Nouveau Monde Graphite (TSXV: NOU) has closed financing transactions totalling C$20 million ($15.3m) with Pallinghurst to fund the next phase of the company’s Matawinie graphite project in Saint-Michel-des-Saints, Quebec.
The company issued a 3% net smelter royalty over the Matawinie property to Pallinghurst for an aggregate purchase price of approximately C$4.3 million. For a period of three years following issuance, the royalty is subject to a 1% buy-back right in favour of Nouveau Monde for approximately C$1.3 million, plus an amount equal to interest accrual at a rate of 9% per annum from and after the closing of the royalty transaction up to the buyback date.
NMG’s Feasibility Study revealed projected graphite concentrate production of 100,000 tonnes per year, with an average concentrate purity of 97%, over a 26-year period. Currently, Nouveau Monde operates a demonstration plant where it produces concentrated flake graphite, which is being sent to potential North American and international clients for the qualification of its products.
“The covid headwinds have not halted the exponential growth in lithium-ion battery demand and we are in an ideal position to cater to the markets with our low carbon-footprint graphite materials,” Nouveau Monde CEO Eric Desaulniers said in a media release.
“Through this investment, we have reinforced our commitment to Nouveau Monde and more broadly to Québec, as a world-class destination for battery materials,” said Arne H. Frandsen, co-founder of Pallinghurst.
“Pallinghurst looks forward to being a catalyst for the development of Nouveau Monde, as a cornerstone for Québec’s broader battery hub strategy.”
Pallinghurst currently owns 52,350,000 common shares of NMG, representing 19.99% of the issued and outstanding common shares.
Nouveau Monde said it is targeting commercial production in 2022.