EVOLUTION ENERGY MINERALS LIMITED — Capital/Financing Update 2022

Aug 21, 2022

ASX: EV1 | 22 August 2022 ASX ANNOUNCEMENT

Premium performance of non-spherical

by-products in high-value applications

HIGHLIGHTS

 Further processing and testwork of the non-spherical by-product from Evolution’s proposed battery anode flowsheet has outperformed leading products in high-value applications including:

o Battery cathode conductivity enhancement – Chilalo non-spherical by-product

outperforms premium quality primary synthetic graphite; and

o Electrically conductive coatings – alkaline battery cells containing Chilalo’s electrically-conductive coating have a significantly higher discharge capacity (or run time) than premium quality primary synthetic graphite.

 This provides confidence that the non-spherical by-product will achieve premium prices, drastically improving the economics of a downstream battery anode plant.

 Qualification timeframes for these value-added applications are less than 12 months and Evolution has the data to commence qualification initiatives.

r international markets.”

Evolution Energy Minerals (“Evolution” or the “Company”) (ASX: EV1, FSE: P77) is pleased to report the

results of a demonstration project conducted by its US-based technology partner to create premiumperformance electrically conductive coatings and conductivity enhancement materials.

The demonstration projects have produced conductivity enhancement additives and coatings utilizing the finely-sized, ultra-high-purity graphite generated as a by-product in the Company’s process of making spherical graphite for anodes in lithium-ion batteries. Based on testing to date, approximately 36% of the feedstock to the spherical graphite flowsheet generates the non-spherical by-product.

The results reported in this announcement demonstrate the ability to access lucrative market opportunities for this material, indicating the potential to generate value-added revenue from up to 100% of the fine flake concentrate from Chilalo.

Phil Hoskins, Managing Director of Evolution Energy Minerals, commented:

“ We are extremely pleased that Chilalo graphite has not only proven itself to be an exceptional anode material for lithium-ion batteries but also that the non-spherical by-product can find lucrative uses in value-added electrically conductive applications.

“While our commercialisation priority is firmly on the use of Chilalo graphite in the production of anode material for lithium-ion batteries, the ability to utilise the non-spherical by-product in high-value electrically conductive applications is a significant opportunity that we plan to advance in parallel with the production of battery anode materials.”

BACKGROUND

Evolution has been undertaking a commercial verification program with an established US manufacturer of battery graphite products to evaluate the amenability of Chilalo graphite to produce coated battery-ready anode materials using thermal purification and proprietary coating technologies.

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EVOLUTION ENERGY MINERALS LTD
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Level 1, Emerald House, 1202 Hay Street, West Perth WA 6005 | T: +61 8 9200 4960 | ASX:EV1 | ev1minerals.com.au

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EVOLUTION ENERGY MINERALS LTD

The battery anode process flow sheet adopted by Evolution’s US-based technology partner involves thermal purification prior to spheroidization (see Appendix 1 for how Evolution’s flowsheet differs to the conventional flow sheet).

Due to the performance of purified Chilalo graphite in lab testing, the program has expanded to include demonstration projects for the non-spherical by-product in value-added applications with shorter qualification timeframes than EV battery anodes.

Following are details of the products that have been investigated for the non-spherical by-product.

Product 1 – Conductivity enhancement in battery cathodes

By-products from the spherical graphite process are generated in the course of separating usable graphite spheroids from non-spherical graphite. The Company’s US technology partner has milled this non-spherical

graphite further to generate a product with a d50 of approximately 8.3 microns. Owing to the fact this nonspherical graphite is high-purity (>99.99% C), it can be sold into a host of electrically conductive applications, such as conductivity enhancement graphite in primary lithium, lead-acid and alkaline battery cathodes.

To determine the suitability of Chilalo’s thermally purified non-spherical by-product for conductivity

enhancement, its performance has been compared to the industry’s premium grade of primary synthetic graphite, TIMREX MX15 (a product produced by IMERYS Graphite & Carbon, Bodio, Switzerland). The selling price of this product is believed to be approximately US$12,000 per tonne and its main applications are in the cathodes of alkaline batteries (Zinc Manganese Dioxide or EMD batteries) and lead-acid batteries.

Presented below are the testwork results in an alkaline battery industry-standard four-probe ( 4-T ) resistivity test of compression moulded Electrolytic Manganese Dioxide ( EMD ) pellets that contain Chilalo’s thermally purified non-spherical graphite rejects as conductive additive.

This industry-standard test measures the electrical resistance of an EMD pellet as a function of weight percent addition of graphite. The lower the resistance, the better battery it will make, meaning it will produce a longer lasting battery that has higher voltage.

These important features of any battery are directly linked to how conductive the cathode matrix is, which is a feature enabled by graphite. One can see that the higher the weight percent loading of graphite, the lower the resistance. Figure 1 demonstrates that Chilalo’s non-spherical by-product displays similar electrical

performance for batteries containing 5.25% loading of graphite (ie. where the 4T curves intersect). However, most alkaline batteries employ 6.25-8% graphite in their cathodes and in this range, Chilalo’s non-spherical

by-product significantly exceeds the performance of the premium grade primary synthetic graphite, TIMREX MX15.

