Opened: 16-Nov-2021
Shares Held at Open: 3,125,000
What does EV1 do?
EV1 is a sustainable, ESG friendly, advanced stage graphite project in Tanzania.
What is the macro theme?
Graphite is a key component in lithium ion batteries.
Our previous battery materials investments have been very successful.
Up until now we did not have any exposure to graphite and its growing demand. Graphite has many other applications beyond electric vehicles too.
Our Big Bet for EV1
EV1 will achieve first production of the world’s most sustainably produced graphite by early 2024 (including value adding processing) coinciding with the onset of a long-term supply shortage in the graphite market.
Why did we invest in EV1?
Smaller, advanced graphite project so quick to market while graphite market strong
Fully permitted with JORC resource and DFS (US $87M capex for US323 NPV),
ESG focussed investment
ESG fund invested $8M and is forcing EV1 to be “best in class ESG”, so it can secure ESG capital funding to develop project
Market cap should catch up to peers by progressing down stream value add (good cap table, key shareholders escrowed).
What do we expect EV1 to deliver?
Objective #1: Final Construction Decision & progress towards Project Funding
The name of the game for EV1 is to reach a final construction decision and secure the ~US$87M required in capital costs to bring the project into production. DFS upgrades and optimisations will form a part of this process, but more importantly, EV1 needs to deliver all of the ESG requirements set out by ARCH (the cornerstone ESG shareholder), so that ARCH can help EV1 secure funding from other ESG funds in its network that only invest in top class, proven ESG opportunities.
Milestones
DFS Optimisation
Front end engineering design (FEED) – Appointment of Engineer
Front end engineering design (FEED) – Progress update
Front end engineering design (FEED) – Final report
ESG – Initial assessment or report
ESG – Sustainability report
ESG – Quarterly progress reporting
ESG – Life cycle assessment report
ESG – Progress towards zero carbon operation
ESG – ESG investment readiness announced
ESG – Independently assessed ESG score
ARCH Provides further project funding
ARCH introduces other ESG funds
Strategic Board appointment
Objective #2: Assess Downstream “Value Add” Opportunities
Assessing further downstream “value add” opportunities and the prospect of commercialisation is important for EV1’s success. Given that each graphite project’s mineralisation has a “unique signature”, it will be important for EV1 to work with potential offtake partners to ensure compatibility with existing technologies as well as the development of new technologies with EV1’s graphite.
Milestones
Market update on downstream value add studies
Market update on downstream value add partnerships
Market update battery specific value add (studies or partnerships)
MoU signed with downstream partner 1
MoU signed with downstream partner 2
Offtake agreement 1
Offtake agreement 2
Objective #3: Increase Resource Size and find more shallow resource
Whilst an increase in the resource size is not necessary for making a final investment decision, the greatest opportunity to improve project economics identified in the DFS was adding more near-surface graphite deposits to substantially reduce mining costs.
We expect EV1 to undertake an expansionary drill program mid-way through next year, with a geophysics program to identify drill targets to commence imminently. We also want exploration to optimise the economics of the DFS by finding more resources at a shallow depth (cheaper to extract).
Milestones
Announce Exploration Program
Drill Targets Identified/Refined
Drill Program commenced
Drill results announced
Resource Update
What could go wrong?
Sovereign Risk
Any Tanzania sovereign risk flare ups will spook investors and dampen share price
Commodity Risk
Graphite prices could fall making the project harder to fund or uneconomical
Funding Risk
Might struggle to secure ~$87M US to develop the project if market softens or they fail on ESG aspects
What is our investment plan?
We are holding a core position (min 50%) long term (4 to 7 years) to hold into first production
The company has a low market cap compared to peers, if EV1 delivers key milestones and the share price re-rates we will (progressively) sell ~20% with the goal to fee carry
if the company rises more than 500% after 12 months holding (CGT tax discount) we will look to take some profit progressive sell down of ~25%
Disclosure: The authors of this memo and owners of Wise-owl, S3 Consortium Pty Ltd, and associated entities, own 3,125,000 EV1 shares at the time of publication. S3 Consortium Pty Ltd has been engaged by EV1 to share our commentary on the progress of our investment in EV1 over time.
