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Nouveau Monde Graphite enters MOU for offtake deal with Panasonic, announces $50m financing

Eric Desaulniers and Hiroshi Kakiuchi officialize the partnership at a signing ceremony at NMG’s Phase 1 plant. Credit: Nouveau Monde Graphite Inc.

Nouveau Monde Graphite (NYSE: NMG; TSXV: NOU) has entered into a framework agreement with Mitsui & Co. and Panasonic Energy establishing the terms of a commercial relationship that enables the next development steps of NMG’s ore-to-battery-market integrated graphite project in Québec.

NMG will use the proceeds of this investment to support the finalization of the design, operation, marketing and corporate parameters of the Phase 2 commercial integrated operations, which comprise the Matawinie mine and Bécancour battery materials plant.

The goal is to proceed with project financing and the final investment decision (FID) on both the Matawinie mine and Bécancour facility once that optimization phase is completed and all operational variables are well understood. Based on information available Thursday, NMG anticipates a 28-month construction period following FID to bring its operations to commercial production.

Under the strategic partnership framework, there is non-binding memorandum of understanding on an offtake by Panasonic of a significant portion of NMG’s green active anode material out of the company’s integrated Phase 2 commercial production facilities over a multi-year term. Both NMG and Panasonic Energy intend to work together in the upcoming months to establish a definitive offtake agreement.

“I am delighted to embark on this transformative partnership with experienced and industry-leading partners Mitsui and Panasonic Energy. It is set to provide NMG with a solid commercial foundation for deploying our Phase 2 commercial operations,” Nouveau Monde CEO Eric Desaulniers said in a media statement.

We are very pleased to be participating in this strategic partnership with NMG, which will allow us to explore the possibility of establishing an environmentally friendly supply chain in North America through a completely new integrated anode production in Canada,” Panasonic Energy CEO Kazuo Tadanobu said.

Separately, NMG has entered into financing agreements with each of Mitsui, Pallinghurst and Investissement Québec that would see the company raise gross proceeds of $50 million through the issuance of unsecured convertible notes. Under the private placement, Mitsui will subscribe for $25 million in convertible notes, while Pallinghurst and Investissement Québec will each subscribe for $12.5 million.

“This investment reflects our commitment to establishing Québec as a leading North American hub for lithium-ion batteries. Nouveau Monde Graphite is clearly a key player in this sector and will contribute enormously to the province’s energy transition,” Guy Leblanc, CEO of Investissement Québec, said.

NMG is currently working towards developing a fully integrated source of carbon-neutral battery anode material in Québec.

Earlier this year, the company released a feasibility study on the Matawinie mine project and Bécancour battery material plant, outlining an integrated Phase 2 graphite operation with a combined after-tax net present value of C$1.58 billion and internal rate of return of 21%. The projects are located within a 150-km radius of Montreal.

Shares of NMG rose 5.0% on the TSX Venture Exchange as of 11:35 a.m. ET. The company has a market capitalization of C$403 million.