EcoGraf (ASX: EGR) has advanced financing, technical, and strategic partnership work across its vertically integrated graphite and battery anode materials business during the March quarter.
The company completed an updated bankable feasibility study for the Epanko graphite project in Tanzania, confirming a pre-tax net present value of US$516 million and an internal rate of return of 31.1%.
The study also confirmed a 21.7% increase in planned plant throughput to 73,000 tonnes per annum and forecast annual EBITDA of US$85.7m.
EcoGraf also strengthened its downstream growth pathway through new battery anode materials partnerships with Mitsubishi Chemical Corporation and Taiwan-based Long Time Technology, alongside European Investment Bank support for its HFfree purification business.
Epanko Financing Work Advances
KfW IPEX-Bank is leading the Epanko debt financing program and has been mandated to arrange up to US$105m in senior debt under the German Government’s Untied Loan Guarantee program.
The German program supports projects capable of providing long-term critical minerals supply for German industry, with the Epanko project receiving non-binding indication of in-principle eligibility for import credit cover.
EcoGraf is now working with KfW and its advisers to finalise the debt finance bank model after submission of the independent engineer’s report and other due diligence workstreams.
Completion of this work will allow the process to move toward appointment of an independent expert for Euler Hermes, representing a key step toward securing a binding offer of cover.
BFS Confirms Development Case
The updated Epanko study followed 24 months of technical optimisation aimed at aligning the project with current market demand and addressing previous independent engineer recommendations.
The work included changes to meet international tailings management standards introduced through the Global Industry Standard on Tailings Management in 2020.
The independent engineer’s review confirmed all additional pre-signing work required by the review had been completed and that project designs now comply with international standards specified by KfW.
The review also positions Epanko against major international project finance standards, including International Finance Corporation performance standards, Equator Principles, and World Bank environmental, health, and safety guidelines.
Partnerships Support Downstream Strategy
EcoGraf executed a non-binding memorandum of understanding with Mitsubishi Chemical Corporation covering cooperation across product supply, qualification, and potential long-term commercialisation of natural flake graphite, unpurified spherical graphite, and purified spherical graphite.
Subject to successful technical assessments, Mitsubishi Chemical will consider a long-term product sales arrangement for 10,000 tonnes per aannum of unpurified or purified spherical graphite or about 16,500tpa of minus-100 mesh natural flake graphite.
The proposed cooperation supports EcoGraf’s integrated anode materials strategy including Epanko, a proposed mechanical shaping facility, and planned HFfree purification facilities featuring a proposed purification facility in Japan.
EcoGraf also signed a non-binding MoU with Long Time Technology to collaborate on HFfree purification facilities in South-east Asia and Taiwan, with the proposed cooperation covering technology development, potential offtake and investment structures.
European Support Adds Momentum
EcoGraf signed a co-operation agreement with the European Investment Bank for technical assistance to support its vertically integrated HFfree business in the critical raw materials sector.
The assistance will support key initiatives including the Epanko expansion study, the midstream mechanical shaping facility in Tanzania and integration into the European Union battery anode value chain.
The agreement reflects recognition of Epanko as a potential contributor to sustainable battery mineral supply chains.
EcoGraf has also been encouraged to apply for Strategic Project status under the Critical Raw Materials Act.
Community and ESG Work Progresses
EcoGraf progressed an application for co-funding through DEG Impulse under the develoPPP program to support community development initiatives linked to Epanko.
The proposed program covers resettlement village infrastructure, education upgrades, a community health centre, vocational and skills training, native plant conservation, local enterprise development, waste and recycling facilities, and environmental restoration initiatives.
Environmental and social planning also advanced, with the environmental and social management plan update report submitted to Tanzania’s National Environment Management Council in February.
The annual corporate social responsibility plan has been approved by Ulanga District Council and includes health insurance coverage for elderly residents and financial contributions toward local primary school classrooms.
Gold Portfolio Adds Exploration Upside
EcoGraf also advanced its Tanzanian gold portfolio, including the Golden Eagle farm-in with AngloGold Ashanti.
The company’s Golden Frontier portfolio covers more than 3,000 square kilometres across Golden Eagle and three Frontier projects, with 21 prospective gold targets identified to date.
At the Hazina prospect within Southern Frontier, exploration has defined a roughly 3km target corridor with rock-chip assays of up to 4.45 grams per tonne gold and stream sediment anomalies of up to 8,820 parts per billion gold.
EcoGraf ended the quarter with $6.2m in cash after $1.1m in evaluation and exploration expenditure, primarily associated with Epanko activities.
