Evolution Energy Minerals Targets $4M in Entitlement Offer to Boost Tanzanian Projects

Capital Raising to Fuel Strategic Growth

Evolution Energy Minerals Limited (ASX, EV1) has launched a renounceable pro-rata entitlement offer, seeking to raise up to $4.03 million through the issue of approximately 268.9 million new shares at 1.5 cents each. Eligible shareholders will also receive one free attaching option for every two new shares subscribed, exercisable at 2 cents and expiring in September 2028.

The offer is partially underwritten to $1.5 million by Mahe Capital Pty Ltd, with Metals One PLC, a major shareholder and chaired by EV1’s Managing Director Craig Moulton, acting as sub-underwriter. This structure provides a degree of certainty around the capital raise while allowing existing shareholders to participate or trade their entitlements.

Funding Exploration and Development in Tanzania

Proceeds from the offer will primarily support exploration activities at the Chikundo Copper Project and resource development at the Chilalo Graphite Project, both located in Tanzania. These projects position EV1 to leverage the growing demand for copper and graphite, commodities critical to global energy transition efforts such as electrification and decarbonisation.

Additional funds will be allocated to repay a short-term loan, cover offer-related costs, and provide general working capital. The company has emphasised a disciplined, capital-efficient approach to advancing its projects while maintaining balance sheet strength.

Regulatory and Sovereign Risks Remain

EV1’s subsidiary, Kudu Graphite Limited, has received a default notice from the Tanzanian Mining Commission for not commencing mining operations within 18 months of licence grant. While the company has submitted a revised development plan and is engaged in ongoing dialogue with regulators, the risk of licence suspension or revocation remains unresolved.

This regulatory uncertainty, combined with the inherent sovereign risks of operating in Tanzania, including political, legal, and infrastructural challenges, adds a layer of complexity to the company’s outlook. Investors should weigh these factors alongside the growth potential of the projects.

Impact on Shareholding and Control

The entitlement offer is renounceable, allowing shareholders to trade their rights on the ASX. However, non-participation could lead to dilution of approximately 33.33% in shareholding, with potential aggregate dilution reaching 43.22% if attaching options are exercised.

Substantial shareholders ARCH Sustainable Resources GPCo Limited and Metals One PLC may increase their voting power through the offer, potentially influencing company control. The underwriting arrangements also allow Mahe Capital to acquire up to 15.68% voting power if entitlements are not fully taken up.

Looking Ahead

With the offer scheduled to close on 5 March 2026, the market will be watching subscription levels closely as a barometer of shareholder confidence. The company’s ability to navigate regulatory hurdles in Tanzania and advance its copper and graphite projects will be critical to unlocking value for investors.