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(Sharecast News) - Precious metals exploration and development firm Metals One said on Friday that it has made a "strategic investment" in a large, high-grade mineral resource potential graphite project in Tanzania.
Metals One purchased 37.9m shares in Evolution Energy Minerals for a total consideration of AUD $416,000 (202,000), or $0.11 per share, representing a 10% premium to the ASX-listed firm's rights issue and resulting in an initial 10.45% shareholding.
Evolution's primary project was the large, development-ready, high-grade mineral resource potential Chilalo Graphite Project in Tanzania, supported by binding offtake agreements covering more than 90% of production.
Metals One will also underwrite a portion of Evolution's rights issue at AUD $0.01 up to AUD $530,000 (257,000) of the fully underwritten AUD $1.45m (704,400) total rights issue
Following completion of the share purchase and underwriting, Metals One will hold up to approximately 88m Evolution shares, representing approximately 17.37% of the company's enlarged issued share capital.
Chief executive Jonathan Owen said: "Securing a strategic stake in Evolution provides Metals One shareholders with exposure to a high-quality development-ready graphite project at a highly attractive entry point. The Chilalo project has robust economics, binding offtake agreements with tier-one partners, and sits within a rapidly tightening global graphite supply chain. We believe Chilalo has multi-decade mine life potential with scope to expand resources through near-surface discoveries.
"I have direct experience of operating in Tanzania, which is one of the more stable African jurisdictions for investment and large-scale projects and indeed have been aware of Chilalo for some time. We are pleased to create exposure for our investors to this opportunity and look forward to value accretion as the project advances towards financing and construction."
As of 0820 BST, Metals One shares were up 4.72% at 4.15p.
Reporting by Iain Gilbert at Sharecast.com
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