ELEMENT 25 LIMITED — Capital/Financing Update 2024

Sep 23, 2024

ANNOUNCEMENT | 24 SEPTEMBER 2024 | ASX: E25

E25’s HIGH-PURITY MANGANESE PROJECT SELECTED FOR US$166M GRANT UNDER U.S. DoE GRANT PROGRAM

Element 25 Limited ( E25 or the Company ) ( ASX: E25 ; OTCQX: ELMTF ) is pleased to announce it has been selected for award negotiations for a US$166 million grant from the U.S. Department of Energy ( DoE ) under the Battery Materials Processing Grant Programme. This funding will support the construction of its proposed battery-grade high-purity manganese sulphate monohydrate ( HPMSM ) facility in Louisiana, USA. The grant award is in addition to the US$115 million already committed by offtake partners General Motors LLC ( GM ) and Stellantis N.V. ( Stellantis ).

HIGHLIGHTS:

• E25’s planned HPMSM facility in Louisiana selected for award negotiations for US$166 million grant from the U.S. DoE.

• Project selected under DoE’s Battery Materials Processing Grant Program.

• E25 and DoE expect to finalise a binding funding agreement for the grant as soon as practicable.

• E25 has previously secured financing and offtake from GM and Stellantis including US$115 million in project funding.

The grant application was submitted under the DoE’s Battery Materials Processing Grant Programme of the Office of Manufacturing and Energy Supply Chains, which is funded by the Bipartisan Infrastructure Law. The program is designed to provide grants for battery materials processing to ensure that the United States has a viable battery materials processing industry. The grant forms a key element of E25’s financing strategy, and the execution team will now work to finalise the project schedule, subject to grant finalisation.

E25 plans to produce HPMSM from manganese ore sourced from its Butcherbird mine in Western Australia and shipped to Louisiana. It has developed an innovative, advanced processing flowsheet to convert Butcherbird manganese concentrate into HPMSM, a critical raw material for the manufacture of lithium-ion batteries. The proprietary flowsheet reduces energy consumption, virtually eliminates waste and delivers the lowest reported carbon intensity HPMSM globally[1] .

Element 25 Managing Director Justin Brown said: “This grant from the U.S. Department of Energy, once finalised, represents a major milestone in our development of the Louisiana HPMSM Project and adds to the commitments already received from GM and Stellantis which include both offtake and financing agreements in support of the refinery. The grant will fund up to half of the construction capital costs for the project and when combined with existing commitments, will propel the project towards financial close and commencement of construction, creating long-term jobs for Louisiana and delivering ethically sourced, IRA compliant HPMSM to our customers.”

1 Company ASX Release dated 21 February 2023

Element 25 Limited

ABN: 46 119 711 929 T: +61 8 6375 2525 E: admin@e25.com.au W: element25.com.au

E25’s process offers a pathway to the delivery of expanding volumes of ethically sourced, traceable, transparent HPMSM supply to US markets. E25 plans to produce up to 135Kt per annum of HPMSM for US electric vehicle ( EV ) supply chains[2] in a facility that is a first-of-its-kind processing facility in Louisiana.

PROJECT FINANCING STRATEGY

In mid-2023, E25 secured a US$85 million loan under an agreement with GM, whereby E25 will, in turn, supply up to 32,500 metric tons of manganese sulphate annually for GM’s Ultium battery plant requirements, which added to the commitments from Stellantis that include take-or-pay offtake commitments for 45ktpa of HPMSM over five years and U$30 million of project funding[3] .

The two transactions total U$115M in financing support for the project, providing an important cornerstone to the Company’s project financing activities. E25 has been co-ordinating a process to secure the balance of funding for the project’s construction costs, which were estimated in the Company’s April 2023 Feasibility Study at US$289 million[2] .

DoE’s Battery Materials Processing Grants Program is designed to provide up to US$3 billion in grants for battery materials processing to ensure that the United States has a viable battery materials processing industry. Funds can also be used to expand domestic capabilities in battery manufacturing and enhance processing capacity.

ABOUT THE HPMSM LOUISIANA PROJECT

Element 25 (Louisiana) LLC ( E25LA ) plans to build and operate a first-of-its-kind, environmentally sustainable refining facility in the Baton Rouge area, Louisiana, to produce HPMSM, a critical raw material in lithium-ion batteries.

Element 25 Louisiana will construct a 230,000 square-foot (~21,000m[2] ) HPMSM refining facility that will employ an innovative process to produce approximately 71,650 tons (65,000 metric tonnes) of HPMSM annually from manganese ore sourced from Element 25’s Butcherbird manganese mine in Western Australia ( Project ). It will be one of the first commercial facilities to produce HPMSM in the U.S., reducing current dependency on Chinese sources. The project will create hundreds of highly-skilled, permanent jobs for Louisianans.

