Kudu Graphite, an 84%-owned subsidiary of Evolution Energy Minerals (ASX: EV1), has signed a non-binding term sheet with ARCH EM (GSY) PCC for a US$2 million commitment. The funds aim to fortify Kudu’s balance sheet and support expenditures related to its assets, particularly the Chilalo Graphite Project. While the agreement is non-binding and subject to approvals, it signifies a substantial vote of confidence from ARCH, a major shareholder.
The commitment is structured through secured convertible loan notes issued in multiples of US$250,000, featuring a 24-month conversion period from the initial drawdown. Kudu will incur an annualised 1% fee on undrawn amounts, paid semi-annually, alongside a 5% arrangement fee on the total US$2 million. Interest will accrue daily at SOFR plus 10% per annum, compounded semi-annually. Executive Director Craig Moulton emphasizes the commitment’s importance in ensuring the company’s future viability and enabling a focus on accelerating project development and pursuing strategic acquisitions in Africa.
The issuance of these notes hinges on ARCH approvals, finalizing documentation, and securing Evolution shareholder approvals. This funding injection is intended to facilitate the Chilalo Graphite Project and potentially expand Evolution Energy Minerals’ presence in Africa’s resource sector.
