Dr. Matthew James reports

EURO MANGANESE AWARDS EPCM CONTRACT TO WOOD AUSTRALIA AND PROVIDES UPDATE ON PROJECT PERMITTING

Euro Manganese Inc. has awarded the engineering, procurement and construction management (EPCM) contract for its Chvaletice manganese project in the Czech Republic to Wood Australia Pty. Ltd.

The company also provides an update on the permit approval process for the project.

EPCM contract award

The company has selected Wood as its EPCM partner following a rigorous selection process. Five high-quality bids were submitted by international EPCM firms in late 2022. Two firms were shortlisted in early 2023 based on cost of service as well as their proposed project schedule, technical and engineering capability, EU (European Union) experience, team skillset, and overall execution strategy. The company selected Wood as the preferred contractor in April, 2023, and has now concluded the contract negotiations and received board approval to award the contract to Wood.

The contract is cost reimbursable and is structured in two phases (outlined below), with an approval stage gate between each phase, as well as after the gap analysis in phase 1. Completion of phase 1 is anticipated to take approximately 12 months, with a final investment decision (FID) to be made prior to commencement of phase 2. Receipt of FID from the board requires securing outstanding permits and project finance (debt and equity).

Phase 1 -- front-end engineering design (FEED)

The FEED phase includes an initial two-month gap analysis and in-depth review of the definitive feasibility study (DFS) deliverables, including the test work and flowsheet development conducted by the company over the last seven years.

Following completion of the gap analysis, other key deliverables to be derived over the remaining 10 months during phase 1 include: completion of value engineering; identification of long-lead-time equipment; vendor engagement, selection and firm pricing for major equipment items and packages; total installed capital cost estimate to AACE Class 3 estimate accuracy (plus/minus 10 per cent); project implementation strategy; a baseline schedule for the EPCM phase; and preparation of construction permit documentation.

Phase 2 -- engineering, procurement and construction management

Upon making the final investment decision, the company will enter into the EPCM phase of the contract once conditions precedent are satisfied. Wood will provide overall project and construction management services throughout the EPCM phase of the project, which includes detailed design, procurement, construction and commissioning.

Update on permitting

The key outstanding permits for the Chvaletice project include: the environmental social impact assessment (ESIA) approval, followed by the land planning permit and then the construction permit.

ESIA

The Czech Ministry of Environment received comments from 14 relevant authorities on the ESIA, which was submitted in December, 2022. All but one of the authorities approved the relevant studies, signalling a positive perception of the project by regulators. The ministry has returned the ESIA to the company to address comments from the authority yet to approve the ESIA, related to noise abatement. The company expects to address these comments without an effect on the timeline to FID.

While the Chvaletice project's anticipated noise levels are within legislative limits for an industrial project, as neighbouring operations adjacent to the project site have existing noise emissions, the cumulative effect marginally exceeds permitted noise levels at the measurement points, located at the closest residential areas.

The revision of the noise study within the ESIA has also been requested to consider new noise legislation related to traffic noise coming into force in July, 2023. The details of this new legislation were released after the project ESIA was completed and submitted.

The necessary work to address the comments related to noise have already begun, and the revised ESIA is expected to be submitted in August, 2023, when the ESIA process can then continue. The company anticipates the issuance of a positive decision on the revised ESIA before the end of 2023.

Land planning permit

Upon approval of the ESIA, the land planning permit can be submitted. The documentation for this application is substantially complete and will be finalized upon receipt of the conditions in the approved ESIA. The land planning permit approval timeline is typically three months once submitted, resulting in an anticipated approval by mid Q2 2024.

Construction permit

As highlighted above, the construction permit documentation is a deliverable of the FEED phase and is expected to be submitted at the end of Q2 2024. The permit approval timeline for the construction permit is three months, resulting in an anticipated approval by Q3 2024.

Dr. Matthew James, president and chief executive officer of Euro Manganese, commented: "Awarding the EPCM contract to Wood is another key milestone for the company. It is the result of an extensive and robust selection process, and I am very pleased to be partnering with such a high calibre, tier 1 engineering firm. We look forward to building a world-class facility to produce high-purity manganese, an essential component in lithium-ion batteries for EV [electric vehicle] vehicles. Together, we are working to advance the global energy transition.

"We fully respect the robustness of the ESIA process and are committed to minimizing project impacts to the surrounding communities. I am confident that we will move forward to a successful conclusion given the positive statements received from the other stakeholders."

About Euro Manganese Inc.

Euro Manganese is a battery materials company focused on becoming a leading, competitive and environmentally superior producer of high-purity manganese for the electric vehicle industry, and other high-technology applications. The company is advancing development of the Chvaletice manganese project in the Czech Republic, which is a unique waste-to-value recycling and remediation opportunity involving reprocessing old tailings from a decommissioned mine. The Chvaletice project is the only sizable resource of manganese in Europe, strategically positioning the company to provide battery supply chains with critical raw materials to support the global shift to a circular, low-carbon economy.

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