Chapter 16: Evelution Energy’s Secured Contracts and U.S. Tax Credit Drive Strong Margins
In Chapter 16 of our ongoing interview series, Michael Gibson of USAdvisors.org speaks with Gil Michel-Garcia, Executive Vice President, General Counsel, Treasurer & Secretary of Evelution Energy.
Gil shares how Evelution has already signed input contracts for cobalt hydroxide while aligning both input and output pricing to the same global metal index. This strategy ensures defensible margins regardless of commodity price volatility.
He also highlights the U.S. government’s Critical Minerals Production Tax Credit, which adds an additional 10% annual cost savings. Combined, these measures boost EBITDA margins from an industry-standard 10–15% to an impressive 20–25%.
“That’s huge for a processing facility. And again, hence why this project is economically viable. It’s a home run type of project.” — Gil Michel-Garcia
This chapter underscores why Evelution Energy’s Yuma cobalt processing facility is poised for long-term profitability and represents a unique opportunity for EB-5 investors.
Evelution Energy Interview Chapter 156
Michael Gibson, USAdvisors, interviews Gil Michel-Garcia, EVP & General Counsel of EVelution Energy,
Transcript
Evelution Energy Interview Chapter 16 Transcript
Michael Gibson, Managing Director of US Advisors (USAdvisors.org) an independent Registered Investment Advisory Firm. Michael also owns and runs EB-5 Investments (eb5projects.com) and is an EB5 industry expert.
Navaid Alam, President & Chief Executive Officer
Gil Michel-Garcia, Executive Vice President, General Counsel, Treasurer & Secretary
Michael Gibson, speaking
And, and, and you refer to that as your outtake, your offtake.
Navaid Alam, speaking
Offtake.
Michael Gibson, speaking
Your offtake. So everything that you produce is your offtake. And then to hedge your import that, the hydroxide from Africa. That is also your, your negotiating contracts for that, so that you can have your, your inputs fixed. And then your output also fixed. So you have, you, you should be able to maintain that, that level of margin.
Gil Michel-Garcia, speaking
Those import contracts are already signed. So the import stuff is already negotiated and signed. We are buying, because we have commodity experience, we're buying the hydroxide priced off of the metal index. And then we're selling the sulfate and the metal priced off the metal index. So we're buying on, off of the same index that we're selling. And that allows us to be able to structure, not exact margins, but very defensible margins, irrespective of what the price does. It doesn't matter what the price does, we will have a band that will be able to...
Michael Gibson, speaking
And just, and you would say, you both, gentlemen have experience in other industries. You say that, that's a healthy margin?
Gil Michel-Garcia, speaking
Well, yeah. I mean they, they, they, just to give you kind of an indication, a general the, one of, some of the best processing facilities in the world would normally have 10 to 15% EBITDA margins. We're gonna benefit from that, being a top of the line class facility. On top of it there is a production tax credit, it's called the Critical Minerals Production Tax Credit. Which is being offered by the, by the, by the US government, for production of critical minerals specifically.
Michael Gibson, speaking
Perfect, yeah.
Gil Michel-Garcia, speaking
Right, which gives us back about 10% of our cost of goods on an annual basis. That jumps our EBITDA margin from a 10% to 15% EBITDA margin. To about a 20% to 25% EBITDA margin.
Michael Gibson, speaking
Yeah, that's...
Gil Michel-Garcia, speaking
That's huge for processing facility. And again, hence why the, this economic, this project is economically viable. Hence, why we're offering so much to investors to participate. Because it is a really it's a home run type of project.
Michael Gibson, speaking
You've already got that kind of baked in once, once the plan is operational. It's alright, you've already got the, the product being sold. And you've got the, the contracts for purchasing the input. So...