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Jan 22, 2024
Jan 22, 2024 |
28 min
Today, EV1 announced that due diligence has been successfully completed by the world's biggest anode producer - BTR.
EV1 signs with world’s biggest anode producer - investment, offtake and MoU for downstream
Aug 16, 2023
Aug 16, 2023 |
12 min
Our graphite Investment Evolution Energy Minerals (ASX: EV1) has just signed a three part deal with the world’s biggest battery anode producer.
EV1 signs Framework Agreement for graphite mine in Tanzania
Apr 18, 2023
Apr 18, 2023 |
7 min
Our 2021 Wise-Owl Pick of the Year Evolution Energy Minerals (ASX: EV1) just signed a Framework Agreement with the Tanzanian government for its advanced graphite project.
EV1 releases DFS for its graphite project in Tanzania
Mar 20, 2023
Mar 20, 2023 |
16 min
Our graphite Investment Evolution Energy Minerals (ASX: EV1) has just released an updated DFS on its graphite project in Tanzania, and is holding an investor webinar this morning to discuss it.
EV1 settles landmark agreements with the government of Tanzania
Mar 8, 2023
Mar 8, 2023 |
11 min
Today, EV1 announced a Framework Agreement and Shareholders Agreement that give certainty around the rights and obligations of all stakeholders in EV1’s graphite project have been settled in a form agreed by the Tanzanian government.
EV1 Mining Licence renewed for 10 years
Sep 28, 2023
Sep 28, 2023 |
1 min
Our 2021 Wise-Owl Pick of the Year Evolution Energy Minerals (ASX: EV1) just renewed its mining license for its graphite project in Tanzania.
EV1 makes its second graphite discovery for the year.
May 22, 2023
May 22, 2023 |
2 min
Our 2021 Wise-Owl Pick of the Year Evolution Energy Minerals (ASX: EV1) just made another graphite discovery at its project in Tanzania.
EV1 to build its downstream plant in the USA
May 16, 2023
May 16, 2023 |
2 min
Our 2021 Wise-Owl Pick of the Year Evolution Energy Minerals (ASX: EV1) is looking to build its downstream processing strategy in the USA.
EV1 Project financing update
May 11, 2023
May 11, 2023 |
3 min
Our 2021 Wise-Owl Pick of the Year Evolution Energy Minerals (ASX: EV1) just put out a project financing update.
Drilling results are in - new graphite discovery made
May 1, 2023
May 1, 2023 |
1 min
Earlier this morning , our 2021 Wise-Owl Pick of the Year Evolution Energy Minerals (ASX: EV1) announced that it had made a new graphite discovery. EV1 became our pick of the year primarily due to its shovel ready, DFS level graphite project in Tanzania - the DFS was updated back in March and showed attractive project economics, in particular its NPV of US$338M.
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Jun 17, 2023 |
12 min
Here we are, the final two weeks of June tax-loss selling. Those wanting to exit a stock and holding out for newsflow or a liquidity event are probably getting to the point where time is running out.
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Apr 22, 2023 |
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In this article we shine a light on five NON-LITHIUM companies we are holding in the battery materials space.
Graphite and our Pick of the Year - Battery Materials Thematic
Dec 10, 2022
Dec 10, 2022 |
13 min
Graphite is a crucial battery metals, and although Lithium has had a huge run, the Graphite price is yet to take off in similar fashion. In this Weekender, we cover the Graphite thematic and our two Graphite stocks. Sarytogan Graphite was announced as our Pick of the Year this week, for its gigantic Graphite deposit in Kazakistan.
Two stocks in the spotlight: TYX, EV1
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Sep 10, 2022 |
10 min
This week an early-stage lithium explorer was named our Catalyst Hunter 2022 Pick of the Year, and we provide an update on our 2021 Wise Owl Pick of the Year, a graphite Investment.
Markets showing life after June tax loss selling
Jul 9, 2022
Jul 9, 2022 |
18 min
Markets showing life after June tax loss selling, cap structures explained and we share our internal spreadsheet for tracking cap structures, options and performance shares.
