Euro Manganese Strengthens Financial Position with Conditional Debt-To-Royalty Conversion on Chvaletice Manganese Project

Euro Manganese Inc. (EMN) has entered into a Third Amended and Restated Convertible Loan and Royalty Agreement with Orion OMRF (BK) LLC. Under the terms of the deal, the outstanding loan balance of US$23.5M, representing principal plus accrued interest as of March 31, 2026, will convert into a revenue-based royalty on the Chvaletice Manganese Project. This conversion is contingent upon satisfying a "Fundraise Condition" by a date acceptable to Orion.

The royalty rate is set between 2.29% and 2.46% of project revenues, calculated quarterly on a sliding scale tied to HPMSM prices. The royalty term aligns with the project life, which is estimated at 26 years. Additionally, Orion retains an off-take option for 20-22.5% of production for 10 years at commercial terms.

The undrawn US$70M tranche and the second loan tranche from May 2025 have been cancelled. Time-based milestones for drawdown and conversion have been removed, granting EMN flexibility to align development with permitting and market conditions. Orion's security is subordinated to future senior project finance debt.

Euro Manganese Inc. (EMN) has restructured a $23.5 million debt obligation into a long-term royalty, a move that removes immediate time-based pressure and simplifies the company’s capital structure. However, the conversion is explicitly conditional on a new fundraising round. Given the company's explicit going concern flag and a $29.2 million working capital deficit, this step is necessary but not sufficient to avoid dilution or default.

The market has already priced in the liquidity crunch, with the stock trading at 52-week lows. The news does not introduce a new capital raise or strategic investor. It serves as a positive administrative step that buys flexibility but does not solve the immediate cash burn.

Euro Manganese Inc. is a pre-revenue development company focused on the Chvaletice Manganese Project in the Czech Republic. The project involves reprocessing historic tailings to produce high-purity manganese products (HPMSM and HPEMM) for lithium-ion and sodium-ion batteries. It is positioned as Europe's only integrated high-purity manganese project, with strategic designation from the Czech government and the EU Critical Raw Materials Act. A secondary asset, the Bécancour Plant in Quebec, remains on hold pending financing.