Orion Resource Partners to Support Euro Manganese with US$100 Million Funding Towards the Development of the Chvaletice Manganese Project
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NR 2023-20
Orion Resource Partners to Support Euro Manganese with US$100 Million
Funding Towards the Development of the Chvaletice Manganese Project
VANCOUVER, British Columbia (November 28, 2023) - Euro Manganese Inc. (TSX-V and ASX: EMN; OTCQX:
EUMNF; Frankfurt: E06) (the "Company") is pleased to announce that it has signed definitive agreements
with OMRF (BK) LLC ("Orion"), which is managed by the Orion Resource Partners Group , for US$100
million in non-dilutive financing (the "Funding Package") to advance the development of the Chvaletice
Manganese Project (the "Project") in the Czech Republic.
Highlights
• The US$100 million Funding is split into two US$50 million components:
o A US$50 million loan facility, convertible into a 1.29-1.65% royalty on Project revenues
(the "Convertible Loan Facility"), with US$20 million to be received upon closing and an
additional US$30 million received upon meeting milestones that have been developed
together with Orion to match E uro Manganese’s plans on a Final Investment Decision
("FID"); and
o Receipt of US$50 million in exchange for a 1.93-2.47% royalty on Project revenues
following FID (the "Royalty Financing") by the Company’s Board of Directors and other
conditions precedents typical for this type of financing.
• The royalties in both agreements have an embedded sliding scale mechanism . The royalties will
be calculated on a quarterly basis and the sliding scale rate is dependent on the high-purity
manganese products prices achieved during the respective quarter. As the realised price increases
from a lower price forecast to a higher price forecast, the royalty rates decrease from the higher
royalty rate down to the lower royalty rate.
• All aspects of the Funding Package were structured to meet Project finance bankability
requirements. Both the Convertible Loan Facility and the Royalty Financing sit alongside, and
reduce, the project finance debt and equity required for the full Project financing.
• Closing is expected prior to month end and proceeds from the Funding Package will fund
development activities related to the advancement of the Project, including G&A expenses related
to the Project , which, as the only manganese resource in the European Union, is of strategic
importance to domestic electric vehicle battery supply chains and the energy transition.
• In connection with the Funding Package, Orion have an off-take option of between 20-22.5% of
the Project’s high -purity manganese total production for a term of 10 years from first delivery ,
matching the commercial terms of the Company’s sales.
Dr. Matthew James, President & CEO of Euro Manganese, commented:
“This is a transformative transaction for Euro Manganese, providing a Funding Package that facilitates the
best possible pathway to a final investment decision and representing a collaboration between Euro
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Manganese, Orion, and Stifel . Th e non-dilutive, tranche structure minimises cost of funds and reduc es
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.”
Stifel Nicolaus Europe Limited (“Stifel”) is acting as financial advisor to the Company and Norton Rose
Fulbright LLP is acting as legal counsel to the Company. 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.
About Euro Manganese
Euro Manganese is a battery materials company focused on becoming a leading producer of high-purity
manganese for the electric vehicle industry. The Company is advancing development of the Chvaletice
Manganese Project in the Czech Republic and exploring an early -stage opportunity to produce battery -
grade manganese products in Bécancour, Québec.
The Chvaletice Project is a unique waste -to-value recycling and remediation opportunity involving
reprocessing old tailings from a decommissioned mine . It is also the only sizable resource of manganese
in the European Union, strategically positioning the Company to provide battery supply chains with critical
raw materials to support the global shift to a circular, low-carbon economy.
Euro Manganese is dual listed on the TSXV and the ASX and is also traded on the OTCQX.
www.mn25.ca
About Orion Resource Partners Group
The Orion Resource Partners Group is an $8.2 billion global asset management firm that specializes in
institutional investment strategies in precious and energy transition metals and minerals. Headquartered
in NYC and with offices in Denver, London, and Sydney, The Orion Resource Partners Group includes a
team of 80 professionals with backgrounds in metals finance, physical metals logistics and sales, and in -
house technical professionals responsible for risk assessment and portfolio management.
www.orionrp.com
Authorized for release by the CEO of Euro Manganese Inc.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies
of the TSX Venture Exchange) or t he ASX accepts responsibility for the adequacy or accuracy of t his
release.
Inquiries
Dr. Matthew James Louise Burgess
President & CEO Senior Director, Investor Relations & Communications
[email protected] [email protected]
+1 (604) 312-7546
Company Address
#709 -700 West Pender Street
Vancouver, British Columbia, Canada, V6C 1G8
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Table 1 – Summary of Key Terms of US$100 million Orion Funding Package
Borrower / Grantor of
Royalties:
Mangan Chvaletice s.r.o. (wholly owned subsidiary of Euro Manganese Inc.)
Guarantors: Euro Manganese Inc.
Funding amount: US$100 million, split into two US$50 million components.
Structure: • US$50 million Convertible Loan Facility:
o US$20 million to be received on closing, expected by end of
November 2023.
o US$30 million to be received upon meeting key milestones.
• US$50 million Royalty Financing to be received following a final investment
decision.
