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Evolution Energy appoints Auramet to progress financing for the Chilalo Graphite Project

Mon 16 May 22, 10:58am (AEST)
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Key Points

  • Auramet will initiate discussions with financing groups including local banks and export agencies
  • Evolution is focused on moving to construction of the Chilalo Graphite Project "as soon as possible"

Evolution Energy Minerals (ASX: EV1) has appointed financial advisory group, Auramet International, to advise and secure project financing for the Chilalo Graphite Project in Tanzania.

Auramet specialises in physical precious metals like copper, zinc and nickel transactions. Auramet has been tasked with exploring project financing options with organisations including Tanzanian banks, commercial banks, African and Australia institutions and export credit agencies. 

Auramet is a financial advisor to the resources sector with significant experience in Africa. The company has completed numerous debt, equity and offtake agreements for companies operating in the mining industry.

“This appointment is an important stage for the Company as we seek to execute the material project milestones and move to construction as soon as possible," said Managing Director, Phil Hoskins. 

Delivering on major milestones

Evolution is working through the milestones required to reach a final investment decision in the fourth quarter of 2022.

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Source: Evolution Energy Corporate Presentation (May 2022)

So far, Evolution has secured a binding offtake agreement with China's Yichang Xincheng Graphite Co (YXGC) for the supply of 30,000 tonnes per annum of coarse flake graphite for a minimum of three years.

The offtake agreement reflects 50% of Chilalo's expected output and over 70% of forecast revenues through to 2025.

Upcoming catalysts

Definitive Feasibility Refresh

A 2020 DFS on Chilalo forecast a post-tax NPV of US$323m for the project with a capital cost of US$87.4m.

Evolution is currently completing an optimisation of the DFS focused on reducing both capital and operating costs, and improving Chilalo's carbon footprint.

Framework agreement with Tanzanian Government

Evolution is working towards a framework agreement for the Government of Tanzania's free carried interest in the project.

The company recognised that investors and project financiers will require certainty of the free carried interest and completion of the framework will be "the highest priority in moving to a construction decision."

Drilling at Chilalo

A trenching program is currently taking place to determine surface projections, grade an thickness of graphite deposits at Chilalo.

The results of the trenching program will be used to identify targets for a drilling program, expected to commence in May.

2022-05-16 10 33 16-Evolution Energy Minerals Ltd (ASX EV1) - Share Price - Market Index
Evolution 12-month price chart

 

Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University and was Vice President of the University Network for Investing and Trading (UNIT). He is an avid swing trader, and drawn to breakouts and technical set ups. Outside of writing and trading, Kerry is a huge UFC fan, loves poker and bouldering.

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