Crow Wing Power Board Statement Regarding

Emily Manganese Project

May 19, 2023

The Crow Wing Power Board of Directors is aware that many of Crow Wing Power’s members have heard about the Cooperative’s investment in a manganese deposit near Emily, Minnesota. The following is a summary of the Manganese Deposit Project:

What Is Manganese?

Manganese is a mineral which has many commercial and industrial uses. Manganese is critical in the production of steel, various ferroalloys, chemicals, fertilizers, paints, medical supplies and is a major chemical component in both standard batteries and lithium-ion batteries.

How Did The Cooperative Become Involved In The Manganese Deposit?

In 2006, one of Crow Wing Power’s subsidiaries sold a proprietary technology for a healthy profit, and the Board wanted to put that money to work to benefit the Cooperative. The Board identified a manganese deposit in our region as a potential investment opportunity for these funds. In 2008, one of Crow Wing Power’s subsidiaries was able to purchase some of the land and mineral rights in the manganese deposit. In 2019 another subsidiary, People’s Security Company, purchased some additional land over the manganese deposit as well. Over the past ten years, numerous technical studies have been prepared on the manganese deposit.

In 2019, the Board signed a lease and sales agreement with North Star Manganese, Inc (NSM), an exploration and mining company, to advance the development of the Emily Manganese Project. NSM has the discretion to determine how to explore and evaluate any mineral development, including how to mine, process, and sell any minerals or mineral products. NSM is responsible for obtaining permits and licenses, and complying with all governmental regulations.

How Much Is The Cooperative Spending On The Project?

The agreements outline that NSM handles all expenses associated with the manganese deposit project. Any amounts that Crow Wing Power or its subsidiaries might contribute to the cost, like real estate taxes or utility bills, are reimbursed by NSM in full. This means that no new Cooperative investment dollars will ultimately go into the project.

The agreements between NSM and Crow Wing Power’s subsidiaries are confidential due to the sensitive information contained in them. However, the Board can share the following details:

  • NSM pays all costs associated with the project. The manganese deposit will be explored and potentially developed at no cost to Crow Wing Power or its subsidiaries, whether a mine is ultimately developed or not.
  • If NSM begins mining operations, Crow Wing Power’s subsidiaries will begin to generate an income stream once NSM accepts delivery of any mined ore from the Crow Wing lands. Crow Wing Power’s subsidiaries will also share in the profitability of the sale of the refined manganese products.
  • All payments due under the lease and sales agreement will go to Crow Wing Power’s subsidiaries. No Board members, officers, or employees of Crow Wing Power or any of its affiliated businesses have any right, financial benefit to gain or property interest in the Manganese Project.

If a mine is developed, the subsidiaries stand to make a good profit and recover the initial investment in the deposit from back in 2008. Since the subsidiaries are exclusively owned by Crow Wing Power, this will be good for the Cooperative as a whole.

What About The Minnesota Attorney General’s Office?

A group of the Cooperative’s members has asked the Minnesota Attorney General’s office to seek clarification from the Cooperative on a few details regarding the Emily Manganese project. The Cooperative’s legal counsel has assisted the Board in developing and communicating transparent and accurate responses to these questions.

What Happens Next?

Exploring for ore and potentially developing a mine is a long and complex process that will take an unknown amount of time to complete. The Board receives periodic updates from NSM regarding the status of the project. Much of the information the Board receives is confidential, since it involves testing and other economic considerations that could give NSM a competitive advantage in the manganese marketplace.

Currently NSM is conducting it first drilling program on the deposit, including drilling on some of the Crow Wing Power’s subsidiaries lands.  Information on the results of the drilling, and other activities associated with the deposit, will be made public by NSM on a periodic basis. 

Over the next few years, NSM will be assessing the extent and location of the deposit, perform geotechnical and metallurgical testing to ensure that a mine is economically viable, and navigate the governmental permitting process. To support those efforts, Crow Wing Power will work collaboratively with NSM, state agencies, and any other regulatory bodies, as necessary.

This will take time, and the Board appreciates the public’s patience. The Board looks forward to sharing news about the project as future checkpoints are reached and as information becomes available.

 

Approved by the Crow Wing Power Board of Directors May 18, 2023.