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Evolution Energy Minerals


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Our Investment Summary

Date of Initial Coverage


Initial Entry Price


Returns from Initial Entry


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.

Investment Memo:

Evolution Energy Minerals (ASX:EV1)


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.

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.


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.


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).


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%

General updates from EV1

Project development and downstream update webinar [03-Aug-2022]

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.

Investment Milestones for EV1

Initial Investment: @20c
🔲 Top Slice
🔲 Free Carry
Initial Investment: @32c
🔲 Top Slice
🔲 Free Carry
🔲 Take Profit
🔲 Price increases 300% from initial entry
🔲 Price increases 500% from initial entry
🔲 Price increases 1000% from initial entry
12 Month Capital Gain Discount
🔲 Hold remaining Position for next 2+ years

Our Past Commentary on Evolution Energy Minerals

Date Title
22-Apr-2023 $ 0.270 5 Battery Materials Stocks for 2023
18-Apr-2023 $ EV1 signs Framework Agreement for graphite mine in Tanzania
20-Mar-2023 $ EV1 releases DFS for its graphite project in Tanzania
08-Mar-2023 $ EV1 settles landmark agreements with the government of Tanzania
27-Jan-2023 $ Why is the EV1 share price running?
10-Dec-2022 $ 0.260 Graphite and our Pick of the Year - Battery Materials Thematic
27-Oct-2022 $ EV1 Begins Drilling - Targeting More Shallow High Grade Graphite
29-Sep-2022 $ EV1 Locks in Binding Terms for Downstream Graphite JV
10-Sep-2022 $ 0.315 Two stocks in the spotlight: TYX, EV1
08-Sep-2022 $ Increased Investment: “Value added” Graphite for Electric Vehicles and Nuclear
09-Jul-2022 $ 0.400 Markets showing life after June tax loss selling
07-Jul-2022 $ EV1’s Graphite Meets Purity Standards - Good for Batteries and Nuclear Energy
21-Jun-2022 $ EV1 Key Engineering Appointment - Following the Syrah Playbook
10-May-2022 $ EV1 Signs Binding Graphite Offtake, Eyes Downstream Joint Venture for EU Market
02-May-2022 $ EV1 Firms up first offtake deal, sets sights on European downstream manufacturing
12-Mar-2022 $ 0.460 Nickel, the War and Under Investment in Exploration
08-Mar-2022 $ Never miss a chance to improve DFS economics with near surface exploration.
26-Feb-2022 $ 0.460 The War Begins, Cybersecurity, Food Security, Energy Independence and Precious Metals
23-Feb-2022 $ Graphite to boom in 2022? EV1 targeting greenest graphite into European markets
05-Feb-2022 $ 0.430 The "Lesser Kown" Energy Transition Metals: Copper, Aluminium, Graphite, Helium, Rare Earths
18-Dec-2021 $ 0.425 Investing 101: Taking Stock of your Stocks and Diversification
15-Dec-2021 $ A look at ARCH, the ESG Fund is backing EV1
04-Dec-2021 $ 0.440 Omicron, Inflation and Investment Memos
27-Nov-2021 $ 0.530 New COVID strain, Santa Rally, Market Thoughts
25-Nov-2021 $ EV1 Cements its Commitment to ESG
20-Nov-2021 $ 0.530 Australia bets big on Hydrogen at COP26, investment in companies that solve problems
16-Nov-2021 $ Introducing our Pick of the Year
06-Nov-2021 $ 0.585 COP26, Battery Metals, Green Energy