While Evolution is still to release its updated definitive feasibility study, the company has finalised an all-important framework agreement with the Tanzanian government that sets the foundation for the joint holding company, Kudu Graphite.
It sees Evolution following in the footsteps of graphite rival Black Rock Mining, emerging gold miner OreCorp and mineral sands hopeful Strandline Resources, who signed some of the first framework agreements back in December 2021 under the African nation's revised mining code.
Kudu will be 84% owned by Evolution, with a 16% free-carried stake controlled by the government.
The mining licence and four surrounding prospecting licences will be surrendered and reissued to Kudu.
Managing director Phil Hoskins said the agreement would provide the certainty needed by the financiers Evolution hopes to lock in following the release of its DFS in the coming weeks, suggesting a high-margin project that is "well positioned to secure finance for development".
Previous work on Chilalo outlined an US$87 million project with a net present value of $323 million.
Evolution claims Chilalo has some of the best flake graphite globally, and Argonaut Securities has flagged it for a special mention in its review of the best undeveloped projects on the ASX last year.
Tanzania's mining code was substantially re-written in the middle of the last decade, slowing the progress of a slew of projects, including Chilalo, which only started advancing again once Evolution was spun-out of Marvel Gold (previously Graphex Mining) in 2021 following a change in president.
A formal signing is expected later this month.
Evolution is the third ASX-listed graphite player to secure terms, behind Black Rock and Walkabout Resources, which is advancing development of its Lindi Jumbo graphite mine.
Other companies looking to finalise framework agreements are Magnis Energy Technologies for its Nachu graphite project, EcoGraf for its Epanko graphite project, and Peak Rare Earths for its Ngualla development.
Evolution is also advancing studies into value-adding with offtake partner Yichang Xincheng Graphite.
Evolution remains well funded with A$10 million cash remaining, following a $13 million placement at 31c last year.
Evolution shares have traded in a range of 20-56c over the past year, and were up 13% today at 30c, valuing it at $61 million.
