“We have an ever-increasing portfolio of assets in Brazil in the state of Mato Grosso, and we have others coming.”
There are also potential assets the company is researching in Zambia and Morocco, a signal of the company’s broader international aspirations and its belief that globally, manganese is currently presenting investors with a real opportunity.
The first stop on this global path to growth is Brazil, where Maxtech projects are at their most advanced.
Here Maxtech has four claims that add up to almost 40,000 hectares in total, and it has a strategic partnership too, in the shape of Maringa Ferro, a locally established producer of manganese and manganese silica that operates five furnaces with a capacity of 80,000 tonnes per year.
“They can buy everything in-country that we can produce,” says Wilson. And this is no mere start-up. Brazil is one of the world’s major mining destinations, particularly known for its iron ore, which is used in the manufacture of steel. So too is manganese, and Maringa-Ferro was founded back in 1946 to produce it.
“They like to review and support us,” says Wilson. And it’s certainly a handy name to have on board when it comes to negotiating new property deals.
Not that Maxtech is up against much competition at the moment. In the sphere of manganese Maxtech virtually has the field to itself.
“There are little or no peers,” says Wilson, and he’s not just talking about Brazil either. Around the world there are only a handful of pure play manganese companies, and the majors that produce the metal spend very little time talking about it.
“We see it as a rich market opportunity,” says Wilson. “90% of the manganese produced is used in the fabrication of steel alloys, but there’s also some used in fertilizers.”
Given that state of affairs, it’s clear that manganese is a play on the world economy, and that’s not doing too badly at the moment.
So Maxtech looks well poised.
At the moment, the spot price of manganese is broadly tied up by a handful of the major producers like Glencore (LON:GLEN).
But there’s a sense in which that’s academic to Maxtech because it has one key advantage over any and all competition: grade.
To be sure, the Maxtech projects are relatively small but they do offer significant margin, because costs are low and grades are high.
The small operations that Maxtech becomes involved with involve digging out high grade material at surface with a backhoe. A sifter is used and the soil is put back where it came from.
“There are no chemicals involved in our projects, nothing,” says Wilson.
“It offers great margin and we’re the aggregator down there. It’s not Glencore’s job to go round and talk to farmers – they’ll just come and be the off-take partners. Everyone’s trying to dig this up themselves, but no-one’s really brought it all together.”
So what is the scale of the opportunity we’re talking about?
First off, it’s worth noting that high grade material of the kind Maxtech is looking to sell generally trades at around 30% above spot.
But assuming that Maxtech is able to bring an initial 40,000 tonnes-plus of ore to the market, the overall revenue per year could be substantial. And Brazil is just for starters.
The ore in Zambia is equally high grade, and Wilson is getting ready to replicate his model in other countries too, including, potentially, Argentina and Spain.
“The strategy of the company is always to have an off-take partner,” says Wilson.
There’s an Indian buyer already lined up for the Zambian ore who won’t take product from other local producers because the grade is too low.
It’s a model that Wilson refers to as being “reverse-engineered.” The customers are put in place before the production begins, and that’s only possible where grade is enough to turn the heads of some pretty big names.
But it’s a model that could end up providing investors with some very healthy returns indeed.