Evolution Energy Minerals Ltd (ASX:EV1) has amended its investment agreement with BTR New Material Group Co Ltd following the successful completion of due diligence by BTR.
Originally, BTR agreed to purchase Evolution shares at A$0.22 per share, amounting to 9.90% ownership in Evolution.
Both parties have now agreed to revise the investment terms, reducing the share price to A$0.14, aligning with the price of Evolution's recent capital raising.
Consequently, BTR will invest A$3.62 million for a 9.90% stake in Evolution.
This investment is now unconditional, pending approval from Evolution shareholders and barring any material adverse events affecting Evolution.
A shareholder meeting is scheduled for late February 2024 to sanction the share issuance to BTR.
Thorough due diligence
BTR's thorough due diligence included evaluating the Chilalo fine flake graphite's suitability for producing spherical graphite, a critical component in anode materials for lithium-ion batteries.
Test results demonstrated exceptional yields into spherical graphite, showcasing spheroidal particles produced through BTR's spheronisation process.
The due diligence process also entailed a comprehensive assessment of the Chilalo Project, including visits to Perth and Tanzania by BTR's team, reviews of the 2020 and 2023 definitive feasibility studies (DFS), consultations with key consultants and scrutiny of tenement documents and key permits.
BTR's team also accompanied Evolution management to the US to meet with various stakeholders as Evolution continues to evaluate potential locations for a downstream processing facility.
The final element of BTR’s due diligence related to the flotation test work and mineralogy on ore samples collected from surface trenches at Chilalo during BTR’s site visit, which has now been completed to BTR’s satisfaction.
Validation of Chilalo
EV1 managing director Phil Hoskins said: “We are very pleased to have removed the due diligence condition of BTR’s investment and now look forward to BTR becoming a key strategic shareholder.
“BTR’s positive due diligence provides validation about the quality of the Chilalo project and our graphite’s performance in lithium-ion battery anodes.
“Welcoming the global battery anode leader to our register will help with Chilalo’s project financing whilst we continue to assess the possibilities from the broader collaboration with BTR including downstream processing.”
BTR senior vice president Chen Xiaodong said: “We have been pleased with the results of what has been an extensive due diligence process and look forward to ongoing cooperation with Evolution, including supporting Evolution in the financing of the Chilalo project.”
About BTR New Material Group
Established in August 2000, BTR, established in August 2000, specialises in lithium-ion battery materials and carbon nanomaterials.
BTR boasts a formidable global presence, with more than 8,000 employees and over 20 companies/production bases, primarily in mainland China and an upcoming base in Indonesia.
The company excels in producing anode, cathode and advanced new materials. With a diverse customer base, including major Chinese and international lithium-ion battery manufacturers, BTR has a commanding 26% share of China's anode material market, as per 2022 data from ICCSINO, a Shanghai-based consultancy.
BTR's market dominance extends to over 60% globally for natural graphite anodes.