Evion Group NL - Scoping Study Provides Compelling Case for Battery Anode Material Plant in Europe
17 January 2023
Study confirms strong opportunity to produce material for use in lithium-ion batteries by value-adding graphite concentrate from Evion’s Maniry Project
Key Points
- Evion’s Scoping Study finds a Battery Anode Material (BAM) plant in Europe would generate strong returns
- The plant would process graphite concentrate from Evion’s Maniry project in Madagascar into uncoated spheronised purified graphite (SPG) for use in lithium-ion batteries
- The Study reviewed five different process routes and two throughput rates as a precursor to an Pre-feasibility Study
- Discussions already underway with strategic stakeholders about finance / grants, offtakes and location options within Germany.
- BAM Study follows the highly successful Definitive Feasibility Study on Maniry, which found the project would generate strong financial returns and be technically robust (see ASX release dated November 3, 2022 “BlackEarth completes Positive DFS for Maniry Project”)
- The DFS showed Maniry graphite would meet the requirements for many value-added products, including lithium-ion batteries and other decarbonisation-related products
- The Maniry DFS and the BAM Scoping Study are central to Evion’s strategy to be a vertically-integrated supplier of graphite products, enabling it to capitalise on the forecast surge in demand from the lithium-ion battery and EV markets
Scoping Study: Cautionary Statements
The Scoping Study referred to in this announcement has been undertaken in regards to providing the outcomes for the Battery Anode Material (“BAM”) Project inclusive of a sensitivity analysis across a number of key parameters. The Scoping Study is a preliminary technical and economic study of the potential viability of the BAM Project. It is based on low level technical and economic assessments and previously undertaken test work.
Further product tests, evaluation work and appropriate studies are required before Evion will be in a position to provide any assurance of an economic development case. The Scoping Study is based on a number of material assumptions. These include assumptions about the availability of funding. While Evion considers all of the material assumptions to be based on reasonable grounds, there is no certainty that they will prove to be correct or that the range of outcomes indicated by the Scoping Study will be achieved.
To achieve the range of outcomes indicated in the Scoping Study, funding will be required for further studies and the capital required to implement the Project and are currently estimated to be in the range of USD$125 -135 million (including a 30% contingency). Investors should note that there is no certainty that Evion will be able to raise that amount of funding when needed. It is also possible that such funding may only be available on terms that may be dilutive to or otherwise affect the value of Evion’s existing shares. It is also possible that Evion could pursue other ‘value realisation’ strategies such as a sale, partial sale or joint venture of the project. If it does, this could materially reduce Evion’s proportionate ownership of the project, which is currently 100%.
Given the uncertainties involved, investors should not make any investment decisions based solely on the results of the Scoping Study.
Key Study Results:
|
Product Output |
|
|
30,000tpa |
15,000tpa |
Pre-Tax NPV8% (US$M) (2) |
$392m |
$152m |
Pre-Tax IRR (%) |
39.50% |
28.40% |
Initial CAPEX (US$M) (1) |
$117m |
$74.m |
Total Pre-Tax Cashflow (US$M) |
$2,808m |
$1,404m |
Payback (years) |
3.51 |
4.67 |
(1) Includes 30% contingency
(2) The NPV value does not include the positive impact of grants and other subsidies that may be apparent in the short term and positively impact these results
Evion Managing Director Tom Revy said:
“Underpinned by our Maniry Graphite Project, this battery anode material plant has the potential to uniquely position Evion to capitalise on the strong growth in demand for non-Chinese supplies of uncoated-SPG from the European lithium-ion battery market.
By developing a vertically-integrated graphite business, Evion is positioning itself to take full advantage of the highly favourable supply-demand fundamentals emerging for our products as a result of the energy transition.
Evion continues to grow its development pipeline, which includes expandable graphite, uncoated spheronised purified graphite and the Maniry Graphite Project, in a controlled and strategic manner to provide shareholders more direct exposure to the fast-growing global graphite supply chain.
The Board believes that the quality portfolio of integrated projects it now holds, not only positions the Company to deliver against our vision but also represents significant potential value for our shareholders moving forward.”.
Scoping Study Overview
Evion Group NL (ASX: EVG) is pleased to announce that it has completed a Scoping Study on developing a facility to process graphite concentrate from its Maniry project in Madagascar into a product suitable for use in lithium-ion batteries.
The strategy is aimed at enabling Evion to capitalise on the emerging supply deficit for battery anode material required to make lithium-ion batteries. At present, nearly all spheronised purified graphite used in the production of lithium-ion batteries is produced in China. While Chinese dominance is likely to continue over the medium term, the outlook for SPG (see Figure 1 below) provides Evion an enormous opportunity to supply European markets (and broader) with a high quality / high value product into what is expected to be a high demand market.
