Strategic Collaboration with BTR, the #1 global battery anode company

Evolution has executed a strategic investment agreement, binding offtake agreement and transformational MOU for downstream collaboration with the world’s leading battery anode producer, BTR New Material Group Co., Ltd. (“BTR”) (market capitalisation of US$3.4 billion).

These transactions provide a range of key strategic benefits including:

• Ensuring ~90% of Evolution’s graphite is under offtake with globally leading customers, which supports project economics and is expected to enhance project financing proposals.
• Strategic financial support, with potential for further BTR funding contributions. BTR’s financial and strategic validation provides additional confidence in securing the optimal development funding.
• Partnering with globally leading anode processing technology provides an accelerated yet de-risked solution to becoming a vertically integrated supplier of battery anode materials.
• Repositioning Evolution to fast-track towards transforming into a vertically integrated producer of lithium-ion battery anode materials.

Strategic placement to BTR at $0.22 per share to raise $4.9 million from the issue of 22.3 million shares representing 9.9% of Evolution, subject to the satisfaction of certain conditions (including BTR due diligence and regulatory approvals:

• Price of $0.22 per share represents 14% premium to 15 day VWAP (as at 11 August 2023).

MOU covering (i) a proposed downstream processing collaboration between BTR and Evolution to produce battery anode materials; and (ii) BTR’s further participation in the financing of Chilalo.

The MOU is expected to facilitate several long-term strategic benefits including:

• Providing Evolution with an opportunity to partner with BTR and its leading natural graphite anode processing technology.
• BTR’s existing relationships with leading global battery manufacturers will see it become the marketing agent for the sale of anode materials produced by the downstream collaboration entity.
• The parties will initially focus on an economic assessment of downstream processing options in North America but will also consider other jurisdictions outside of China.
• The parties will work together to execute a binding downstream agreement by 31 March 2024, with the structure to be guided by legal advice.

Binding Offtake Agreement:

• BTR and Evolution have entered into a binding offtake agreement for 100% of its fine flake graphite from the Chilalo Project for three years (with an option to extend for an additional three years). The offtake is conditional on the binding downstream agreement mentioned above being executed prior to 31 March 2024, as well as product qualification and completion of the Strategic Placement.
• ~90% of Chilalo product is now under offtake agreement, a key requirement of project financiers.
• Upon establishment of a downstream processing facility, the offtake agreement will be assigned to the entity conducting the downstream processing collaboration.

The meeting of Evolution shareholders to approve placement to BTR expected to take place in October. Completion of the transactions with BTR is subject to the satisfaction of certain conditions, including BTR due diligence and regulatory approvals.

Evolution Energy Minerals Limited (“Evolution” or the “Company”) (ASX: EV1, FSE: P77) is pleased to announce that it has reached agreement with BTR on a series of transactions (“BTR Transactions”) that, on completion, will position the Company (via a downstream entity to be agreed with BTR) as a vertically integrated producer of lithium-ion battery (“LiB”) anode materials using flake graphite from its Chilalo Graphite Project (“Chilalo” or the “Chilalo Project”) located in south-east Tanzania.

BTR is the global leader in the manufacture of LiB anode materials and has substantial capability in research and development which ensures it remains at the forefront of LiB technology advancements.

Evolution Managing Director, Phil Hoskins, commented: “The Strategic Placement, Offtake Agreement and MOU with BTR represent a transformational opportunity for Evolution and provide further validation of the Chilalo project’s quality, including the significant valueadded potential into battery anodes. These transactions provide a clear pathway to funding and accelerate Evolution’s transformation from graphite mine developer to a vertically integrated graphite company.

“The Offtake Agreement and BTR’s financial backing is expected to materially support the ongoing project finance process for our Chilalo project. Leveraging BTR’s world-leading commercially proven technology, innovation and Tier 1 customer base is expected to de-risk the proposed Evolution/BTR downstream collaboration and fast-track Evolution’s exposure to the rapidly growing battery anode market. We look forward to a long-term strategic relationship with BTR.”

Managing Director of ARCH Sustainable Resources Fund, Amanda van Dyke, commented: “ARCH is very pleased to see that Evolution and BTR have reached this set of transactions and we commend Evolution management on their achievement, these are landmark agreements for a junior mining company. ARCH is fully supportive of EV1’s strategic collaboration with BTR, the world's leading lithium-ion battery material technology and production company and new energy focused natural graphite end-user. We recognise BTR as a key partner to Evolution for developing Chilalo and becoming a vertically integrated anode materials supplier. We look forward to working with BTR closely to jointly promote the construction of EV1’s natural flake graphite project in Tanzania, as well as the development of downstream production facilities for the best quality sustainable anode material products worldwide.”

BTR’s Senior Vice President, Mr Chen Xiaodong, commented: “BTR has built an international reputation as a leader in the high-quality LiB market. We are pleased that Evolution will become BTR's main overseas natural graphite partner. Our close cooperation will not only help our companies achieve further global coverage in production and vertical integration, but also contribute to the innovation of LiB materials and support the development of the global new energy industry.”

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