Metals One (MET1)  has acquired a strategic shareholding in Evolution Energy Minerals, and agreed to underwrite part of Evolution's current rights Issue.

Evolution's primary project is the large, development-ready, high grade Chilalo graphite project in Tanzania, which has binding offtake agreements covering more than 90% of potential production.

Metals One has purchased 37.9 million Evolution shares from Marvel Gold Limited at A$0.011 per share, representing a premium of 10% to the rights issue price, for total consideration of A$416,900.

This gives Metals One an initial 10.45% shareholding in Evolution.

Metals One will underwrite a portion of Evolution's announced rights Issue at A$0.01 up to A$530,000 of the fully underwritten A$1.45 million total rights issue

Following completion of the share purchase and underwriting, and noting that the company will not hold rights as a shareholder in the Rights Issue, Metals One will hold up to approximately 88 million Evolution shares representing approximately 17.37% of Evolution's enlarged issued share capital.

These transactions will give Metals One exposure to Chilalo, which has a net present value at an 8% discount of A$518 million and internal rate of return of 32%, and adds graphite to a critical minerals portfolio that already includes uranium, nickel, copper, platinum group elements and gold.

Metals One believes that Chilalo represents one of the few advanced graphite projects positioned to supply ex-China markets, underpinned by strong ESG credentials, government support in Tanzania, and significant exploration upside including copper-lead-zinc targets.

"Securing a strategic stake in Evolution provides Metals One shareholders with exposure to a high-quality development-ready graphite project at a highly attractive entry point,” said Jonathan Owen, chief executive of Metals One. 

“The Chilalo project has robust economics, binding offtake agreements with tier-one partners, and sits within a rapidly tightening global graphite supply chain. We believe Chilalo has multi-decade mine life potential with scope to expand resources through near-surface discoveries. I have direct experience of operating in Tanzania, which is one of the more stable African jurisdictions for investment and large-scale projects and indeed have been aware of Chilalo for some time. We are pleased to create exposure for our investors to this opportunity and look forward to value accretion as the project advances towards financing and construction."

 

View from Vox

 

Metals One’s critical minerals portfolio continues to build, with graphite a new and intriguing addition. The company continues to be creative in its deal-making, and looks well positioned to meet the demands of the new industrial and green energy paradigm.