Evolution Energy Minerals Ltd (ASX:EV1) has introduced a major new shareholder to its register.
ARCH SRF made an A$8 million investment in Evolution’s Initial Public Offering (IPO), as part of an overall potential allocation of up to US$25 million for ongoing financial support to EV1’s Chilalo Graphite Project.
This gives ARCH SRF a 25% holding, with the fund manager completing its second site visit and Amanda van Dyke taking up an EV1 board position.
Chilalo is in south-eastern Tanzania, 400 kilometres south of Tanzania’s largest city Dar es Salaam and hosts a high-grade mineral resource of 20.1 million tonnes at 9.9% total graphitic carbon (TGC) for 1.991 million tonnes of contained graphite.
“We view Chilalo as a world-class asset, supported by Evolution’s team, which has considerable graphite marketing, financing and project delivery experience,” said managing director of the ARCH SRF investment strategy and Evolution director, Amanda van Dyke.
“Our investment follows a year-long due diligence period including an extensive review of the project’s ESG credentials and a site visit in May 2021.”
ARCH SRF has acquired a 1.7% net sales return royalty on minerals from the Chilalo Project in exchange for A$2 million.
Buying into near-term development
“ARCH SRF’s investment, is testament to the quality of the Chilalo Project and its prospects for near-term development,” Evolution’s executive chairman Trevor Benson said.
“With its combination of technical, financial and ESG capability, we are extremely pleased to have ARCH SRF as a cornerstone investor in Evolution.
“Like ARCH SRF, we view the Chilalo Project as a quality asset and have assembled a team with considerable graphite marketing, financing and project delivery experience, as we strive to become a producer of sustainable graphite products for the global green economy.”
Advancing ESG credentials
Under the terms of the Investment Deed with ARCH SRF, EVI will look to advance its ESG credentials and embed its ESG commitments into its corporate governance structures, recognising that ESG is a driver to attract investment funds while ensuring sensible and sustainable business operations.
ARCH SRF’s significant investment underpins EV1’s commitment to ESG standards and provides it with critical insight into the expectations of ESG fund managers with respect to ESG standards.
“ARCH SRF was created with a strict ESG focus to work in strategic partnership with companies like Evolution, supporting them financially, technically, on ESG and commercially to create investor value,” van Dyke said.
“Our vision is to deploy our significant ESG, project financing and development expertise to ensure Evolution meets the highest standards for sustainable development to become the supplier of choice for high-value graphite and battery materials products.”
EV1 expects its ESG focus to enable it to be positioned as an attractive investment proposition for a wide range of ESG-focused fund managers.
About ARCH SRF
ARCH SRF is advised by ARCH Emerging Markets Partners Limited, a specialist investment advisory firm with deep experience in emerging markets, private equity, asset management and ESG matters.
The ARCH SRF investment team also has significant project finance expertise and the capacity to access funding required for the development of the Chilalo Project.