes.

• Significant improvements in leach selectivity of certain elements improves co-product opportunities.

• Repeatable extraction of 95-98% confirmed in multiple tests using various reaction parameters to optimise leach conditions.

Element 25 Limited ( E25 or Company ) ( ASX:E25 ) is pleased to confirm that leaching optimisation tests using run-of-mine concentrate product the Company’s 100% owned world class Butcherbird Manganese Project ( Project ) has been yielded a number of significant breakthroughs in terms of flowsheet design.

Following the Company’s release of 26 August 2021, the High Purity Manganese Sulphate Monohydrate ( HPMSM ) development team has made significant progress in optimising the leach process using an alternative organic, low carbon intensity reagent with reduced requirement for secondary reagents.

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COMPANY SNAPSHOT

Market Summary ASX code: E25 Shares on issue: 149M Share price: $1.85

Board of Directors: Seamus Cornelius Chairman Justin Brown MD John Ribbons NED

Element 25 Limited is developing the world class Butcherbird Manganese Project in Western Australia to produce high quality manganese concentrate and high purity manganese products for traditional and new energy markets.

Element 25 Limited

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E25 Managing Director Mr Justin Brown commented, “ The optimisation work completed in this phase represents a genuine breakthrough in terms of simplifying the flowsheet and significantly reducing regent consumption and residue production both key drivers of production costs. The composition of the residue stream has also been improved whereby the Company is able to have meaningful conversations with parties around repurposing the residue for consumption in complementary processes rather than simply dumping the material in the landscape, an important improvement in terms of environmental outcomes.”

The optimisation work is focussed on the production of HPMSM for new energy vehicles ( NEV ) from run-of-mine concentrate from the simple low-cost beneficiation process currently in use at the Project which has now been further confirmed as suitable feedstock.

As in previous test work using material from the Project, high extraction rates of up to 98% were achieved. Importantly the current round of extraction tests utilised an alternative reagent which offers advantages over that used previously both from an availability, cost, process simplification and carbon intensity perspective, in line with the Company’s objective of becoming a low cost Zero Carbon Manganese[TM] producer.

Test Number	Feed Size	Duration (min)	Pulp Density (%)	Relative Reductant Addition (%)	H2SO4 Stoichiometric Ratio (%)	Feed Ore Conc (%)	Feed Ore Conc (%)	Final Filtrate Conc (mg/L)	Final Filtrate Conc (mg/L)	Liquor Purity (%)	Manganese Recovery (%)
						Mn	Fe	Mn	Fe	Mn	Mn
HY11096	500µm	180	20.1	150	100	33.7	10.5	86,800	13	96.3%	97.9%

Table 1: Parameters and results for test number HY11096.

The test results also show significantly improved selectivity over impurities compared to the previous test results released in August 2021, with further optimised extraction and impurity removal during the primary purification stage. This has resulted in a significant step towards optimising (ie minimising) reagent consumption and the complexity of the process.

The changes to the flowsheet have also reduced the volumes of the solid residue streams thereby simplifying solid-liquid separation and reducing the size and complexity of the required mechanical equipment.

The waste solids have a composition made up of predominantly Fe (41.0%) , Al (10.2%) and Si (36.1%) potentially providing opportunities to repurpose this waste material as feedstock in the

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Manganese Ore &
Reagent Slurry
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Element 25 Limited

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manufacture of certain smelter products. If this can be achieved, the E25 process will further reduce the environmental impact of the HPMSM conversion process, potentially enhancing the ESG credentials of the Project. The development team believe that this latest work is of critical importance to maximising the economics of the HPMSM conversion facility and the decision has been taken to ensure that this new breakthrough flowsheet modification is included in the Pre-Feasibility Study ( PFS ) work that is expected to demonstrate the exciting commercial potential around the conversion of the Company’s current concentrate product to battery grade HPMSM to power the electrification of the global vehicle fleet. Timing of the PFS will therefore be delayed until 2022 however the results of this latest work are believed to be material and should be included in the final flowsheet design for the PFS.

