SRG:CC - SRG and C-ONE sign strategic cooperation and investment agreement C-ONE to acquire 19.4% stake in SRG SRG and C-ONE to sign Anode Material Alliance to jointly develop large-scale anode material facility and become the largest anode material supplier outsi
(TheNewswire)
Montreal, Canada, July 10, 2023 - SRGMining Inc. (TSXV: SRG) (“ SRG ” or the“ Company ” ) announced today that Carbon ONE NewEnergy Group Co., Ltd (“ C-ONE ”) has agreedto acquire a 19.4% stake in SRG. C-ONE is an innovative anode materialindustry leader and one of the lowest cost anode material producers inChina.
Under terms of the agreement, SRG will issue 28,222,380common shares to C-ONE (or its designated affiliate) through a privateplacement at a price of C$0.60 per share, yielding gross proceeds toSRG of approximately C$16.9 million (US$12.7 million).
SRG intends to use the proceeds for the advancement ofthe company’s large-scale mine development project in the Republicof Guinea ? the Lola Graphite Project ? as well as to acceleratethe development of an anode material plant in a country with access tomarkets in the European Union and North America and for generalworking capital and corporate purposes.
On closing, C-ONE will come to own 19.4% of SRG’sissued and outstanding common shares establishing C-ONE as one ofSRG’s largest shareholders. SRG’s largest shareholder, La ManchaFund SCSp (“ LaMancha ”), which acquired a 24.1% stake in SRGin 2022, will partially exercise its anti-dilution right such that atclosing both La Mancha and C-One come to own 19.4% of SRG’s enlargedissued and outstanding common shares.
Matthieu Bos, President and Chief Executive Officer ofSRG, commented that “the investment allows SRG to benefit fromC-ONE’s extensive technical experience and globally recognized brandto position SRG as a fully integrated producerof battery anode material. The development ofthis critical component of EV batteries will help the world meet itscarbon emission reduction targets to combat climatechange" .
“The investment will allow SRG to advance thedevelopment of the Lola Graphite Project as well as accelerate thedevelopment of a large-scale industrial facility to produce 100,000tonnes per annum coated, spheroidized and purified graphite. We areconfident that C-ONE shares our vision, and the vision of ourshareholders, and has the experience to help us advance towardsbecoming a fully integrated anode material producer outside of China,creating value for SRG stakeholders in the Republic of Guinea, alongwith our international shareholders,” added Mr. Bos.
“We are excited about our alliance with SRG,” saidYue Min, Chairman of C-ONE. “We share acommon vision to develop one of the largestproduction facilities of high-quality andcost-competitive anode material outside of Chinato support the growing battery markets in Europe and NorthAmerica, and we will jointly continue to leadthe direction of anode materials, defining the new future ofanodes. ” added Mr. Yue.
The transaction is subject to approval by the TSXVenture Exchange, other customary closing conditions, recordals andregistration with certain Chinese regulatory agencies as well as theCanadian Government, namely pursuant to a voluntary notificationfiling pursuant to the Investment Canada Act . Completion of thetransaction is expected to occur by Q1 2024. The common shares will besubject to a four month and one day hold period from the date of theirissuance in accordance with applicable securities laws and thepolicies of the TSX Venture Exchange.
Upon closing of the private placement, SRG and C-ONEwill enter into an investor rights agreement. Among its keyprovisions, C-ONE will have the right to nominate two directors –one of whom will be independent – to SRG’s expanded eight (8)member board.
Anode Material Alliance
C-ONE and SRG aim to develop a fully integrated sourceof battery anode material to supply the European and North Americanmarkets. T healliance between C-ONE and SRG (the “ Anode Material Alliance ”) will develop strategy to upgradeSRG and third-party graphite concentrates that meet all of C-ONE’srequirements and end-product specifications, while promotingindustry-leading supply chain transparency and sustainabilitystandards from mine-to-market. The location of the Anode MaterialAlliance facilities will be in a mutually agreeable country that hasfree trade agreements with the key European and/or North Americanend-markets.
The SRG subsidiary that will own the Anode MaterialAlliance will be hundred percent owned and funded solely by SRG. C-ONEwill provide all necessary engineering, intellectual property,qualification, construction and operating expertise to produce coated,spheroidized and purified graphite (“ CSPG ”). Inaddition, C-ONE will receive a marketing fee on all CSPG sales to itsexisting third-party customers such as Tesla, Samsung and CATL as wellas new third-party customers in Europe and North America. C-ONE andSRG will share the future profits of the Anode Material Alliance . The Anode Material Alliance is expected to be governed by agovernance agreement that is expected to be negotiated and signed oncethe strategy has been defined, the location has been finalised, andthe construction permits have been obtained.
C-ONE and SRG have agreed to transact exclusively witheach other in relation to the Anode Material Alliance for a period ofseven (7) years.
Technical CooperationAgreement
C-ONE and SRG will work collaboratively to develop theLola Graphite Project in the most capital and time efficient way.C-ONE will provide a “turnkey” engineering, procurement andconstruction (“ EPC ”) proposal to SRG for the development ofthe Lola Project, leveraging its recent experience in the developmentof a large-scale mine and associated concentrator in China. The EPCproposal for the Lola Graphite Project will be delivered to SRG, forits sole consideration, within 3 months from the closing of theprivate placement.
