Euro Manganese boosts balance through closing first tranche of A$30 million private placement and from initial EIT InnoEnergy investment

Euro Manganese Inc (ASX:EMN) (CVE:EMN) (FRA:E06) has boosted its balance after closing the first tranche of its A$30 million (about C$29 million) private placement along with an initial investment from EIT InnoEnergy of €62,500 (about C$92,850), the first of three instalments with an aggregate value of €250,000. In a further lift, the eligibility timeline for around C$27 million in investment incentives in the form of tax credits granted by the Czech Republic’s Ministry of Industry and Trade has been extended to 2025, due to the coronavirus pandemic. The battery materials company with the advanced Chvaletice Manganese Project in the Czech Republic has also granted stock options to purchase 2.35 million shares at C$0.61 per share. Closing of first tranche The company closed the first tranche of the offering, which consisted of the sale and issuance of 41,666,666 CHESS Depositary Interests (CDIs), with each CDI representing one common share at a price of A$0.60 per CDI for gross proceeds of A$25 million (about C$24.2 million). The second tranche, consisting of 8,333,334 CDIs at the same issue price is expected to close in May 2021, subject to and following approval by shareholders.  Net proceeds of the A$30 million offering will be used to advance the Chvaletice project. Canaccord Genuity (Australia) Ltd is acting as lead manager and bookrunner to the offering, with Bacchus Capital Advisers Ltd acting as financial adviser. First EIT InnoEnergy investment In line with the terms of a project support agreement with EIT InnoEnergy, the company has received the first of three investments from EIT InnoEnergy which have a total value of €250,000. The funds will be used to support ongoing work on the project’s definitive feasibility study and the commissioning of the demonstration plant, which is intended to produce large-scale samples of high-purity manganese for supply chain qualification by prospective customers, including European electric vehicle makers and battery manufacturers. The first investment made by EIT of €62,500 was advanced to the company on March 24, 2021. Accordingly, the company will issue 147,380 shares to EIT at C$0.63 per share being the 10-day volume-weighted average stock price on the TSX Venture Exchange prior to receipt of the first investment. The issue of the shares is not expected to occur until early January 2022 and remains subject to the approval of the TSXV. In accordance with Canadian securities laws and policies of the TSXV, shares issued pursuant to EIT will be subject to a four-month and one day statutory hold period. Investment incentive eligibility extension The company’s eligibility timeline for certain investment incentives in the Czech Republic has been extended by two years. These credits are to be applied toward Czech corporate income taxes payable on future earnings generated by the project. Based on eligible Czech-based assets acquired of around CZK2.4 billion (about C$136 million), such tax credits would amount to around CZK470.3 million or C$27 million, over and above normal tax depreciation on such assets. Pursuant to amendments to the Czech Investment Incentives Act resulting from the COVID-19 pandemic, the Czech Government offered extensions to previously granted investment incentives. The company applied for and received approval to prolong the deadline for fulfilling the general conditions of the investment incentives by two years, to March 25, 2025. Stock option grants Euro Manganese has also granted stock options to certain officers, employees and consultants to purchase up to an aggregate of 2.35 million shares. These options are exercisable for a term of 10 years at an exercise price of C$0.61 per share. The options will vest one-third on the date of grant, and one-third on each of the first and second anniversaries of the date of grant, except for the options granted to officers, which vest in full five years from the date of grant, and 350,000 options granted to a consultant, which vest one-third on the date of grant and one-third on each of the four and eight-month anniversaries of the date of grant.