Euro Manganese has amended its financing agreement with Orion Resource Partners for the Chvaletice high-purity manganese project in the Czech Republic, converting a development-stage loan facility into a project revenue royalty structure.
The revised agreement was announced on 10 July and remains subject to Euro Manganese completing an agreed equity fundraising condition. Under the amended terms, the outstanding loan balance and accrued interest of US$23.53 million, calculated as of 31 March 2026, will automatically convert into a royalty linked to project revenue.
Loan repayment obligation replaced by revenue royalty
The debt conversion removes Euro Manganese’s obligation to repay the outstanding Orion facility and eliminates exposure to a development-stage loan whose interest rate had increased from 12% to 14%. Following conversion, Orion will receive a royalty equivalent to approximately 2.29%–2.46% of Chvaletice project revenue.
The final royalty percentage will depend on realised prices for the project’s planned high-purity manganese products. The royalty is expected to remain in effect throughout the project’s estimated 26-year operating life.
Orion financing package revised
As part of the restructuring, the previously undrawn US$70 million portion of Orion’s original financing package has been cancelled. Orion will retain an option to purchase approximately 20%–22.5% of Chvaletice production for a period of 10 years following first delivery.
The revised agreement also provides that Orion’s project security will be subordinated to future senior project-finance debt. This change is intended to support future discussions with potential senior lenders by placing Orion’s security position behind new project-financing arrangements.
Chvaletice targets European manganese supply chain
The Chvaletice project is designed to reprocess historical mine tailings to produce high-purity electrolytic manganese metal (HPEMM) and high-purity manganese sulphate monohydrate (HPMSM). Euro Manganese is developing the operation as a domestic European source of battery-grade high-purity manganese products. The project is based on recovering manganese from existing tailings rather than conventional mining of a new ore body.
Financing structure changes project economics
The amended agreement improves Euro Manganese’s short-term liquidity position by removing a fixed debt repayment obligation and reducing refinancing pressure during the development phase. Тhe restructuring does not provide the construction capital required to build the commercial-scale operation.
Instead, the company has replaced a balance-sheet liability with a long-term project-level revenue obligation. Because the royalty is calculated from revenue, payments to Orion would occur before operating margins, debt servicing and shareholder distributions are considered. The total value transferred through the royalty structure could exceed the converted debt amount if manganese prices or production volumes outperform the project’s base assumptions.
Future financing must account for royalty obligations
The subordination of Orion’s security is expected to support negotiations for senior project financing. Future lenders will need to incorporate the royalty arrangement and retained offtake option into project-finance assessments, including debt-service coverage calculations, security structures and downside price scenarios. The Chvaletice financing restructuring changes the project’s capital structure as Euro Manganese continues preparations for development of its high-purity manganese production facility in the Czech Republic.