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Manganese
Sulphate Solution
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In order to provide the market with initial information on the economic assumptions relating to the HPMSM conversion opportunity, the business development team are considering the publication of a Scoping Study to provide guidance with respect to the magnitude of the economic opportunity presented by the production of HPMSM from Project concentrates. This would be promptly followed by a PFS and subsequent feasibility study to add the necessary detail to underpin offtake and financing discussions.

Project team focus

The business development team is focussing on the next stages of the multi-stage development strategy of the Project including a Stage 2 expansion of the concentrate business followed by a Stage 3 development to convert the concentrate material into high purity manganese sulphate monohydrate ( HPMSM ) for electric vehicle ( EV ) batteries to power the global transition away from fossil fuel powered mobility.

Manganese is emerging as an increasingly important ingredient for EV batteries, with potential supply constraints for nickel and cobalt forcing battery manufacturers to look to high manganese cathodes to produce the vast amount of cathode material required by the EV industry in coming years.[1]

The Project is ideally placed to feed this potential demand, with advanced flowsheet development work undertaken in 2019 and 2020 confirming a simple leach process for E25 ores which, when combined with offsets, will target the world’s first Zero Carbon Manganese[TM] for EV cathode manufacture[2] .

1 https://thenextavenue.com/2021/01/22/svolt-opens-orders-for-its-nmx-nickel-manganese-batteries/ 2 Reference: Company ASX release dated 12 February 2019.

Element 25 Limited

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About the Butcherbird Manganese Project

The Butcherbird Manganese Project is a world-class manganese resource with current JORC resources of more than 263Mt of manganese ore[3] . In May 2020, the Company completed a Pre-Feasibility Study (PFS)[4] with respect to developing the deposit to produce manganese concentrate for export to generate early cashflow with a modest capital requirement[5] . The outstanding economics and low capital hurdle for the first stage of development has allowed the Company to deliver first production from the Project in less than twelve months from the publication of the PFS. The PFS also highlighted the Project’s potential for significant growth beyond the initial Stage 1 production volumes (the studies examined the potential for a 2X and 3X expansion to Stage 1 within 12 months of initial commissioning), and the Company expects to expedite the expansion of the Project.

In addition to the concentrate export business, the Company has completed extensive research & development and laboratory test work into the production of high purity manganese products including battery grade manganese sulphate ( HPMSM ) and High Purity Electrolytic Manganese Metal ( HPEMM ). The work has highlighted that the Butcherbird ores are highly amenable to a rapid, efficient leach process, resulting in a very efficient extraction of the manganese into solution, the key requirement for the cost effective and sustainable production of HPMSM and HPEMM.

The Project straddles the Great Northern Highway and the Goldfields Gas Pipeline, providing turnkey logistics and energy solutions. The Company plans to integrate renewable energy into the power solution over time to target a zero-carbon footprint for the Project, which is expected to also reduce energy costs. A cleaner, lower carbon flowsheet and high penetration renewable energy will place Butcherbird at the forefront of sustainable high purity manganese production.

Mineral Resources

Category	Tonnes (Mt)	Mn (%)	Si (%)	Fe (%)	Al (%)
Measured	16	11.6	20.6	11.7	5.7
Indicated	41	10.0	20.9	11.0	5.8
Inferred	206	9.8	20.8	11.4	5.9
Total	263	10.0	20.8	11.4	5.9

Notes:

• Reported at a 7% Mn cut-off for the Measured and Indicated categories and an 8% Mn cut-off for the Inferred categories.

• All figures rounded to reflect the appropriate level of confidence (apparent differences may occur due to rounding)

3 Reference: Company ASX release dated 17 April 2019.

4 Reference: Company ASX release dated 19 may 2020.

5 Reference: Company ASX release dated 3 December 2020

Element 25 Limited

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Mining Reserve

Based on the results of the Pre-Feasibility Study completed in May 2020, E25 has published a Maiden Ore Reserve for the Project of 50.55Mt in the Proved and Probable categories[6] .

