Sow Good Inc. to Acquire the Nachu Graphite Project from Ryzon Materials

Sow Good Inc. (Nasdaq: SOWG), a Texas-based freeze-dried consumer goods company, has entered into a definitive share purchase agreement to acquire 100% of the Tanzanian subsidiaries of Ryzon Materials Ltd that hold the Nachu Graphite Project. The transaction, to be satisfied entirely in Sow Good common shares, is framed as a repositioning of the business into a critical minerals and battery anode developer, with the existing consumer products operations continuing as a separate segment post-closing.

The proposed deal values Nachu at AUD$150 million (approximately US$107 million) Frank Poullas, representing Ryzon, confirmed that Ryzon’s shareholders will retain significant ongoing exposure to Nachu through their ownership in the combined company.

Deal Terms

Aggregate consideration is AUD$150 million, satisfied entirely in Sow Good common shares and subject to a deduction for Ryzon’s net debt at completion. Based on a 10-day VWAP of US$0.3209 for Sow Good stock and an RBA AUD/USD rate of 0.7149, approximately 334,150,145 new Sow Good shares are issuable, or 22,276,676 shares on a post-consolidation basis following Sow Good’s announced 15-to-1 reverse stock split.

AUD$15 million of the consideration (33,415,014 shares pre-split, or 2,227,667 post-split) will be held in escrow to support Sellers’ indemnification obligations, structured through 222,767 contingent value rights with releases tied to milestones at 12 and 18 months after closing. The full consideration is also subject to lock-up and dribble-out restrictions under a Stockholders Agreement to be entered into at closing.

Closing is subject to Sow Good stockholder approval under Nasdaq Listing Rule 5635, Tanzanian regulatory approvals (Fair Competition Commission, Mining Commission, and Minerals Audit Agency), no material adverse change between signing and closing, and customary closing deliverables including a registration rights agreement pursuant to which Sow Good will register the Consideration Shares for resale.

The Asset

Location and logistics

The Nachu Project sits in the Ruangwa District of southern Tanzania’s Lindi Region, approximately 20 km from the town of Ruangwa and 220 km by road from the deep-water port of Mtwara. The project is fully permitted, holds all principal mining and environmental permits, and has been granted a Special Economic Zone licence. Ryzon describes Nachu as the only graphite project in Tanzania to hold such a licence. Construction has not commenced.

Resource and reserve

The 2022 Bankable Feasibility Study Update, prepared by Ausenco Services Pty Ltd and other consultants under the JORC Code 2012, reports a global mineral resource of 174 Mt at 5.4% total graphitic carbon (TGC) and an ore reserve of 76 Mt at 5.2% TGC, supporting a 15.5-year mine life.

Flowsheet and product specification

The project is designed as a conventional open-pit operation processing 5 million tonnes per annum of run-of-mine ore through a crushing, grinding, and flotation circuit to produce approximately 236,000 tonnes per annum of graphite concentrate at 98.5% to 99.0% TGC purity. The flowsheet is designed to achieve that purity through flotation alone, without chemical purification: a point Ryzon has historically emphasised given the environmental footprint and cost profile associated with chemical purification routes used by many graphite developers.

From Uranex to Magnis to Ryzon

The Tanzanian entities being acquired are Uranex Tanzania Limited and Magnis Technologies Tanzania Limited. The project was first developed by Uranex NL, was subsequently owned and advanced by Magnis Energy Technologies Ltd (ASX: MNS), which was later renamed Magnis Resources Ltd, before being reorganised with the Tanzanian subsidiaries transferred to Ryzon Materials Ltd.

Sow Good’s release explicitly acknowledges that Magnis Energy Technologies received certain adverse media coverage during its ASX-listed tenure. Sow Good states that its decision to proceed is based on its evaluation of the underlying asset and the technical and commercial work completed to date, rather than the corporate history of prior holders. Frank Poullas, previously associated with Magnis, is quoted in the release representing Ryzon.

Offtake

Ryzon has disclosed that Nachu benefits from a binding offtake agreement with a U.S. Tier-1 EV and ESS manufacturer, although Sow Good has not independently verified the terms or current status of this arrangement and explicitly flags re-confirming or, if necessary, re-establishing the offtake as a post-closing priority. Management states that if the agreement remains in effect following closing, it would support cornerstone revenue visibility, positioning in the non-China battery anode supply chain, project financing discussions, and the pursuit of additional offtake agreements.