Element 25 Louisiana has secured offtake and funding agreements, including five and seven-year supply agreements with global automakers GM and Stellantis.

Element 25 Louisiana controls all intellectual property to develop and operate the HPMSM facility. It also has developed a proprietary process to remove solid waste residue as byproducts, which each have industrial applications, thus eliminating the need for a solid waste landform.

2 Company ASX Release dated 12 April 2023 3 Company ASX Releases dated 9 January 2023 and 26 June 2023

Element 25’s efficient process permits a mine-to-market carbon footprint that is approximately 67% lower than competitors in China[4] . The proposed site is located in the Baton Rouge area, and is proximal to raw materials suppliers, abundant utilities, and infrastructure, including ports and roads, which also boosts the Project’s viability and bolsters the local economy surrounding the facility.

Project commissioning and development will be supported by multiple U.S.-based companies, including those based in Louisiana.

COMMUNITY BENEFITS PLAN

The Project is supported by local communities, stakeholders, and the State of Louisiana, which has approved a substantial incentives package to support the Project in acknowledgement of its significant local benefits. The Project is committed to supporting the local economy, including a desire to recruit workers from the oil and gas industry and a recently closed refinery that can provide a skilled workforce to the facility.

The Project is committed to the long-term success of the community by creating apprenticeships for 5% of the workforce that will allow for on-the-job training. The Project is expected to create 400 jobs during construction and 144 full-time ongoing roles once production commences.

ABOUT ELEMENT 25

Element 25 is an ASX-listed company ( ASX: E25 ) that operates the world-class 100%-owned Butcherbird Manganese Project in Western Australia and is currently undertaking activities to expand production to approximately 1.1Mtpa of medium-grade high silica manganese ore for use in traditional and new energy markets[5] .

E25 is also commercialising innovative proprietary technology to produce battery-grade high-purity manganese sulphate monohydrate ( HPMSM ) for use in Electric Vehicle ( EV ) battery manufacturing. The Company plans to build its first HPMSM refinery in Louisiana, USA, to produce raw materials for the US EV market, in partnership with General Motors LLC ( GM ) and Stellantis N.V. ( Stellantis )[6] . E25 aims to become an industry-leading, world-class, low-carbon battery materials manufacturer.

The Louisiana refinery is planned as the first of several HPMSM facilities planned for development under E25’s “Design One Build Many” commercialisation strategy which envisages a hub and spoke model, with ore supplied from E25’s Butcherbird Mine in Western Australia to supply processing facilities in key regional markets to supply HPMSM to the rapidly growing EV servicing key global regions.

4 Company ASX Release dated 21 February 2023 5 Company ASX Release dated 23 January 2024

6 Company ASX Releases dated 9 January 2023 and 26 June 2023

The addition of a potential HPMSM refinery site in Chiba prefecture in Japan in partnership with Nissan Chemical is another exciting step forward in realising the Company’s strategic plan.

Company information, ASX announcements, investor presentations, corporate videos, and other investor material in the

Company’s projects can be viewed at: www.element25.com.au.

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

Justin Brown		Media Inquiries:
Managing Director		Nathan Ryan
Email: admin@e25.com.au		Email: nathan.ryan@nwrcommunications.com.au
Phone: +61 (8) 6375 2525		Phone: +61 (0) 420 582 887

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 announcement dated 29 September 2023 continue to apply and have not materially changed. The Company confirms that it is not aware of any new information or data that materially affects information included in previous announcements, and all material assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed.

Investor Relations Disclaimer

Certain Statements included in this announcement are forward-looking statements concerning Element 25 Limited and its subsidiaries (E25) and its operations, economic performance, financial condition, plans and expectations. Without limiting the foregoing, statements including the words “believes”, “anticipates”, “plans”, “expects”, “could”, “potential”, “should” and similar expressions are also forward-looking statements.

All forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those expressed or implied, including, without limitation, business integration risks; uncertainty of production, development plans and cost estimates, commodity price fluctuations; political or economic instability and regulatory changes; currency fluctuations, the state of the capital markets, uncertainty in the measurement of mineral reserves and resource estimates, E25’s ability to attract and retain qualified personnel and management, potential labour unrest, reclamation and closure requirements for mineral properties; unpredictable risks and hazards related to the development and operation of a mine or mineral or mineral deposit or mineral processing facility that are beyond E25’s control, the availability of capital to fund all of the Company’s projects and other risks and uncertainties.

You are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used. E25 cannot assure you that actual events, performance or results will be consistent with these forward-looking statements, and management’s assumptions may prove to be incorrect. E25’s forwardlooking statements reflect current expectations regarding future events and operating performance and speak only as of the date hereof and E25 does not assume any obligation to update forward-looking statements if circumstances or management’s beliefs, expectations or opinions should change other than as required by applicable law. For the reasons set forth above, you should not place undue reliance on forward-looking statements.