Euro Manganese Inc. (EMN) signs a strategic investment agreement with the European Bank for Reconstruction and Development (EBRD) for CAD$8,499,500.
The EBRD hired an independent, international natural resources consultancy to conduct a technical and environmental study of the Chvaletice Manganese Project as part of the due diligence process. The EBRD’s Environmental and Social Policy is progressive and follows international best practices, which EMN recognized. EMN has committed to upholding the EBRD’s environmental, social, and economic inclusion requirements, as well as its equal opportunity policies.
As the European Union (“EU”) plots a course toward better supply security and sustainability, the Company’s partnership with the EBRD is likely to be extremely strategic. These EU goals are aligned with supporting the development project of Europe’s only primary producer of high-purity manganese, a crucial battery raw ingredient.
The investment will be made through a private offering of 17,800,000 common shares of the Company at a price of CAD$0.4775 per share to the EBRD (the “Placement”). EBRD will own approximately 4.5 percent of the Company’s common shares after the Placement closes (on a non-diluted basis). In connection with the Placement, EMN and the EBRD will enter into a project support agreement under which the EBRD will be granted rights to participate in future financings in order to preserve its pro proportionate equity interest in the Company, subject to certain restrictions.
The proceeds from the Placement will help the Company fund the Chvaletice Manganese Project in the Czech Republic, including the feasibility study, site preparation, and operating costs for the Demonstration Plant, as well as environmental work such as permitting and other activities related to the Final Environmental and Social Impact Assessment.
Euro Manganese’s association with EIT InnoEnergy, which entered into an agreement with EMN earlier this year to aid in procuring project funding and customer off-take agreements, facilitated the deal between the EBRD and Euro Manganese. According to the agreement between EMN and EIT InnoEnergy, the Company will pay EIT InnoEnergy a cash finder’s fee of CAD$254,985, or 3% of the gross proceeds of the Placement, upon completion of the Placement.
The Placement is subject to the usual and customary conditions precedent for a transaction of this sort, such as the TSX Venture Exchange’s approval (“TSXV”). According to Canadian securities rules, the common shares to be offered to the EBRD under the Placement will be subject to a four-month and one-day hold period after the Placement closes.