In September 2022, Evion engaged Wave International (“Wave”), an independent resource development consulting group with specific expertise in the downstream processing of natural graphite concentrate, to oversee of the Scoping Study. The Study assessed the viability of building a BAM plant in Germany. The Study leveraged off the earlier battery test work programs undertaken by Dorfner ANZAPLAN in 2019-2020, when the Company completed a graphite anode suitability program (ASX Release: “BlackEarth Graphite Suitable for Lithium-Ion Batteries”, 14 February 2020).
In its role as Study Manager, Wave assisted in the evaluation of building a downstream processing facility in Germany to produce (uncoated) spheronised purified graphite from a portion of graphite concentrate expected to be produced from the Maniry Project in Madagascar. The high-level flowsheet developed, incorporates mechanical shaping (micronisation and spheronisation) followed by purification. In total, 5 purification options were reviewed based on the earlier battery test work data, where results achieved a minimum 99.96% fixed carbon using a number of different purification methods. Wave compiled the various technical components, preliminary assumptions and conceptual financial model using data provided by both Evion and other specialist consultants.
Based on the preliminary qualitative and quantitative reviews undertaken as part of the Study, the caustic baking flowsheet remains the current preferred purification route.
Two product output scales were reviewed as part of the Study: 30ktpa and 15ktpa.
Next Stage
Based on the outcomes of this Study, the following steps form the basis of future development of the Company’s BAM ambitions for Germany:
- Comprehensive test work undertaken on Maniry concentrate in order to better define the process flow sheet, optimise reagent schemes and understand the characterisation of waste stream
- Progress site selection studies for the finalisation of location for the processing facility
- Investigate further infrastructure options based on site requirements
- Produce specification / datasheet for product produced from the purification flowsheet
- Commence marketing activities.
This release has been authorised by the Company’s Disclosure Committee
Contacts
Tom Revy
Managing Director
Evion Group NL
0411 475 376
David Round
Finance Director
Evion Group NL
0411 160 445
Paul Armstrong
Investor and Media Relations
Read Corporate
+61 8 9388 1474
For more information – https://eviongroup.com
Level 3, 1138 Hay Street
West Perth, WA, 6005
PO Box 300
West Perth, WA, 6872
T: +61 8 6158 9916
Evion Group NL
ABN 66 610 168 191
Competent Person Statements
The information in this document that relates to the Exploration Results, Exploration Targets and Mineral Resources and as reported in the large-scale pilot program (Refer ASX: EVG Release “Completion of the Maniry Graphite Pilot Program Delivers Outstanding Results for BlackEarth” – 9 August 2021)) is based on information compiled by Annick Manfrino, a Competent Person who is a member of the Australasian Institute of Mining and Metallurgy and was employed by the Company at that time
Annick Manfrino has sufficient experience that is relevant to the style of mineralization and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.
The information in this report that relates to Maniry metallurgical test work results is based on information reviewed by Mr Tom Revy, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Revy is an employee of Evion Group. Mr Revy has sufficient experience relevant to the processing of graphite ores to qualify as a Competent Person as defined by the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code, 2012 Edition).
Both Tom Revy and Annick Manfrino consent to the inclusion of the information in this document in context in which it appears.
Link to the original news in full length:
Forward Looking Statements
Some of the statements appearing in this announcement may be in the nature of forward-looking statements. You should be aware that such statements are only predictions and are subject to inherent risks and uncertainties. Those risks and uncertainties include factors and risks specific to the industries in which Evion Group operates and proposes to operate as well as general economic conditions, prevailing exchange rates and interest rates and conditions in the financial markets, among other things. Actual events or results may differ materially from the events or results expressed or implied in any forward-looking statement.
No forward-looking statement is a guarantee or representation as to future performance or any other future matters, which will be influenced by a number of factors and subject to various uncertainties and contingencies, many of which will be outside the Company’s control.
The Company does not undertake any obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after today's date or to reflect the occurrence of unanticipated events. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions or conclusions contained in this announcement. To the maximum extent permitted by law, none of the Company’s Directors, employees, advisors or agents, nor any other person, accepts any liability for any loss arising from the use of the information contained in this announcement. You are cautioned not to place undue reliance on any forward-looking statement. The forward-looking statements in this announcement reflect views held only as at the date of this announcement.
This announcement is not an offer, invitation or recommendation to subscribe for, or purchase securities by the Company. Nor does this announcement constitute investment or financial product advice (nor tax, accounting or legal advice) and is not intended to be used for the basis of making an investment decision. Investors should obtain their own advice before making any investment decision.
