Euro Manganese (ASX:EMN) has signed definitive agreements with OMRF for US$100 million in non-dilutive financing for the Chvaletice Manganese Project in the Czech Republic.
OMRF is managed by global asset management firm Orion Resources Partners Group.
Stifel Nicolaus Europe is acting as financial advisor to the company while Norton Rose Fulbright is acting as legal counsel.
Euro Manganese, which has a $42.28 million market capitalisation, says the funding package is expected to close before the end November 2023. Funding will be split into two US$50 million components and deployed towards development works at the project.
The components include a loan facility convertible into a 1.29% to 1.65% royalty on project revenues and a royalty financing of 1.93% to 2.47% on project revenues following a Financial Investment Decision (FID).
As of 10:30am AEDT, Euro Manganese’s share price had increased by 60% to $0.16.
As part of the convertible loan facility, Euro expects to receive US$20 million upon closing and an additional US$30 million upon meeting milestones that have been developed together with Orion to match Euro’s plans on a FID.
In connection with the funding package, the company has agreed to pay a cash placement fee equal to 2.5% due and payable to Stifel on the date of closing of each portion of the convertible loan facility and on the closing of the royalty financing.
Euro Manganese notes royalties in both agreements have an embedded sliding scale mechanism and will be calculated on a quarterly basis.
Meanwhile, Euro Manganese notes Orion has an off-take option of between 20% to 22.5% of the project’s ‘high-purity’ manganese total production for a term of 10 years from first delivery.
Euro Manganese President and Chief Executive Officer (CEO) Matthew James says the funding package is ‘transformative’ for the company and facilitates the best possible pathway for a FID.
“The non-dilutive, tranche structure minimises cost of funds and reduces future project financing requirements. This further validates the robust nature of the Chvaletice Project and our team’s ability to deliver this strategic battery raw material project for Europe to the highest of standards.”
Euro Manganese is a battery materials company focused on becoming a producer of ‘high-purity’ manganese for the EV industry.
Orion Resource Partners Group represents a $8.2 billion global asset management firm that specialises in institutional investment strategies in precious and energy transition metals and minerals.
Write to Adam Drought at Mining.com.au
Images: Euro Manganese