NMG Provides Quarterly Update as the Company Advances Phases 2 and 3 of Its Growth Plan and Files its Feasibility Study for the Matawinie Mine and Bécancour Battery Material Projects
Nouveau Monde Graphite (NMG) reports significant progress on its Phase-1 coating unit, with production expected by Q3-2022. A compliant feasibility study reveals a strong after-tax net present value of C$1,581 million for its Phase-2 projects. NMG is engaging tier-1 customers in the EV sector and secured strategic investment from Mason Graphite for the Lac Guéret property. They reported a cash position of $32.1M and zero OSHA incidents year-to-date. The company is focusing on sustainable, carbon-neutral practices, aiming to be a major player in North America's graphite supply chain.
- Commissioning of Phase-1 coating unit to start production by Q3-2022.
- Feasibility study shows an attractive after-tax NPV of C$1,581 million.
- Engaging tier-1 customers for potential offtake agreements.
- Strategic investment agreement signed with Mason Graphite for Lac Guéret development.
- Strong cash position of $32.1 million.
- Zero OSHA incidents year-to-date, highlighting operational safety.
- Delay in equipment delivery due to global logistics disturbances affecting project timeline.
- Potential inflationary pressures on capital costs and operational expenses.
+ Construction substantially finalized for the Company’s Phase-1 coating unit, with commissioning activities initiated; production is scheduled to start towards the end of Q3-2022.
+ Completion of a compliant feasibility study following NI 43-101 rules and guidelines for the Phase-2 Bécancour
+ Active engagement towards offtake agreement with potential tier-1 customers in the EV and battery sector with the production of samples, site visits, quality checks, commercial discussions, and environmental diligence reviews.
+ Signing and closing of a strategic investment agreement with Mason Graphite with a view towards the development and operation of Mason Graphite’s Lac Guéret property, an anchor asset for NMG’s Phase 3.
+ Meaningful progress on financing efforts for the development of NMG’s fully vertically integrated Phase-2 operations with strong interest shown towards senior debt from
+ Continued advancement of the
+ Publishing of a life cycle assessment for NMG’s portfolio of graphite-based materials, confirming the minimal and industry-leading environmental footprint of the Company’s production.
+ Safe conduct of operational and construction activities with a year-to-date
+ Period-end cash position of
Construction of the second shaping unit at NMG’s Phase-1 plant is underway. (Photo: Business Wire)
Arne H Frandsen, Chair of NMG, commented: “Even as capital markets experienced significant turbulences over the past months, the energy transition trends continue to materialize. Consumers rally behind cleantech. Manufacturers invest in new production capacity. Demand for graphite and battery materials grows to unprecedented levels. Governments reinforce their climate action regulations and incentives. NMG advances diligently its business model to provide battery and electric vehicles (“EV”) producers with a high-quality, scalable source of green advanced materials.”
Phase 1: Derisking Growth & Informing Technical Development
During Q2-2022, NMG completed its integrated value chain with the successful addition of a commercial-scale coating unit at its Phase-1 plant. The coating of spherical graphite is the last process step to complete the Company’s graphite-based product range for the EV and renewable energy sectors. Commissioning activities of the unit started at the end of the period with the objective of commencing production towards the end of Q3-2022 to support product qualification, operational optimization, and detailed engineering of the Phase-2 Bécancour Battery Material Plant.
At its Phase-1 purification facilities, NMG continued production and optimization to test the furnaces’ optimal capacity, refine process and operational parameters, inform parallel engineering for Phase 2, and generate battery-grade spherical purified graphite volumes.
The second shaping unit previously ordered to increase production capacity and provide customers with a greater variety of specifications was delivered at the Company’s facility in Q2-2022; construction has started with the objective to commence commissioning activities in Q4-2022. The delay for the equipment delivery caused by worldwide logistics disturbances has prolonged the project timeline, but NMG has taken advantage of the contractor base originally mobilized for the coating unit project to carry out the assembly of this new shaping module. Project costs remain within budgetary parameters at this stage.
