Evolution evolves into $100m graphite business

Shares in Marvel Gold’s graphite spinout have soared 210 per cent on its ASX debut, following an oversubscribed initial public offering that raised $22 million.

Based in West Perth, Evolution Energy Minerals is the spinout of Marvel Gold’s Chilalo asset, an advanced-stage graphite project forecast to average 50,000 tonnes per annum over an 18-year life.

Evolution listed this afternoon at 58.5 cents a share before closing at 62 cents, implying a market capitalisation of more than $100 million.

That compares with Evolution’s $32.4 million market cap based on its IPO, which was priced at 20 cents and led by Chieftain Securities and Ashanti Capital.

Marvel is Evolution’s biggest shareholder, with nearly a 31 per cent interest.

ESG-focused fund ARCH Sustainable Resources emerged with a 25 per cent shareholding in Evolution following an $8 million investment, as part of the IPO.

“We are extremely pleased with the response from institutional and retail investors to our IPO, which was significantly oversubscribed,” executive chairman of Evolution, Trevor Benson, said.

“Chilalo is a well-advanced graphite asset and having successfully completed the IPO, Evolution is strongly positioned to advance Chilalo towards development.

“A comprehensive work program is now under way, firmly focused on achieving this objective.”

The IPO proceeds will be allocated toward front-end engineering design for Chilalo; advancing studies on downstream processing, including for battery anode materials; stakeholder engagement; marketing; and implementing an ESG program.

Funds also went toward completing the Chilalo acquisition from Marvel and restructuring Evolution's financing arrangements, as stated in the company's prospectus lodged with ASIC on September 29.

Located in south-east Tanzania, the Chilalo project has a post-tax net present value of $US331 million based on an internal rate of return of 36 per cent. Its capital cost is estimated to be $US87 million.

Evolution expects to make a final investment decision for the project mid-next year.

The company’s board also includes executive directors Phil Hoskins (also the managing director of Marvel Gold), Amanda van Dyke (nominated to the board by ARCH) and Michael Bourguignon.