- Panasonic Energy and GM (together, the “Anchor Customers”)
concurrently commit to multiyear offtake agreements for NMG’s
active anode material, covering approximately 85% of NMG’s planned
Phase-2 fully integrated production, from ore to battery
materials.
- Offtake agreements are complemented by an aggregate US$50
million Tranche 1 Investment from Panasonic and GM to advance the
development of NMG’s Phase-2 Matawinie Mine and Bécancour Battery
Material Plant as per their respective specifications.
- Strategic partner Mitsui and long-time investor Pallinghurst
inject a total of US$37.5 million into NMG’s development, the
aggregate proceeds of which will be used to repurchase their
previously announced convertible notes.
- Offtake agreements and investments support NMG’s execution plan
for its Phase-2 Matawinie Mine and Bécancour Battery Material Plan,
marking a significant milestone toward future funding by Anchor
Customers of up to US$275 million, subject to certain conditions
and a maximum ownership threshold agreed between the relevant
parties.
- Shareholders, analysts, and media are invited to attend an
Investor Briefing today at 10:30 a.m. ET hosted by NMG’s Management
Team via webcast.
On the back of agreed-upon offtake agreements with Panasonic
Energy Co., Ltd. (“Panasonic Energy”), a wholly owned subsidiary of
Panasonic Holdings Corporation (“Panasonic”) (TYO: 6752), and
General Motors Holdings LLC, a wholly owned subsidiary of General
Motors Co. (collectively, “GM”) (NYSE: GM), Nouveau Monde Graphite
Inc. (“NMG“ or the “Company”) (NYSE: NMG, TSX.V: NOU) has rallied
Mitsui & Co., Ltd (“Mitsui”) (TYO: 8031) and Pallinghurst Bond
Limited (“Pallinghurst”) for an aggregate combined investment of
US$87.5 million to advance its development toward commercial
operations. Projected to become the first fully integrated natural
graphite active anode material production of its kind in North
America, NMG is set to provide a carbon-neutral, reliable,
sizeable, and ESG-driven source of Canadian natural graphite for
the local electric vehicle (“EV”) and lithium-ion battery
market.
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the full release here:
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Map of NMG’s integrated extraction and
advanced manufacturing routes to supply Panasonic Energy and
GM.
Arne H Frandsen, Chair of NMG, declared: “Today, influential
actors in strategic minerals, modern commodities, batteries, and
EVs are coming together to drive the establishment of a Canadian
source of graphite to support energy autonomy, national security,
and global decarbonization. I am confident that such commercial and
investment levers will constitute the bedrock on which NMG can
build its Phase 2 operations and more. Congrats to colleagues at
Panasonic Energy, GM, Mitsui and Pallinghurst for this multifaceted
transaction; together we will support the world’s transitions
towards a cleaner future.”
Eric Desaulniers, Founder, President, and CEO of NMG, reacted:
“In our journey to position NMG as the North American leader of
responsible mining and advanced manufacturing, we had been looking
for top-tier EV and battery manufacturers to bolster our commercial
vision. Thanks to visionary customers and investors, we are now
moving toward establishing a fully local and traceable value chain.
From the Matawinie ore, to the Bécancour active anode material, to
our clients’ U.S. battery factories, we are pioneering a resilient
supply chain for the EV market.”
A Solid Commercial Backing
The multiyear offtake agreements cover the supply of a committed
combined annual volume of 36,000 tonnes of active anode material by
NMG to the Anchor Customers, representing approximately 85% of the
Company’s Phase-2 production. With agreed upon pricing formula
linked to future prevailing market prices and project financing
ratio requirements, NMG can now demonstrate strong long-term
bankability underpinnings to lenders, investors, and
shareholders.
In parallel, the Company maintains intensive commercial
discussions and continued product qualification with other tier-1
battery manufacturers for the balance of its Phase-2 production.
Current market dynamics in North America, reflecting recent Chinese
graphite exportation limitations and stringent U.S. sourcing
requirements for battery materials, favorably position NMG’s local
production. The Company’s recent acquisition of the Uatnan Mining
Project for its Phase-3 expansion also provide an attractive supply
opportunity for Western EV and battery manufacturers looking to
secure and grow active anode material volumes as their production
increases.
Strategic Participation into NMG’s Business Plan
The Anchor Customers, directly or through an affiliate, have
each agreed to make an initial US$25 million equity investment in
NMG subject to certain conditions (the “Tranche 1 Investment”), for
a total of US$50 million, to support the advancement of NMG’s
Phase-2 operations – the Matawinie Mine and the Bécancour Battery
Material Plant – aligned with their respective battery
specifications.