Piloting of all Phase-1 concentration and processing modules is ongoing to produce large, customized samples per detailed specifications for potential clients to support the commercial qualification of NMG’s battery-grade advanced materials.
Phase 2: Delivering Attractive Economics through Disciplined Execution
Engineering firm
Table 1: Economic highlights of NMG’s integrated Phase-2 graphite operations.
ECONOMIC HIGHLIGHTS |
|
Bécancour Battery
|
INTEGRATED
|
|||
Pre-tax NPV ( |
|
|
|
|||
After-tax NPV (8 % discount rate) |
|
|
|
|||
Pre-tax IRR |
|
|
|
|||
After-tax IRR |
|
|
|
|||
Pre-tax payback |
3.2 years |
4.3 years |
3.9 years |
|||
After-tax payback |
3.7 years |
4.5 years |
4.2 years |
|||
Annual average production |
103,328 tonnes of
|
42,616 tonnes of anode material
|
- |
|||
Life of mine (“LOM”) |
25 years |
- |
- |
|||
Initial CAPEX |
|
|
|
|||
Annual OPEX |
|
|
|
The Company also provides notice that its Feasibility Study has been filed with the securities commissions or securities regulatory authorities in each of the provinces of
In recent months, NMG advanced financing efforts for the development of its integrated Phase-2 operations. The Company engaged with export credit agencies, governments, strategic investors, and potential customers to frame a robust capital structure that leverages international debt, government funding and equity. NMG received formal expressions of interest that could cover up to approximately
To advance the development of the
Construction of environmental protection infrastructure and preparatory work continued at the mining site to prepare the next phase of civil works, including proactive initiatives for the management of progressive reclamation (additional details under ESG Commitment in Action section). Electrification plans also advanced through collaborative work between Caterpillar and NMG’s technical teams. On-site testing of a prototype electric service mining vehicle, a conversion project carried out through an industrial partnership, is expected to generate a valuable source of data to optimize the Company’s electrification plan.
For the Bécancour Battery Material Plant, the Company focused on finalizing engineering and operational parameters for the Feasibility Study and preparing for upcoming construction at its 200,000 m2 land in the
Phase 3: Scaling Up Production
On
Through this partnership, NMG intends to leverage the expertise of its technical team, its Phase-1 facilities and its knowledge of the graphite-based advanced materials commercial landscape to assess the economic, technical and environmental possibilities of developing Mason Graphite’s Lac Guéret Property with a potential production of a minimum of 250,000 tpa of high-purity flake graphite.
Market Dynamics & Commercial Engagement
Engagement reaping from NMG’s marketing and commercialization program, combined with increased pressure on EV and battery manufacturers to secure their supply chains, have led to enhanced activities with potential tier-1 customers in H1-2022. NMG is actively working towards negotiating a long-term cornerstone offtake agreement for its anode material. Sustained interest from top-tier potential customers across continents is supported by quality checks, site visits to the Company’s Phase-1 operations, requests for information and environmental due diligence (see ESG Commitment in Action section for results of recent life cycle assessment of NMG’s products).
NMG has retained Société Générale as a strategic advisor in the negotiation with a potential off-taker and equity-stake investor, leveraging its global advisory expertise in the battery and energy transition sectors. Throughout the negotiation process, Société Générale will be called upon to provide a valuation view, assistance in the formulation of an optimal outcome across offtake 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.
Market conditions continue to be attractive for NMG. Pressure caused by gigafactories development across the world, limited production capacity impacted by Chinese pandemic measures and turbulent logistics is reflected in the year-over-year flake graphite price increase of
While expertise, technology and production capacity have historically been centred in
Concurrently to exponential demand, there is increased focus on carbon neutrality in the market to cater to consumers’ green expectations and governments’ more stringent environmental regulations. From the Global Battery Alliance’s effort to develop a Battery Passport to the European Commission’s proposed updated Battery Directive that would require labelling of batteries to disclose their carbon footprint, the market is shifting to encourage and eventually potentially require low-carbon products. The
ESG Commitment in Action
True to its Zero-Harm Philosophy, NMG completed the six-month period ended
As part of its responsible mining approach, NMG set forth two proactive environmental management initiatives in Q2-2022 to support progressive site reclamation. Firstly, hydroseeding of the site’s 8-km access road borders was carried out on a total surface of 4 hectares. The initiative will enable the testing of 24 native species in different mixes, soil conditions and ground relief. In addition to helping vegetate the site, control potential dust emissions and minimize erosion, the seeding will provide insight into the ideal parameters for future site restoration. Over the next three to five years, the zones seeded will be subject to regular monitoring and documentation.
