Chilalo economics expected to improve through continuing value engineering studies

Evolution Energy Minerals (“Evolution” or the “Company”) is pleased to announce that a series of value engineering studies have commenced and are expected to improve the economics and reduce the carbon footprint of the Chilalo Graphite Project (“Chilalo”) in Tanzania. Value engineering will be a continual exercise and progression towards a construction decision by H2 2022, which is not conditional on the outcomes of such studies.

Evolution Executive Director, Michael Bourguignon, commented: “With the benefit of my previous experience in graphite, we have identified a number of opportunities to improve the economics of the Chilalo Project. It is clear that there are several opportunities for cost savings, particularly in relation to mining costs and electrical power. Like most projects, Chilalo’s NPV is most sensitive to commodity price and the strong positive trend in graphite prices is also expected to contribute to more favourable economics. We look forward to providing updates regarding further enhancements to the Chilalo Project in the coming months ahead of a construction decision by H2 2022.”

Mining costs have been identified as one of the more significant opportunities for improvement in Chilalo economics and a review of the mine plan is underway. Furthermore, the Company commenced exploration in June 2021 to identify undrilled high-conductance exploration targets on its tenement holdings. Ground electromagnetics is being used to identify high-conductance targets with a focus on high-grade, near surface, coarse flake graphite deposits. The discovery of additional graphite deposits at surface has the potential to deliver a reduced strip ratio, lower mining costs, extended mine life and an improved NPV.

The Company has engaged MinViro to assess the carbon footprint associated with the proposed mining operation at Chilalo as part of a process being undertaken by Evolution to investigate the establishment of a net zero carbon operation at Chilalo. The Company is also in advanced discussions with independent power providers to convert Chilalo’s proposed diesel generated power supply to a hybrid solar/diesel solution, which is expected to substantially reduce the carbon footprint and deliver operating cost savings. Additionally, a recent visit to the Mtwara Port facility to view the upgraded facilities provided insight into the possible operational utilisation of this facility, with the scope to further improve Chilalo economics and reduce carbon emissions.

The ongoing value engineering, which is central to the Company’s approach to continuous improvement, is not expected to delay progress towards making a construction decision by H2 2022. The existing DFS is executable as it stands and the Company will progress project finance discussions in parallel with implementation of the recently announced ESG Framework which is designed to meet the requirements of key stakeholders including financiers and graphite customers.

The Company is making preparations to tender a Front-End Engineering Design (FEED) package for the Chilalo Project, aimed at advancing the design sufficiently to identify and mitigate against potential risks to the schedule, and further define the project cost estimate. Engineering firms from three separate continents have expressed a desire to be considered for this work and the Company intends to run a pre-qualification process in order to shortlist the most suitable applicants. FEED work is expected to commence in Q2 2022 and is envisaged to take four months.

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