In line with the previously announced framework agreement
between NMG, Panasonic Energy and Mitsui, the Company’s strategic
partner Mitsui supports the attainment of this milestone and
further development efforts towards a final investment decision
(“FID”) by investing US$25 million, subject to regulatory approvals
and the requirements of MI 61-101 (as defined below), pursuant to
which Mitsui has agreed to subscribe for 12,500,000 Common Shares
in the capital of NMG (the “Common Shares”) and 12,500,000 warrants
on the same pricing and other terms as the Tranche 1 Investment,
such proceeds to be used to repurchase Mitsui’s convertible note
dated November 8, 2022, as amended and restated (the “Mitsui
Convertible Note”). NMG will also enter into an investor rights
agreement (the “Investor Rights Agreement”) and registration rights
agreement with Mitsui at the closing of their investment. Pursuant
to the Investor Rights Agreement, Mitsui will be required to
“lock-up” its securities for a period of 12 months from the date of
their investment. The Investor Rights Agreement also provides
Mitsui with certain rights relating to its investment in NMG,
namely certain board nomination and anti-dilution rights. Mitsui
will be subject to a standstill limitation whereby it will not be
able to increase its holdings beyond 20% of the issued and
outstanding NMG Common Shares for a period of three years.
Long-time strategic investor Pallinghurst has also agreed to
participate via a US$12.5-million investment, also subject to
regulatory approvals and the requirements of MI 61-101, pursuant to
which Pallinghurst has agreed to subscribe to 6,250,000 Common
Shares and 6,250,000 warrants on the same pricing and other terms
as the Tranche 1 Investment, such proceeds to be used to repurchase
Pallinghurst’s convertible note dated November 8, 2022, as amended
and restated (the “Pallinghurst Convertible Note” and together with
the Mitsui Convertible Note, the “Notes”). NMG will also enter into
a registration rights agreement with Pallinghurst at the closing of
their investment.
Such warrants are generally exercisable in connection with the
Tranche 2 Investment at FID in accordance with their terms. Each
warrant will entitle the holder thereof to acquire one Common Share
(a “Warrant Share”) at a price per Warrant Share equal to the lower
of (i) the amount in US$2.38 per Common Share and (ii) the amount
in US Dollars per Common Share equal to the closing price of the
Common Shares on the trading day immediately following the date on
which the investments described above are announced. The exercise
of the warrants is subject to certain ownership limitations.
Upon a positive FID, the parties’ commercial relationship is
also intended to expand through further investments into NMG as
part of the construction financing. The Anchor Customers, directly
or through an affiliate, together with potential co-investors,
intend to participate in future funding of a total amount valued at
approximately US$275 million, subject to certain conditions and a
maximum ownership threshold agreed between the relevant parties.
Assisted by its financial advisors, the Company continues to
advance financing efforts, including with its other convertible
noteholder, and is engaged with export credit agencies,
governments, and strategic investors, in addition to customers to
frame a robust capital structure that leverages international debt,
government funding and equity. BMO Capital Markets is acting as
financial advisor to the Company in connection of certain of the
transactions described herein.
Related Party Disclosure
Currently, Mitsui may have beneficial ownership of, or control
or direction over, directly or indirectly, the Mitsui Convertible
Note that can be converted into units comprising an aggregate of
5,000,000 Common Shares and 5,000,000 Common Share purchase
warrants (the “Mitsui Warrants”), as well as 1,052,695 Common
Shares issuable in connection with accrued interest under the
Mitsui Convertible Note, which in the aggregate represent
approximately 14.14% of the issued and outstanding Common Shares on
a diluted basis (assuming conversion of the Mitsui Convertible Note
and exercise of the Mitsui Warrants). In connection with the Mitsui
investment described above, Mitsui is expected to acquire
12,500,000 Common Shares and 12,500,000 Common Share purchase
warrants (the “Mitsui Tranche 1 Warrants”). Following the
completion of the investments by GM, Panasonic, Mitsui, and
Pallinghurst and the repayment of the Mitsui Convertible Note,
Mitsui is expected to have beneficial ownership of, or control or
direction over, directly or indirectly, an aggregate of 13,552,695
Common Shares and 12,500,000 Mitsui Tranche 1 Warrants, which in
the aggregate will represent approximately 20.85% of the issued and
outstanding Common Shares on a partially diluted basis (assuming
exercise of the Mitsui Tranche 1 Warrants).
Currently, Pallinghurst may have beneficial ownership of, or
control or direction over, directly or indirectly, 11,541,013
Common Shares and the Pallinghurst Convertible Note that can be
converted into units comprising an aggregate of 2,500,000 Common
Shares and 2,500,000 Common Share purchase warrants (the
“Pallinghurst Warrants”), as well as 526,348 Common Shares issuable
in connection with accrued interest under the Pallinghurst
Convertible Note, which in the aggregate represent approximately
23.50% of the issued and outstanding Common Shares on a diluted
basis (assuming conversion of the Pallinghurst Convertible Note and
exercise of the Pallinghurst Warrants). In connection with the
Pallinghurst investment described above, Pallinghurst is expected
to acquire 6,250,000 Common Shares and 6,250,000 Common Share
purchase warrants (the “Pallinghurst Tranche 1 Warrants”).
