US$2 Million Commitment for Kudu Graphite Limited

Evolution Energy Minerals Limited (ASX: EV1) (Evolution or the Company) advises that Kudu Graphite Limited (Kudu) – the 84% Evolution owned subsidiary has signed a non-binding term sheet with ARCH EM (GSY) PCC Limited (Cell SRF) (ARCH) for a US$2 million commitment.

The ARCH commitment will take place through the issue of secured convertible loan notes (Notes); issued in integral multiples of no more than US$250,000, with a 24-month conversion period from the date of the first draw down.

Kudu will pay an annualised 1% commitment fee on any undrawn amount semi-annually in cash or PIK notes together with a 5% arrangement fee on the US$2 million to be paid on the date of the first drawdown of Notes in cash or PIK notes. Interest payable will be SOFR + 10% per annum accruing daily and compounding semi-annually for all Notes, including the Commitment Fee, paid in cash or PIK notes.

The issue of the Notes is subject to the receipt of relevant ARCH approvals, finalising and executing the longform documentation and Evolution obtaining required Shareholder approvals.

The funds will strengthen the balance sheet of Kudu and support asset related expenditure. Proceeds can be used to fund corporate costs of Evolution on a limited basis.

There is no guarantee that a binding agreement will be reached and therefore no certainty the transaction will occur. The Evolution Board will update Shareholders and the market in due course.

Kudu will be responsible for the issue of the Notes to ARCH; there will be no impact on Evolution’s placement capacities under Listing Rules 7.1 and 7.1A.

Craig Moulton Executive Director commented: “This material financial commitment by our major shareholder (ARCH), demonstrates their confidence in the quality of the Chilalo Graphite Project, and its project development by the EV1 Board. These funds will also ensure the future viability of the Company and will enable us to focus on accelerating project development. We will also pursue previously announced value accretive project acquisitions in Africa.”