Metals One buys into Evolution Energy Minerals and part-underwrites rights issue
Metals One has taken a strategic swing at the graphite market, acquiring a meaningful stake in Evolution Energy Minerals and agreeing to underwrite part of Evolution’s current rights issue. The prize is exposure to Evolution’s Chilalo Graphite Project in Tanzania, described as development-ready with binding offtake agreements covering more than 90% of planned production.
For Metals One shareholders, this is a diversification move into a critical battery material at a time when geopolitics is reshaping graphite supply chains.
Deal terms at a glance
| Shares purchased | 37,900,000 Evolution shares (RNS states “37,900,000 million”, clearly a typo; total consideration confirms 37,900,000) |
| Purchase price | A$0.011 per share |
| Total consideration | A$416,900 (approximately £202,000) |
| Initial stake post-purchase | 10.45% of Evolution |
| Rights issue price | A$0.01 per share |
| Total rights issue size | A$1.45 million (fully underwritten) |
| Metals One underwriting | Up to A$530,000 (approximately £257,000) |
| Resulting position | Up to approximately 88 million shares, or about 17.37% of Evolution’s enlarged share capital |
Note: Metals One will not hold rights as a shareholder in the rights issue. The company is participating via a partial underwriting rather than by taking up rights.
Why Chilalo matters: development-ready graphite in Tanzania
Evolution’s flagship is the Chilalo Graphite Project in south-eastern Tanzania. It carries a post-feasibility valuation with NPV8 (net present value at an 8% discount rate) of A$518 million and an IRR (internal rate of return) of 32%. Those are robust economics for a graphite project, especially with binding offtakes already in place for more than 90% of planned production.
Chilalo has a JORC Resource of 67.3 Mt at 5.4% total graphitic carbon (TGC) for 3.7 Mt of contained graphite. Mineralisation is near surface, which can help project economics, and 2023 work identified new high-grade zones at Chilalo East and Chilalo E2 that point to exploration upside.
Strategic location and peer context
The deposit sits within the Mozambique Mobile Belt, a known graphite province that also hosts Syrah’s Balama and Ryzon’s Nachu. That regional context matters in graphite – it suggests a favourable geological setting with established precedent for large-scale operations.
The graphite backdrop: tariffs, supply chains, and why timing helps
Graphite is on strategic mineral lists in the USA, EU, and Japan. The kicker in this RNS is policy: the US Commerce Department announced in July 2025 a 93.5% tariff on anode active materials from China, which covers graphite. With the US importing US$143 million of graphite this year, non-Chinese supply is in demand. Projects like Chilalo positioned in a favourable jurisdiction could benefit.
What Metals One gets from Evolution Energy Minerals
- Exposure to a development-ready graphite project with offtakes already covering the majority of production.
- Portfolio diversification beyond uranium, nickel, copper, PGE and gold into a battery-critical commodity.
- A supportive shareholder base at Evolution, including ARCH Sustainable Resources Fund with a 25% holding.
Governance watch: related party underwriting
Craig Moulton, Metals One’s Chairman, is also an executive director of Evolution. That makes Metals One’s partial underwriting of Evolution’s rights issue a related party transaction under AIM Rules. The independent directors, Jonathan Owen and Daniel Maling, after consulting the Nominated Adviser, consider the terms fair and reasonable and in the best interests of shareholders.
It is good practice that this was flagged and independently assessed. Investors should always note the inherent conflict risk in related party dealings, even when procedures are followed.
Evolution’s financial footing
For the year to 30 June 2024, Evolution reported a loss before tax of A$10,576,353 on nil revenue and had net assets of A$8,162,878. That is typical for a pre-production developer but underlines the dependency on project financing and execution at Chilalo.
Jargon buster
- Rights issue: existing shareholders are offered new shares, typically at a discount, to raise capital.
- Underwriting: a backstop commitment to buy any rights issue shares not taken up by shareholders, ensuring the raise completes.
- Offtake agreement: a customer contract to purchase future production, often helping with project finance.
- NPV8 and IRR: standard project valuation metrics. NPV8 discounts future cash flows at 8%. IRR is the annualised return of those cash flows.
- TGC: total graphitic carbon, the key grade metric in graphite resources.
My take: positives, risks, and what to watch next
Positives
- Compelling entry point: Metals One bought stock at A$0.011 per share, a 10% premium to the rights price but modest in absolute terms, for A$416,900. The partial underwriting up to A$530,000 could take the position to about 17.37%.
- Project quality signals: NPV8 of A$518 million, 32% IRR, near-surface resource, and >90% offtake coverage are all supportive of financing prospects.
- Macro tailwinds: US tariffs on Chinese anode materials and Chinese export controls sharpen the case for ex-China graphite supply.
- Shareholder alignment at Evolution: the presence of ARCH Sustainable Resources Fund with 25% provides a credible cornerstone.
Risks
- Pre-production risk: Evolution had nil revenue and a sizeable loss in FY24. Funding, build, and ramp-up risks remain.
- Country and permitting risk: Tanzania is considered one of the more stable African jurisdictions, but it is still a non-OECD mining venue with potential policy variability.
- Related party optics: procedures have been followed, but investors should monitor governance and pricing discipline in any future transactions with Evolution.
- Commodity price risk: graphite pricing is cyclical. Returns depend on realised prices for flake sizes and potential anode-grade products.
What success could look like for Metals One
If Chilalo advances through financing and into construction, Metals One would hold a significant minority position in a near-term graphite producer. That could translate into enhanced portfolio value and better optionality across the company’s broader critical minerals strategy. The potential to supply ex-China markets with binding offtakes already secured is a real differentiator.
Key watch items and timeline signals
- Completion of the rights issue and confirmation of Metals One’s final shareholding in Evolution.
- Financing milestones for Chilalo, including engagement with development banks and industry partners such as YXGC and BTR New Material Group.
- Any updates on resource growth from Chilalo East and E2, which could further de-risk the mine plan.
- Movement in US and EU policy on graphite, which could tighten or relax market dynamics.
Bottom line
This is a focused, relatively low-cost bet on a high-quality graphite development with strong offtake coverage and supportive macro winds. Metals One is swapping a bit more cash exposure for greater strategic influence via the underwriting, aiming for up to about 17.37% of Evolution. The prize is leverage to a project with A$518 million NPV8 and 32% IRR, but as ever with development stories, execution and financing remain the hurdles to clear.
