Transcript:
Phil Hoskins:
Hi. Phil Hoskins, Managing Director of Evolution Energy Minerals.
We’re pleased to announce a series of transactions with the global battery anode leader, BTR. They cover a number of strategic objectives, including offtake investment and downstream collaboration.
Before getting into the detail on these transformational agreements, I wanted to give a bit of background as to how we came about BTR and their global significance within the Anode space.
BTR are the number one battery anode company in the world, accounting for 26% of global market share. That number is 60% if you include natural graphite anodes, which of course we’re exposed to.
BTR also have a number of graphite production bases, five natural graphite production bases, all in China, nine synthetic graphite production bases, three Cathode production bases, three graphene production bases. So you can see already quite a significant company, and this is one of the reasons why they are the dominant player in the space.
We first met BTR back in 2018, and that’s really stepped up a little bit over the last twelve months with numerous meetings and discussions around these potential transactions, and particularly how they all interplay with each other in terms of the agreements themselves, they comprise three key pillars, the first of which is the investment agreement. The investment agreement will see BTR take 9.9% of EV one. It’s being done at a premium, 14% premium to the VWAP at share, and combined with Archer’s 25% shareholding. That’s now 35% of our shareholders who are fully supportive all the way through to FID.
The investment is subject to due diligence and foreign currency approvals, all of which we expect to get before the 31 October. The second key pillar is an MoU for downstream collaboration with BTR. As investors will know, Evolution’s strategy has been to become a vertically integrated producer of value added products, and our battery anode materials strategy is central to that.
Being able to partner with BTR brings so many advantages. They’ve got the number one technology in the world for all of battery anodes, natural, synthetic, silicon, additives, everything you can think of.
Their customer base is tier one, SK, LG, Tesla, Panasonic and all of these things. So it’s something that we’re really excited about to be able to partner with them. Firstly, looking in North America, this is the first time that BTR have sought to partner with a natural graphite company, and we expect to be their natural graphite company of choice internationally. But for us it brings so many advantages and means. We won’t just be a graphite miner, but we’ll become that vertically integrated producer we’ve always wanted to be.
The third pillar is a binding offtake agreement with BTR for 100% of our fine flake graphite. This provides us with about 90% of our product now under offtake agreements, and critically with global leaders in their fields. BTR the global leader in battery anode materials, and YXGC the global leader in expandable graphite and graphite foil.
Having 90% of our product under offtake is critically important to the debt financiers who are looking to finance the Chilalo project because it provides them with certainty on the revenue line. The Offtake agreement is for three years, price is market price, and the agreement itself will novate to our joint downstream entity at the time that we commissioned a downstream plan together. The introduction of BTR as a strategic partner should provide investors with confidence that we can move towards a final investment decision on Chilalo by Q1 of next year.
If you’d like any more information, please check out our website or check it out on social media.