Classification	Tonnes (Mt)	Grade (Mn%)	Contained Mn (Mt)	Recovered Mn (Mt)
Proved	14.2	11.2	1.60	1.31
Probable	36.1	9.8	3.54	2.90
Total	50.3	10.2	5.13	4.21

Justin Brown

Managing Director

Company information, ASX announcements, investor presentations, corporate videos and other investor material in the Company’s projects can be viewed at: http://www.element25.com.au.

Competent Persons Statement

The company confirms that in the case of estimates of Mineral Resource or Ore Reserves, all material assumptions and technical parameters underpinning the estimates in the market announcements dated 17 April 2019 and 19 May 2020 continue to apply and have not materially changed. The company confirms that the form and context in which the competent person’s findings are presented has not been materially modified from the original market announcements.

The information in this report that relates to Exploration Results and Exploration Targets is based on information compiled by Mr Justin Brown who is a member of the Australasian Institute of Mining and Metallurgy. At the time that the Exploration Results and Exploration Targets were compiled, Mr Brown was an employee of Element 25 Limited. Mr Brown is a geologist and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Brown consents to the inclusion of this information in the form and context in which it appears in this report.

This announcement is authorised for market release by Element 25 Limited’s Board of Directors.

6 Reference: Element 25 Limited Reserve Statement addendum to the Annual Report lodged with ASX 30 September 2021.

Element 25 Limited

JORC Code, 2012 Edition – Table 1 – Butcherbird Project Hydrometallurgical Test Work

Section 1 Sampling Techniques and Data

Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
Sampling	•	Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation,	•	Processing product stockpile sampled at 1 hour intervals and combined and split using a riffle splitter to form a daily composite. Testwork conducted on a sub-
techniques		such as down hole gamma sondes, or handheld XRF instruments, etc). These examples		sample.
		should not be taken as limiting the broad meaning of sampling.	•	Samples are pulverized to 75 µm, with elements determined by whole rock XRF
	•	Include reference to measures taken to ensure sample representivity and the		fused bead analysis.
		appropriate calibration of any measurement tools or systems used.
	•	Aspects of the determination of mineralisation that are Material to the Public Report.
	•	In cases where ‘industry standard’ work has been done this would be relatively simple
		(eg ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was
		pulverised to produce a 30 g charge for fire assay’). In other cases more explanation
		may be required, such as where there is coarse gold that has inherent sampling
		problems.
Drilling	•	Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of	•	N/A
techniques		diamond tails, face-sampling bit or other type, whether core is oriented and if so, by
		_what method, etc). _
Drill sample	•	Method of recording and assessing core and chip sample recoveries and results assessed.	•	N/A
recovery	•	Measures taken to maximise sample recovery and ensure representative nature of the
		samples.
	•	Whether a relationship exists between sample recovery and grade and whether sample
		bias may have occurred due topreferential loss/gain of fine/coarse material.
Logging	•	Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and	•	N/A
		metallurgical studies.
	•	Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc)
		photography.
	•	The total length andpercentage of the relevant intersections logged.
Sub-sampling	• •	If core, whether cut or sawn and whether quarter, half or all core taken. If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or	• •	Daily composite is subsampled using a riffle splitter. Sample sizes are considered appropriate for the nature of the test work which is
techniques and		dry.		bench scale lab testing.
sample	•	For all sample types, the nature, quality and appropriateness of the sample preparation technique.	•	Samples are routinely assayed for Mn, Fe, Si, Al, Ca.
preparation	•	Quality control procedures adopted for all sub-sampling stages to maximise
		representivity of samples.
	•	Measures taken to ensure that the sampling is representative of the in situ material
		_collected, including for instance results for field duplicate/second-half sampling. _

Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
	•	Whether sample sizes are appropriate to thegrain size of the material being sampled.
Quality of assay	•	The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.	• •	The samples were assayed by whole rock XRF fused bead analysis. Samples are routinely assayed for Mn, Fe, Si, Al, Ca.
data and	•	For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters
laboratory tests		used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.
	•	Nature of quality control procedures adopted (eg standards, blanks, duplicates,
		external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias)
		andprecision have been established.
Verification of	•	The verification of significant intersections by either independent or alternative company personnel.	• •	All data has been checked internally for accuracy by ALS staff. All data is collected via Surpac following validation.
sampling and	•	The use of twinned holes.	•	No adjustments have been made to assay data.
assaying	•	Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.
Location of data	•	Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource	•	N/A.
points		estimation.
	•	Specification of the grid system used.
	•	Quality and adequacy of topographic control.
Data spacing	• •	Data spacing for reporting of Exploration Results. Whether the data spacing and distribution is sufficient to establish the degree of	•	N/A
and distribution		geological and grade continuity appropriate for the Mineral Resource and Ore Reserve
		estimation procedure(s) and classifications applied.
	•	Whether sample compositing has been applied.
Orientation of	•	Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.	•	N/A
data in relation	•	If the relationship between the drilling orientation and the orientation of key
to geological		mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.
structure
Sample security	•	The measures taken to ensure sample security.	•	Chain of custody of the samples is managed by company representatives and is
				considered appropriate. The samples were delivered directly to ALS Laboratories in
				Perth.
Audits or reviews	•	The results of any audits or reviews of sampling techniques and data.	•	The data and sampling techniques are reviewed internally.

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)

Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
Mineral	•	Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding	•	The Butcherbird Project consists of granted exploration license E52/2350 and Mining Lease Application M52/1074.
tenement and		royalties, native title interests, historical sites, wilderness or national park and	•	The tenure is 100% owned by Element 25 Ltd.
land tenure	•	environmental settings. The security of the tenure held at the time of reporting along with any known
status		impediments to obtaining a licence to operate in the area.
Exploration done	•	Acknowledgment and appraisal of exploration by other parties.	•	The historical exploration data has been collected by Element 25 Limited and has been reported to high standards.
by other parties			•	The methods of exploration and techniques used are considered appropriate for the
				deposit types sought(Mn)
Geology	•	Deposit type, geological setting and style of mineralisation.	• •	Butcherbird is a stratiform sedimentary manganese deposit. The deposits are hosted within the Ilgarari Formation which is generally flat lying with
				gentle open folding in places.
			•	The manganese mineralisation within the ore zones is divided into three distinctive
				units – a high grade manganiferous cap, supergene enriched manganiferous laterite
				and basal shale.
Drill hole	•	A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes:	•	See historical ASX releases regarding the Butcherbird Mineral Resources.
Information		o easting and northing of the drill hole collar
		o elevation or RL (Reduced Level – elevation above sea level in metres) of the drill
		hole collar
		o dip and azimuth of the hole
		o down hole length and interception depth
		o hole length.
Data aggregation	•	In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually	•	N/A.
methods		Material and should be stated.
	•	Where aggregate intercepts incorporate short lengths of high grade results and longer
		lengths of low grade results, the procedure used for such aggregation should be stated
		and some typical examples of such aggregations should be shown in detail.
	•	The assumptions used for any reporting of metal equivalent values should be clearly
		stated.

Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
Relationship	•	If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.	•	N/A. The samples are run-of-mine production samples
between	•	If it is not known and only the down hole lengths are reported, there should be a clear
mineralisation		statement to this effect (eg ‘down hole length, true width not known’).
widths and
intercept lengths
Diagrams	•	Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be	•	NA
		limited to aplan view of drill hole collar locations and appropriate sectional views.
Balanced	•	Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be	•	NA
reporting		practiced to avoid misleading reporting of Exploration Results.
Other	•	Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey	•	NA
substantive		results; bulk samples – size and method of treatment; metallurgical test results; bulk
exploration data		density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.
Further work	•	The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or large-scale step-out drilling).	•	The next phase of work will focus on further metallurgical testwork.
	•	Diagrams clearly highlighting the areas of possible extensions, including the main
		geological interpretations and future drilling areas, provided this information is not
		commercially sensitive.