Furthermore, SRG expects to significantly benefit fromC-ONE’s extensive experience in the production of CSPG as itprogresses the Anode Material Alliance. C-ONE will provide a“turn-key” EPC proposal to SRG for the development of the AnodeMaterial Alliance facilities.
About C-ONE
A leading private anode materials company in China,C-ONE was founded in 2022 by Chairman Yue Min. Mr. Yue is a co-founderof BTR New Material Group Co., Ltd, the largest anode materialscompany in the world, and is a pioneer in China’s graphite andsilicon-based anode industry. As a principalinventor, Mr Yue is a leading authority with over 30 years ofexperience in anode materials who has drafted numerous industrystandards and has over 300 battery-related patents in his name.
C-ONE has assembled a large production base for variousanode materials that sets the benchmark in the industry, includingnatural flake graphite. C-ONE is an innovative anode material industryleader and one of the lowest cost anode material producers in China,with a current installed capacity of 300,000 tonnes per annum(“ tpa ”) of CSPG .C-ONE owns several natural flake graphite mines that feed 250,000 tpaof spheroidizing capacity, 175,000 tpa ofchemical purification capacity and 100,000 tpa of thermal purificationcapacity as well as 300,000 tpa of ALD-like coating capacity.
In addition to natural flake graphite material, C-ONEhas the capacity to produce 150,000 tpa of artificial graphite andplanned production of 15,000 tpa of silicon-based products.
About SRG
SRG Mining is a Canadian-based mining company focusedon developing the Lola Graphite Project located in the Republic ofGuinea, West Africa. The Lola Graphite Project has Proven and Probable Reserves of 41Mt at a grade of 4.14%Cg . SRG aims to develop a fully integratedsource of battery anode material to supply the European and NorthAmerican lithium-ion and fuel cell markets. With attractive operatingcosts, proximity to European end-markets and strong ESG credentials,the Company is poised to become a reliable supplier while promotingsustainability and supply chain transparency. SRG is committed to generating sustainable, long-term benefits thatare shared with the host countries and communities where itoperates.
For additional information, please visit SRG’swebsite at www.srgmining.com .
Contact :
Matthieu Bos Matt Johnston
President & CEO CorporateDevelopment Advisor
Email: m.bos@srgmining.com Email: m.johnston@srgmining.com
Neither the TSXV nor its RegulationServices Provider (as that term is defined in the policies of theTSXV) accepts responsibility for the adequacy or accuracy of thisrelease.
This press releasecontains "forward-looking information" within the meaning ofCanadian securities legislation. All information contained herein thatis not clearly historical in nature may constitute forward-lookinginformation. Generally, such forward-looking information can beidentified by the use of forward-looking terminology such as“intends”, “accelerate”, advance”, “confident”,“aim”, “develop”, “expected”, “include”, “will”,“become”, “continue”, “deliver”, “believe”, orvariations of such words and phrases or state that certain actions,events or results "may", "could","would" or "might". Forward-looking information issubject to known and unknown risks, uncertainties and other factorsthat may cause the actual results, level of activity, performance orachievements of the Company to be materially different from thoseexpressed or implied by such forward-looking information, including but not limited to: (i) volatile stock price; (ii)the general global markets and economic conditions; (iii) thepossibility of write-downs and impairments; (iv) the risk associatedwith exploration, development and operations of mineral deposits andmine plans for the Company’s mining operations; (v) the riskassociated with establishing title to mineral properties and assetsincluding permitting, development, operations and production from theCompany’s operations being consistent with expectations andprojections; (vi) fluctuations in commodity prices, finding offtaketakers and potential clients or enforcing such agreements againstsame, (vii) prices for diesel, process reagents, fuel oil, electricityand other key supplies being approximately consistent with currentlevels; (viii) production and cost of sales forecasts meetingexpectations; (ix) the accuracy of the mineral reserve and mineralresource estimates of the Company; (x) labour and materials costsincreasing on a basis consistent with the Company's currentexpectations; (xi) there being no significant disruptions affectingthe operations of the Company whether due to COVID-19 restrictions,the war in Ukraine, artisanal miners, access to water, extreme weatherevents and other or related natural disasters, labour disruptions,supply disruptions, power disruptions, damage to equipment orotherwise; and (xi) asset impairment (or reversal) potential, beingconsistent with the Company's current expectations. and other risksand factors described or referred to in the section entitled"Risk Factors" in the MD&A of the Company and which isavailable at www.sedar.com, all of which should be reviewed inconjunction with the information found in this news release.
Although the Company has attempted to identifyimportant factors that could cause actual results to differ materiallyfrom those contained in the forward-looking information, there may beother factors that cause results not to be as anticipated, estimatedor intended. There can be no assurance that such forward-lookinginformation will prove to be accurate, as actual results and futureevents could differ materially from those anticipated in suchforward-looking information. Such forward-looking information has beenprovided for the purpose of assisting investors in understanding theCompany's business, operations and exploration plans and may not beappropriate for other purposes. Accordingly, readers should not placeundue reliance on forward-looking information. Forward-lookinginformation is given as of the date of this press release, and theCompany does not undertake to update such forward-looking informationexcept in accordance with applicable securities laws.
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