Evolution Energy Minerals
Primary ticker: ASX:EV1
Stage of development: Exploration, Development, Production
Primary minerals: Graphite
Project to promote: Chilalo Graphite Project
Project location: Tanzania
Website: evolutionenergyminerals.com.au
EV1 owns the Chilalo Graphite Project in Tanzania. Chilalo is a development-ready high-margin coarse flake graphite project. EV1 has binding offtake agreements with world’s leading producers of battery anodes (BTR New Materials) and expanded graphite products (Yichang Xincheng Graphite Co Ltd – YXGC) covering 90% of Chilalo product (coarse flake and fines).
In addition to a binding offtake contract for 100% of Chilalo’s fine flake production, BTR, whose customers include CATL, Panasonic, SK, LG Chem, BYD, Samsung etc., holds 8% of EV1 and has signed an MOU with the Company to investigate the potential to use BTR’s battery anode processing technology to build a battery anode production plant.
Chilalo is fully permitted and held under a Mining Licence through an executed Framework Agreement with the Tanzanian Government. The Company is currently progressing negotiations with potential financiers interested in providing debt finance for construction of the project, which is slated for an investment decision in 2025.
Cash: AUD $2.946M
Debt: NIL
Major Shareholders:
Arch Sustainable Resources GPCO Limited <Arch Sustainable Res Fund LP> – 25.3%
Marvel Gold Limited – 13.9%
BTR New Material Co Ltd – 7.2%
Deutsche Balaton Aktiengesellschaft – 6.3%
Auramet Capital Partners Lp – 2.7%
Management Ownership – <1%
Financials
Management Profile
George Donne – Chief Executive Officer
Mr Donne is a mining professional with over 20 years’ experience in corporate management, private equity and investment banking. He has held multiple senior executive roles specialising in business development and corporate financing including with Eurasian Resources Group, one of the world’s largest cobalt producers, and Giyani Metals, an African focused battery materials developer. Mr Donne was also Senior Investment Professional at Greenstone Resources mining PE Fund and part of JP Morgan’s Metals and Mining investment banking team in London. He also holds a CFA Certificate in ESG (Environmental, Social and Governance) Investing.
What is your rationale for taking part in 121 Mining Investment?
Update and engage with equity and strategic investors on the recent developments at EV1 and project development plans.
What recent news would you like to highlight to investors attending?
22 November 2024 – Commencement of Chilalo Siteworks
EV1 announced the commencement of early works at the Chilalo Graphite Project site in Tanzania. This significant milestone includes the construction of an access road and the pre-clearing of the plant site, marking the beginning of preparations for development of the Project.
The commencement of early works for the Project has been facilitated by the transfer of land to Evolution after the payment of all compensation under the Resettlement Action Plan (RAP).
The access road will facilitate efficient transportation of materials and personnel to and from the site, ensuring smooth progress as we move forward with the Project. The pre-clearing of the plant site is a crucial step in preparing the area for subsequent construction phases, laying the groundwork for future development.
These early works are expected to be completed before the end of the year, paving the way for the next stages of development. Evolution remains committed to engaging with local communities and stakeholders throughout the life of the Project, ensuring that our activities contribute positively to the region.
29 October 2024 – Chikundo Cu-Pb-Zn VHMS Prospect
EV1 announced the identification of Copper-Lead-Zinc mineralisation, named the Chikundo VHMS prospect, within the Chilalo Graphite Project area (the Project) in southeast Tanzania.
The discovery followed the identification of copper minerals in artisanal workings, where local miners have been chasing the copper mineral malachite. These workings are located approx. 4.5km southwest of the proposed Chilalo plant site and have been developed by locals to about 8-10m depth.
There is clear evidence of copper mineralisation within the walls of the artisanal workings and as well as possible chalcopyrite and covellite in rock chips collected. The Company has recently collected some face samples from these working and they have been sent to SGS laboratories in Mwanza for analysis. The results are currently pending.
What are your key goals for the next 3, 6 and 12 months?
3 Months:
– Completion of initial siteworks at Chilalo including site power connection
– Internal resource definition on Chilalo extensions and Chikundo VMS
6 Months:
– Completion of engineering package for Chilalo
– Commencement of resettlement housing construction at Chilalo
– Receiving project finance term sheets from interested financiers
12 Months:
– Completion of financing solution for Chilalo
– Final Investment Decision
– Completion of resettlement housing at Chilalo
– Start of project construction
What do you see as the key risks and challenges facing your company at the moment and how are you overcoming these?
Equity markets for mining and battery materials projects are challenging which will impact securing full financing package for Chilalo. However, EV1 is supported by a number of key shareholders, including ARCH Sustainable Resources Fund and BTR
Market prices for all battery raw materials, including graphite, have suffered as the pace of growth in electric vehicle sales has slowed outside of China than anticipated. However, while the medium/long-term demand dynamics for battery materials is still unquestionable strong, Chilalo’s coarse flake under binding offtake with YXGC is a premium product and not exposed to EV demand cycles.
What do you think makes your company such a compelling investment?
1) Graphite project that will make an excellent margin selling coarse concentrate
2) Product validation from offtakers who are global leaders in their industry (battery anodes and expandable graphite)
3) Unique US downstream strategy using proven technology into a rapidly growing market in an IRA-compliant way
4) US IRA and China’s export controls have painted a perfect storm for graphite mines or anode processing outside of China
What are the top 3 key investor takeaways?
– High-quality and development-ready graphite project that makes margins at today’s graphite prices (deposits that are +60% fines cannot say this) underpinned by binding offtake agreements
– Strong shareholder support from a number of financial institutions
– Globally significant downstream collaboration with BTR who possess the leading technology for natural and synthetic battery anodes to leverage geopolitical significance of ex-China graphite supply