Evion’s flagship Maniry project in Madagascar is south of TSX-listed NextSource Materials’ 17,000 tonne per annum Molo development that transitioned to production in June.
While Evion’s market cap is just A$12 million, NextSource is capitalised at C$234 million.
“Molo proves you can build a project, and we are in the same location, same geology, the same everything,” Revy said.
Ready to roll
NextSource is just a little ahead of Evion, which is shovel-ready at Maniry, and which is just months away from producing expandable graphite via its 50% owned joint venture in India that is set to produce up to 2000-2500tpa starting later this year.
The Panthera JV will initially process third-party graphite, but gives Evion a net present value of US$38 million for its share. It has cost just $3 million to establish and has a payback period of 1.2 years.
Stage one, which is expected to produce 2000-2500 tonnes per annum of expandable graphite, should generate a total pre-tax net cashflow of $219 million, based on numbers Evion says are vastly more conservative than some other market players.
Again, compared to the market cap it doesn’t make a lot of sense to Revy.
While the hype about batteries is all about lithium, he told the conference it would be foolish to ignore graphite demand, especially with a predicted shortfall looming in 2027 as demand ramps up.
New mines take around a decade to develop on average, from discovery to first production, and graphite projects have around a three-year qualification process, which means projects that are effectively development ready now are in prime position.
Currently, battery producers are hoovering up all the available tonnes, which is stressing supply chains for other uses of graphite, adding to the demand tensions.
Revy said what gets him up every day is that Evion is ready to mine, and is already well down the path with its battery anode material strategy, with a prefeasibility study due next year for a 15,000-30,000tpa BAM plant in Germany, fed by Maniry.
Its downstream plans are being advanced with Urbix, which is already signed up as an offtake partner for its own US ambitions.
With Madagascar’s legacy of graphite production, producing some of the best in the world, Revy said Evion was set up to become a material producer of diversified graphite products, particularly as buyers are looking for raw and processed material that haven’t passed through China.
Maniry has reserves of 16Mt at 6.6% total graphitic carbon, resources of 40Mt at 6.5% TCG and an exploration target of 260-380Mt at 6-8% TGC.
The 500,000tpa Maniry stage one is expected to cost around US$79 million, while stage two could double production at a cost of $25 million. Payback is under four years.
Its reserves are sufficient to support an 18 year project with a post-tax NPV of $205 million, and life-of-mine earnings of $857 million.
The Razafy NorthWest deposit is open in multiple directions, while north of Molo Evion also has the Ianapera project where trenching has defined more high-grade graphite. An exploration target of 20-34Mt at 10-20% TGC has been defined.
Revy said that with A$4 million in the bank and a project ready to roll, he believes Evion will enjoy a major re-rating as it emerges as one of the largest graphite producers outside China.
Evion was capitalised at $12 million based on its last traded price of 3.3c.