Secondly, through a plantation of 8,000 willows on its Phase-1 mining site, NMG started the establishment of a circular environmental system. Willow’s phytoremediation capabilities will be leveraged to complement the Company’s integrated water management system by reducing the volume of treated water. The project will also allow for the capture and sequestration of carbon as well as the in-situ production of biomass, organic matter input for vegetation, to support the progressive restoration of the site.
NMG is committed to promoting responsible production across its value chain for responsibly extracted, environmentally transformed, and ethically sourced materials. The Company mandated a specialized consultant to carry out an independent cradle-to-gate life cycle assessment for its portfolio of graphite-based materials. Results confirmed the minimal and industry-leading environmental footprint of its planned production. NMG’s full commercial-scale Phase-2 all-electric facilities are forecasted to produce CSPG – anode material for lithium-ion batteries – with a Global Warming Potential GWP of 1.23 kg CO2 equivalent per kg, an impact up to 11 times smaller than that of benchmarked production.
Table 2: Climate change impact of CSPG production along different production routes
Extraction and
|
Advanced
|
GWP
|
|
GWP of NMG’s CSPG
|
|
|
14.1 |
|
1.23 |
|
|
6.1 |
|
|
|
|
3.1 |
|
|
Streamlined Life Cycle Assessment Study of Global Anode Grade Natural
|
|
LCA of Natural Graphite-Based
|
The Company is actively working to promote local and Indigenous recruitment opportunities to maximize benefits within its communities and strive to ensure representation of its milieu. In addition to the Diploma of Vocational Studies in Production Equipment Operation which has already trained six cohorts, the Mining and Logging Essentials socioprofessional integration program was launched in Q2-2022. This program, destined to members of the Atikamekw communities, aims to reinforce the employability of Indigenous workers.
On a foundation of accountability with a view to contributing to global environmental and sustainability goals, NMG published its 2021 ESG Report on
As at
About
NMG is striving to become a key contributor to the sustainable energy revolution. The Company is working towards developing a fully integrated source of carbon-neutral battery anode material in
Subscribe to our news feed: https://NMG.com/investors/#news
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 timeline of the initiatives described in this press release, the results of the feasibility study, development and operation of Mason Graphite’s Lac Guéret property, the Company’s CSPG expected GWP, future demand for batteries, minerals and advanced materials, the intended production of eco-friendly advanced materials, the Company’s commitments and initiatives outlined in the press release, the intended results of the initiatives described in this press release, the positive impact of the foregoing on project economics, the Company’s intended all-electric operations, industry trends, natural graphite’s advantage, international efforts to drive greater sustainability, transparency and circularity into the battery sector, the Company’s objective to be North America’s largest natural graphite production, the potential production of high-purity flake graphite of Mason Graphite’s Lac Guéret Property, the Company’s relationship with its stakeholders, market trends and those statements which are discussed under the “About Nouveau Monde Graphite” paragraph and elsewhere in the press release which essentially describe the Company’s outlook and objectives, constitute “forward-looking information” or “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of Canadian and
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
View source version on businesswire.com: https://www.businesswire.com/news/home/20220811005238/en/
MEDIA
VP Communications & ESG Strategy
+1-450-757-8905 #140
jpaquet@nmg.com
INVESTORS
Director, Investor Relations
+1-450-757-8905 #993
mjasmin@nmg.com
Source:
FAQ
What is Nouveau Monde Graphite's stock symbol?
What is the expected production start date for NMG's Phase-1 coating unit?
What is the after-tax NPV revealed in NMG's feasibility study?
Who signed a strategic investment agreement with NMG?