Evion Group NL (ASX:EVG) has struck a standalone debt deal for its Panthera Graphite Technology (PGT) project in India, fully funding the expandable graphite plant through to production and cash flow.
A US$2.1 million loan — secured alongside joint venture partner and expandable graphite company Metachem Manufacturing — means the PGT project is one step closer to entering commissioning in 2023’s December quarter.
Evion managing director Tom Revy said the loan comprised a “highly favourable debt package” and represented a “major achievement” for the Indian graphite joint venture.
Cutting the ribbon in 2023
Upon start-up, PGT can generate up to 2,500 tonnes of expandable graphite per annum. However, a modular development strategy means the joint venture vehicle can scale up to a 5,000-tonnes-per-annum project within two years.
PGT’s initial output is fully secured in binding sales contracts and Evion is putting out the feelers to potential customers in Australia (a country that exclusively imports expandable graphite) to lock in the additional 2,500-tonnes capacity.
While the loan sets the course for production at PGT, the deal also has positive implications for Evion’s flagship Maniry graphite mine, freeing up cash for advanced development projects in Madagascar.
Once Maniry enters production, the plan is to send graphite concentrate to PGT to generate expandable graphite products for offtake.
Primed for commissioning
MD Revy continued: “On behalf of Evion, I would like to thank our India-based joint venture partners, who enabled us to secure the funding on such favourable terms and who also provided personal guarantees to the funding banks.
“Debt funding this development also means our joint venture will qualify for very favourable power and other rebate concessions as part of the SEC incentives in this region.
“With the debt funding and binding offtake contracts in place, we are well on track to start commissioning this year.”
Financiers Janata Sahakari Bank and Pune are behind the US$2.1 million PGT loan, which the vehicle has eight years to repay.
The debt deal’s interest rate has been discounted from 11% to 9%, while the first repayment is only due 12 months after the first drawdown.
Evion and Metachem expect to meet their repayment requirements by drawing from positive operational cash flow once PGT enters production.