Interest rate and tenor of
the Convertible Loan
Facility:
• 12% per annum, payable quarterly.
• Initial maturity date of 36 months; may be extended by Orion up to an
additional 36 months.
• Orion may convert the Convertible Loan Facility into a royalty at any time.
• The Company may convert the Convertible Loan Facility into a royalty upon a
successful completion test of the commercial plant.
Royalty: Royalty Rates:
• 1.29-1.65% of Project revenues following conversion of the Convertible Loan
Facility.
• 1.93-2.47% of Project revenues for the Royalty Financing.
• Royalty rates to be calculated on a quarterly basis dependent on high-purity
manganese prices achieved during the respective quarter.
Term:
• Life of project, estimated to be 25 years, based on current Proven + Probable
Reserves.
Security: Comprehensive security over assets and rights of the Chvaletice Manganese
Project.
Key Conditions Precedent
to drawdown:
• For the US$30 million tranche of the Convertible Loan Facility: completion of
offtake agreements for 40% of the Project’s high-purity manganese
production for the first five years of production and securing a strategic
investor.
• For the US$50 million Royalty Financing: completion of Front-End Engineering
Design, the Project being fully funded, and following a final investment
decision by the Company’s Board of Directors.
Orion offtake option: • Orion have off -take rights of between 20 -22.5% of the Project’s high -purity
manganese total production for a term of 10 years from first delivery.
• The off-take terms will match the commercial terms of the off -takes achieved
by the Company, thus ensuring they meet the bankability requirements of the
Project.
• Orion’s right is exercisable until the Company signs 60% of the total Project
offtake (on a tonnes of metal equivalent basis).
Covenants and events of
default:
Customary covenants and undertakings and events of default for a secured facility
of this nature, including, but not limited to, completion of key commercial
agreements, securing a strategic investor, and completion of various technical
milestones aligned with the Company’s progress to final investment decision.
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Forward-Looking Statements
Certain statements in this news release constitute “forward -looking statements” or “forward-looking information”
within the meaning of applicable securities laws. Such statements and information involve known and unknown
risks, uncertainties and other fact ors that may cause the actual results, performance, or achievements of the
Company, its Chvaletice Project, or industry results, to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements or information. Such statements can be
identified by the use of words such as “may”, “would”, “could”, “will”, “intend”, “expect”, “believe”, “plan”,
“anticipate”, “estimate”, “scheduled”, “forecast”, “predict” and other similar terminology, or st ate that certain
actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved.
Such forward-looking information or statements include, but are not limited to, statements regarding the Company’s
intentions regarding the development and advancement of the Chvaletice Project , the closing of the first tranche of
the Convertible Loan Facility and related US$20 million draw down, closing of the second tranche of the Convertible
Loan Facility and related US$30 million draw down, conversion of the loan into a royalty, the rates of the respective
royalties that may be granted, the Company's ability to meet the conditions precedent required to trigger funding
obligations or sale of the royalty, the Company’s ability to advance the Project if it receives some or all of the Funding
Package, the Company’s ability to satisfy the conditions precedent and make a final investment decision in order to
complete the sale of the US$50 million royalty and the Company's ability to meet Project finance bankability
requirements and secure additional project finance debt and equity required to fund the full development of the
Project.
Readers are cautioned not to place undue reliance on forward-looking information or statements. Forward-looking
statements are subject to a number of risks and uncertainties that may cause the actual results of the Company to
differ materially from those discussed in the forward-looking statements and, even if such actual results are realized
or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on,
the Company.
All forward-looking statements are made based on the Company's current beliefs including various assumptions
made by the Company and information currently available to the Company. Factors that could cause actual results
or events to differ materially from current expectations include, among other things: risks and uncertainties related
to the ability to obtain, amend, or maintain necessary licenses, or permits; risks related to acquisition of surface
rights; risks related to granting security; securing sufficient offtake agreements; the availability of acceptable
financing for developing and advancing the Chvaletice Project and for continued operations; the availability and
reliability of equipment, facilities, and suppliers necessary to complete development; the ability to develop adequate
processing capacity with expected production rates; timing to start of production and total costs of production; the
presence of and continuity of manganese at the Chvaletice Project at estimated grades; the potential for unknown
or unexpected events to cause contractual conditions to not be satisfied; developments in EV (Electric Vehicles)
battery markets and chemistries; and risks related to fluctuations in currency exchange rates, changes in laws or
regulations; and regulation by various governmental agencies . For a further discussion of risks relevant to the
Company, see "Risk Factors" in the Company's annual information form for the year ended September 30, 202 2,
available on the Company's SEDAR+ profile at www.sedarplus.ca.
Although the forward-looking statements contained in this news release are based upon what management of the
Company believes are reasonable assumptions, the Company cannot assure investors that actual results will be
consistent with these forward-looking statements. These forward-looking statements are made as of the date of this
news release and are expressly qualified in their entirety by this cautionary statement. Subject to applicable
securities laws, the Company does not assume any obligation to updat e or revise the forward -looking statements
contained herein to reflect events or circumstances occurring after the date of this news release.