NMG Provides Project Finance Update: Expressions of Interest Received and Appointment of Société Générale as the sole coordinating Mandated Lead Arranger
Nouveau Monde Graphite (NYSE: NMG) has made significant strides in financing its fully integrated Phase-2 operations, including the Bécancour Battery Material Plant and Matawinie Mine. The company has received expressions of interest for senior debt covering up to 70% of the required funding from Export Credit Agencies and governmental bodies, with Société Générale appointed as the lead arranger. Furthermore, NMG is engaged in commercial negotiations with major battery manufacturers to secure anchor customer agreements, aligning with rising demand in the electric vehicle sector.
- Expressions of interest for senior debt cover up to 70% of the required funding.
- Appointment of Société Générale as the lead arranger provides credibility and expertise.
- Advancement in commercial discussions with battery manufacturers indicates strong market demand.
- None.
+ Strong interest shown towards senior debt from Western World ECAs and governmental bodies, which is estimated to cover up to approximately
+ NMG appoints Société Générale as the sole mandated lead arranger for the ECA facilities; Société Générale will oversee the due diligence process, support efforts to obtain final credit approval and assist NMG in offtake negotiations
+ Amid increasing demand from battery and EV manufacturers, NMG advances commercial discussions and technical product qualification with a view towards securing an anchor customer agreement with a potential financial participation
+ NMG is developing a robust financing structure to fund its integrated Phase 2, the Bécancour Battery Material Plant and the
+ ECA and governmental intended backing denotes NMG’s attractive and timely business model, underpinned by strong ESG principles and proprietary technologies
Arne H Frandsen, Chair of NMG, said: “The strong expressions of interest received through our financing efforts thus far illustrates the technical, commercial, and sustainable attractiveness of NMG’s ore-to-battery-material business. As the
Senior Debt Facility
As NMG’s technical team and engineering consultants finalize the selection of key equipment and service providers for Phase 2, discussions with ECAs have advanced considerably and have led to a significant level of interest by certain ECAs. The Company has received indicative expressions of interest for a senior debt facility from
The proposed medium-term project finance is expected to deliver a significantly lower cost of capital than traditional financing structures. As both ECAs and the capital markets increasingly turn their attention to support impact investment, the funding would also reflect NMG’s significant environmental, social and governance (“ESG”) benefits to key stakeholders, including the local community, as well as contribute to the global clean energy drive towards zero emissions. The lower interest rates and longer repayment terms associated with ECA financing minimizes the financial risks with this level of funding.
The EOIs have indicated funding of up to approximately
The EOIs provide an indication of the attractiveness of the project, and cover, in principle, the level of financial support and their flexibility and desired conditions. The EOIs are not binding commitments and are subject as is customary to a series of standard project finance terms and satisfactory due diligence.
To further advance the development of this facility, NMG has appointed Société Générale as the sole coordinating mandated lead arranger (“MLA”). The appointment of Société Générale was undertaken after a
The following stages in the Company’s financing efforts will include, among other things, setting up due diligence workstreams, completion of the definitive feasibility study, securing a formal credit approval and providing lenders with its National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”)-compliant feasibility study. Targeted to be delivered before the end of Q2-2022, the study will reflect NMG’s integrated business model for the Phase-2 Bécancour
The ECA backing that the Company is striving to secure demonstrates a sound vote of confidence in the responsible, carbon-neutral and sustainable development of what is projected to be North America’s largest fully integrated natural graphite operation.
Commercial Engagement
In parallel to its financing efforts, NMG continues to advance commercial discussions with tier-1 battery manufacturers thanks to the production of its Phase-1 facilities that enables technical product qualification and confirmation of specifications and quality standards. The Company is striving to secure an anchor customer offtake agreement that could potentially be coupled with a cornerstone strategic investor's participation in the financing structure. This agreement could prove beneficial in advancing the financing efforts to the next stage.
Leveraging its global advisory expertise in the battery and energy transition sectors, Société Générale will also assist NMG as a strategic advisor in the negotiation with a potential off-taker and equity-stake investor. Throughout the negotiation process, Société Générale will be called upon to provide a valuation view, assistance in the formulation of an optimal outcome across off-take conditions, valuation of the equity and timeline to enable the project finance debt, and support in structuring and finalizing the terms and conditions of the equity investment.
Governmental Levers
Based on discussions to date, NMG anticipates meaningful government support in the form of debt, equity and/or grants as both the
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Cautionary Note Regarding Forward-Looking Information
All statements, other than statements of historical fact, contained in this press release including, but not limited to those describing the potential project financing and the terms and conditions thereof, the involvement of ECAs, the
Forward-looking statements are subject to known or unknown risks and uncertainties that may cause actual results to differ materially from those anticipated or implied in the forward-looking statements. Risk factors that could cause actual results or events to differ materially from current expectations include, among others, delays in the scheduled delivery times of the equipment, the ability of the Company to successfully implement its strategic initiatives and whether such strategic initiatives will yield the expected benefits, the availability of financing or financing on favorable terms for the Company, the dependence on commodity prices, the impact of inflation on costs, the risks of obtaining the necessary permits, the operating performance of the Company’s assets and businesses, competitive factors in the graphite mining and production industry, changes in laws and regulations affecting the Company’s businesses, political and social acceptability risk, environmental regulation risk, currency and exchange rate risk, technological developments, the impacts of the global COVID-19 pandemic and the governments’ responses thereto, and general economic conditions, as well as earnings, capital expenditure, cash flow and capital structure risks and general business risks. A further description of risks and uncertainties can be found in NMG’s Annual Information Form dated
Many of these uncertainties and contingencies can directly or indirectly affect, and could cause, actual results to differ materially from those expressed or implied in any forward-looking statements. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are provided for the purpose of providing information about management’s expectations and plans relating to the future. The Company disclaims any intention or obligation to update or revise any forward-looking statements or to explain any material difference between subsequent actual events and such forward-looking statements, except to the extent required by applicable law.
The market and industry data contained in this press release is based upon information from independent industry publications, market research, analyst reports and surveys and other publicly available sources. Although the Corporation believes these sources to be generally reliable, market and industry data is subject to interpretation and cannot be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data-gathering process and other limitations and uncertainties inherent in any survey. The Corporation has not independently verified any of the data from third-party sources referred to in this press release and accordingly, the accuracy and completeness of such data is not guaranteed.
Neither the
Further information regarding the Company is available in the SEDAR database (www.sedar.com), and for
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VP Communications & ESG Strategy
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FAQ
What funding support is Nouveau Monde Graphite seeking for its Phase-2 operations?
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