Evolution Energy Minerals Ltd (ASX:EV1) is raising $4.6 million, with funds primarily used to complete the proposed investment of BTR New Material Group Co. Ltd and optimisation of the Chilalo Graphite Project.
The company has received firm commitments to raise A$4.6 million (before costs) via a fully committed two-tranche placement of around 32.9 million fully paid ordinary shares to institutional, sophisticated and professional investors at a price of $0.14 per new share.
The issue price of $0.14 represents a 15.2% discount to the last traded price of Evolution shares on the ASX of $0.165 and a 18.3% discount to the five-day volume weighted average price of Evolution shares as at the close of trading on October 5, 2023 of $0.171.
New shares issued under the placement will rank equally in all respects with existing shares from their respective date of issue.
Use of funds
The proceeds from the placement will be allocated for several key initiatives.
Foremost among these is the successful completion of the proposed investment in BTR New Material Group Co. Ltd.
Subsequent allocations are geared towards the optimisation of the Chilalo Graphite Project and advancing its project financing.
Additionally, funds are earmarked for furthering the United States downstream battery anode collaboration with BTR. The remaining proceeds will be used for general working capital and expenses associated with the placement itself.
In August this year, EV1 executed a strategic investment agreement, a binding offtake agreement and a "transformational" Memorandum of Understanding (MoU) for downstream collaboration with the world’s leading battery anode producer, BTR.
BTR's customers include Chinese domestic lithium-ion battery manufacturers, including CATL, BYD, EVE, Gotion High-Tech and REPT, plus international tier one customers such as SK, Samsung (KS:005930), LG, muRata and Panasonic.
The tranches
The two tranches for the placements will be broken down into the following:
1. Tranche One: the issue of 24,737,744 new shares to institutional, sophisticated and professional investors at $0.14 per new share, using EV1’s existing placement capacity under Listing Rule 7.1, to raise some $3.46 million (before costs); and
2. Tranche Two: the issue of 8,119,399 new shares at $0.14 per new share to ARCH Sustainable Resources Fund LP (ARCH) to raise $1.14 million (Tranche Two Placement Shares), subject to and conditional upon receipt of approval of the company’s shareholders at a general meeting expected to be held on or around November 24, 2023.
Delivering its vertically integrated production strategy
Evolution managing director Phil Hoskins said: “This is an exciting time for Evolution as we focus on delivering our strategy to become a vertically integrated producer of anode materials using fine flake graphite from Chilalo.
“Subject to completion of the transactions with BTR New Material Group Co. Ltd, Evolution will have the opportunity to partner with the world’s largest producer of lithium-ion battery anodes, thereby providing a pathway to vertical integration.
"Proceeds from the placement will enable the completion of key workstreams required for project development to commence and will advance the debt financing process and evaluation work (being undertaken together with BTR) on downstream processing in North America.”