The company noted that the capital cost of US$120 million, even after inflation, was low compared to other graphite development projects.
"Capex of $120 million, In our opinion, will be a financeable number as the graphite market is improving," Evolution managing director Phil Hoskins said this morning.
The project has a post-tax net present value (8% discount rate) of $338 million and post-tax internal rate of return of 32%, in line with the 2020 study.
The payback period is 3.3 years with annual EBITDA of $82 million expected.
Chilalo will produce an average 52,000 tonnes per annum of graphite concentrate over a 17-year mine life.
The operating margin is estimated at 52%, driven by the coarse flake nature of Chilalo's product.
The average sale price is forecast at $1614 per tonne, based on today's prices.
Hoskins stressed that Chilalo did not require higher prices to make money.
Hoskins believes graphite is at an inflection point as the battery market reaches 50% of graphite demand. It's expected to reach 70% towards the end of next year.
"Our expectation is there's going to be a rising price environment," he said.
He said all advanced projects needed to be developed if graphite was to avoid the same sort of massive price spike as seen in lithium.
The company has signed a binding offtake agreement with Yichang Xincheng Graphite Co for the sale of 30,000tpa of coarse flake graphite for the first three years of operation, covering more than 50% of Chilalo's production for the first three years.
Evolution has intentionally left its fine flake graphite uncontracted to an offtake agreement and intends to pursue vertically integrated downstream processing into coated spherical purified graphite in the US.
The company will provide more information on its US-based downstream processing initiative in the coming months.
A framework agreement with the Tanzanian government is expected to be signed imminently after the terms were finalised earlier this month.
Auramet International has been appointed to assist the company with financing with multiple expressions of interest already received.
"Banks are happy to back Tanzania right now," Hoskins said.
The company can't start earthworks until it relocates people living near the project but will use the expected six month-period for advanced design work.
Construction of the project is expected to take 18 months and Hoskins said the project was on track for commissioning in 2025.
Shares in Evolution jumped 17.6% to A30c.
