Euro Manganese has the right stuff, the right spot, at the right time: Canaccord Genuity

Euro Manganese Inc (ASX:EMN) (CVE:EMN) has received a price target upgrade from Canaccord Genuity as it focuses on advancing the evaluation and development of the Chvaletice Manganese Project in the Czech Republic.

The project entails re-processing a significant manganese deposit hosted in historical mine tailings, strategically located in the heart of Europe, about 90 kilometres east of Prague.

Canaccord Genuity, the capital markets division of Canaccord Genuity Group Inc (TSE:CF), has upgraded its price target for Euro Manganese to 55 cents from 50 cents while maintaining a speculative buy rating.

The following is an extract from Canaccord’s research update:

More manganese please

Manganese offers niche market opportunity[hhmc]

Following Tesla's battery day we continue to digest the presentation, and while the conversation has largely focussed on lithium, we believe it is worth reflecting on other materials that will be required to deliver the company's ambitions. The cathode presentation highlights three chemistries and claims to be moving towards a two-thirds nickel, one-third manganese chemistry for its long range vehicles. We highlight EMN, which is developing the Chvaletice Manganese project in the Czech Republic, and what differentiates it in the manganese and LiB supply chains.

Manganese market snapshot[hhmc]

The global manganese market is dominated by demand from the steelmaking industry which accounts for 90% of demand, the remaining 10% (c.2mtpa) being consumed in specialty metal markets. Of the 2Mtpa, c.400ktpa is used in disposable alkaline batteries with only c.50kt used in LiB). Like the lithium market, there are strict quality requirements to produce High Purity Electrolytic Manganese Metal (HPEMM) and High Purity Manganese Sulphate Monohydrate (HPMSM), resulting in a price premium and a barrier to entry.

Look to Europe for the next leg of LiB growth[hhmc]

As we recently highlighted, Europe has become a focus for the EV market, with the EU on track to sell more EVs than China by the end of the year. In 2017, the EU established the European Battery Alliance (EBA) to address what it saw as an Asia-controlled supply chain. Since then, battery investments in Europe have lifted to c.€100b, a thirty-fold increase. Following the success of the EBA, in late September this year the EU launched the European Raw Materials Alliance which places a strong emphasis on electric vehicles/clean tech, ESG practices in material sourcing and supporting Europe's industrial raw material capability. We expect European-focussed producers will benefit from access to cheap debt and preferential selection with OEMs for off-take and partnerships.

Chvaletice the right stuff, the right spot, the right time[hhmc]

EMN's Chvaletice mRead More – Source




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