Evolution Energy Minerals announced the execution of a binding term sheet with YXGC with regards to the downstream processing of coarse flake concentrate from the Company's Chilalo Graphite Project ("Chilalo"), which is located in south-east Tanzania. The Term Sheet, the details of which are in Appendix 1, envisages, subject to positive results and approvals, the establishment of a processing facility for the processing of 25,000tpa of coarse flake concentrate into high-value graphite products including graphite foil, bi-polar plates and seals for electric vehicles. The Company has undertaken a preliminary review of suitable locations, with a focus on Europe and the Middle East.

In May 2022, the Company signed a binding offtake agreement with YXGC to supply 30,000 tonnes per annum of flake graphite concentrate (from +100 mesh up to +32 mesh) for a period of three years from first production at Chilalo. However, in addition to this important offtake relationship, both parties are seeking to establish downstream manufacturing outside China which allows Evolution to capture greater margins in the value chain and provides YXGC with an opportunity for international expansion using their cutting-edge technologies. This Term Sheet is a critical step in positioning Evolution as a downstream manufacturer of graphite foil and bi-polar plates.

Partnering with YXGC, a global leader in the manufacture of expandable graphite and graphite foil, places Evolution in a strong position to capitalise on the opportunity to realise the material value uplift from accessing these markets. Evolution's Vertically Integrated Strategy: Evolution's strategy is to become a vertically integrated producer of high-value graphite products and entering into this Term Sheet is central to that strategy as it positions Evolution as a downstream manufacturer of graphite foil, bi-polar plates and graphite seals. Chilalo will produce flake graphite concentrate across a range of sizes, to be further processed into end products depending on the flake size: Battery materials, including lithium-ion and alkaline batteries using Chilalo fine flake graphite; and Graphite foil and bi-polar plates for application in hydrogen fuel cells using Chilalo coarse flake graphite.

The demand for graphite foil and bi-polar plates is increasing and supply of these products is constrained principally by the lack of availability of quality coarse flake graphite feedstock. In response to rising international demand, YXGC recently expanded its plant, increasing capacity by 25%. Key Terms: The Term Sheet provides for three key phases: A scoping phase that comprises: A Market Study to identify the nature and scale of the opportunity and to confirm the market size and indicative graphite product pricing; Completion of a Scoping Study to +/- 30% accuracy that will contain indicative financial metrics, proposed plant size and required land; Selection of a suitable site; ("Scoping Phase") Subject to the results of the Scoping Phase, a decision to undertake a definitive feasibility study ("DFS"); Subject to the results of the DFS, a decision to construct a downstream processing plant.

YXGC earns its 40% interest in the JV through the provision of technology and marketing expertise. The value of this contribution is to be agreed between the parties during the Scoping Phase. Evolution earns its interest through sole funding JV activities until it has funded an amount equal to 150% of the agreed value of YXGC's technical and marketing expertise.

The Scoping Phase will be managed in parallel with the Company's current priority, which is the financing and implementation of the Chilalo mine development. Evolution is targeting a Final Investment Decision for Chilalo in early 2023.