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Figure 1: Alkaline battery 4-T resistivity test
1000.00
Evolution Milled
Spheroidization
Process Rejects
100.00 Graphite in Tosoh
EMD Matrix
Industry's leading
10.00
synthetic graphite
MX15 (D90=15 um) in
Chilalo significantly Tosoh EMD Matrix
outperforms in this range
1.00
2 7 12
Wt.% Graphite in EMD Matrix
Resistivity (mΩcm)
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These results indicate that alkaline batteries containing Chilalo’s non-spherical by-product are positioned to:

 last longer;

• work at higher operating current densities;

 demonstrate reduced tool wear in cathode manufacturing processes (i.e. natural graphite is far more lubricious than synthetic graphite); and

 enable cost reductions to alkaline battery manufacturers since the superior purity of Chilalo graphite will likely allow reduced loadings of gas suppressant on the anode (which is one of the most expensive materials used in a typical alkaline battery).

The market size for purified graphite as a conductivity enhancement in alkaline batteries is approximately 18,000 tonnes per year in alkaline batteries alone. However, when primary lithium, lead acid, metal-air and lithium-ion battery cathodes are added, the market size is approaching 50,000 tonnes per year.

Product 2 – electrically conductive coatings

The second demonstration project performed by Evolution’s US technology partner subjected Product 1 above to wet grinding using proprietary, commercially scalable technologies from Japan. The end product was formulated into an ultra-high purity electrically conductive dispersion known as an ‘alkaline battery can

coating’. Can coating is sprayed onto the interior of alkaline battery can casings to enhance electrical conductivity, thereby increasing the discharge capacity (run time) of the battery.

Coatings containing Chilalo graphite proved to be significantly more conductive than the control formulation consisting of premium quality primary synthetic graphite. This was measured by resistivity of 21 Ωin (Ohminches) for Chilalo material compared to 29.5 Ωin for the control formulation (note that industry-standard resistivity is 30 Ohm-inches and Chilalo material is 30% lower (ie. more conductive)).

To further quantify the benefits of Chilalo’s premium-performance electrically conductive coatings, Evolution’s US technology partner assembled AA-sized alkaline battery cells. The interiors of the alkaline battery cans were separately spray-coated with both Chilalo and the aforementioned premium quality primary synthetic graphite formulations. The electrochemical outcomes are presented in Figure 2.

Figure 2: Performance of alkaline battery cells with a can coating based on Evolution’s ultra-high purity flake vs the commercial premium performance primary synthetic graphite

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2
1.6
1.2
0.8
0.4
Evolution Can Coating KS-15 Can Coating (Control) 1262mAh 1414mAh
0
0 200 400 600 800 1000 1200 1400 1600
Capacity, mAh
Voltage, V
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It is clear that alkaline battery cells containing Chilalo’s electrically-conductive can coating have a significantly higher discharge capacity (or run time) than premium quality primary synthetic graphite.

In particular, cells with the Chilalo formulation displayed a discharge capacity of 1,413.5 mAh[1] , while the

control formulation cell delivered 1,263 mAh. This represents a ~10.7% improvement in run time of the Chilalo formulation over the control.

Current market pricing for graphite with similar properties to Chilalo’s non-spherical by-product is US$12,000 per tonne. For use in the can coating application, the graphite pigment amounts to approximately 20% of the overall formulation, while the rest of the dispersion is fairly low-cost commodity chemicals and water. This effectively increases the commercial value of graphite by a factor of five to a true sales value up to US$60,000 per tonne on a dry graphite product basis.

The non-spherical by-products produced from Evolution’s spherical graphite flowsheet have numerous applications outside of electrically conductive can coatings including as electrically conductive coatings and dispersions for plastics, polymers and rubber. These have a market size of approximately 13,000 tonnes per year.

Commentary

A focus on quality over quantity is critical to maximising the value of Chilalo graphite and these demonstration projects are just part of the continued product innovation and discovery to unlock the significant value in

Chilalo’s high quality graphite as the Company progresses towards becoming a vertically integrated producer. As an example, selling 200 tonnes into alkaline battery can coatings at effectively US$60,000 per tonne generates equivalent revenue to selling 15,000 tonnes of fine flake concentrate for US$800 per tonne.

Following these excellent results, Evolution is reviewing its entire downstream business plan to not just target battery anode materials but other high-value products with potentially shorter qualification timeframes.

The technology required to transform Chilalo fine flake concentrate into high-value downstream products is well understood and relatively inexpensive, particularly with regards to the potential value uplifts that are possible.

This announcement has been approved for release by the Evolution Board of directors.

For further information please contact:

Phil Hoskins Michael Bourguignon Andrew Rowell Managing Director Executive Director White Noise Communications phoskins@ev1minerals.com.au mbourguignon@ev1minerals.com.au andrew@whitenoisecomms.com T: +61 8 9200 4960 T: +61 8 9200 4960 T: +61 400 466 226

European investor relations

Eva Reuter Dr Reuter Investor Relations e.reuter@dr-reuter.eu T: +49 69 1532 5857

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1 mAh = Specific capacity rating of the battery in milliampere hours (mAh)

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Appendix 1: Evolution’s flow sheet to produce battery materials compared to conventional flow sheet

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