Following the completion of the investments by GM, Panasonic,
Mitsui, and Pallinghurst and the repayment of the Pallinghurst
Convertible Note, Pallinghurst is expected to have beneficial
ownership of, or control or direction over, directly or indirectly,
an aggregate of 18,317,361 Common Shares and 6,250,000 Pallinghurst
Tranche 1 Warrants, which in the aggregate will represent
approximately 20.70% of the issued and outstanding Common Shares on
a partially diluted basis (assuming exercise of the Pallinghurst
Tranche 1 Warrants).
Mitsui and Pallinghurst are “interested parties” in respect of
the transactions described herein, and their investment as well as
the repayment of the Notes each constitutes a “related party
transaction” (collectively, the “Related Party Transactions”)
within the meaning of Regulation 61-101 respecting Protection of
Minority Security Holders in Special Transactions (“MI 61-101”) and
the TSX Venture Exchange Policy 5.9 - Protection of Minority
Security Holders in Special Transactions.
The independent directors of the Company, determined in
accordance with MI 61-101, are responsible for (i) evaluating the
applicability of MI 61-101 to the Related Party Transactions; (ii)
considering whether any exemptions from any formal valuation and/or
minority approval requirements of MI 61-101 determined to be
applicable would be available to NMG in connection with the Related
Party Transactions or whether to seek regulatory exemptive relief
in respect thereof; and (iii) if required or advisable, determining
and confirming whether a formal valuation pursuant to MI 61-101 is
required in connection with the Related Party Transactions and, if
required or advisable, determining the terms of such valuator’s
engagement (including the fees to be paid to such valuator) and
supervising the preparation of such valuation.
The Related Party Transactions are conditional on compliance
with the requirements of MI 61-101 or NMG receiving exemptive
relief from the requirements of MI 61-101. A material change report
in respect of the Related Party Transactions will be filed by
NMG.
Settlement of Accrued Interests
Upon the approval of the TSX Venture Exchange and the New York
Stock Exchange (the “Exchanges”), the accrued interest owed to
Pallinghurst and Mitsui (together, the “Holders”) under the Notes
for the period from January 1, 2024, until the date of their
respective subscription agreements, will satisfy as follows.
232,191 Common Shares at a price of US$2.07, representing an
aggregate amount of US$480,637, will be issued and share
certificates will be delivered to the Holders upon the repurchase
of the Notes. The issuance of Common Shares is subject to the
approval of the Exchanges and, when issued, will be subject to a
hold period of four (4) months and one day. Upon repurchase of the
Notes, previously announced reserved but unissued Common Shares in
respect of accrued interest will be issued and delivered to the
Holders.
Complementary Information
Shareholders and analysts are invited to attend a webcast
Investor Briefing this morning, Thursday, February 15, 2024, at
10:30 a.m. ET. Hosted by President and CEO Eric Desaulniers with
the participation of NMG’s Management Team, the briefing will
entail a technical presentation followed by a question-and-answer
session. Registration should be completed prior to the start of the
briefing at:
https://us06web.zoom.us/webinar/register/WN_VmhZvajOQJ2yICWrk9ySzQ.
Members of the media may download high-resolution files of the
brief interview with Eric Desaulniers on this announcement at
https://we.tl/t-t9Nwt9RiQR and make additional interview or
information requests to Julie Paquet, Vice President,
Communications & ESG Strategy at NMG.
Completion of the transactions described herein remains subject
to customary regulatory approvals, including approval of the TSX
Venture Exchange and NYSE, and other customary closing conditions.
Copies of the referenced subscription, offtake, investor rights and
registration rights agreements will be available on the Company’s
page on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov, and
the summary of the such agreements contained herein is qualified in
its entirety by the reference to such documents.
About Nouveau Monde Graphite
Nouveau Monde Graphite 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 Québec, Canada, for the growing
lithium-ion and fuel cell markets. With enviable ESG standards, NMG
aspires to become a strategic supplier to the world’s leading
battery and automobile manufacturers, providing high-performing and
reliable advanced materials while promoting sustainability and
supply chain traceability. www.NMG.com
About Panasonic Energy
Panasonic Energy established in April 2022 as part of the
Panasonic Group's switch to an operating company system, provides
innovative battery technology-based products and solutions
globally. Through its automotive lithium-ion batteries, storage
battery systems and dry batteries, the company brings safe,
reliable, and convenient power to a broad range of business areas,
from mobility and social infrastructure to medical and consumer
products. Panasonic Energy is committed to contributing to a
society that realizes happiness and environmental sustainability,
and through its business activities the company aims to address
societal issues while taking the lead on environmental initiatives.
For more details, please visit www.Panasonic.com/global/energy
About GM
General Motors (NYSE:GM) is a global company focused on
advancing an all-electric future that is inclusive and accessible
to all. At the heart of this strategy is the Ultium battery
platform, which will power everything from mass-market to
high-performance vehicles. General Motors, its subsidiaries and its
joint venture entities sell vehicles under the Chevrolet, Buick,
GMC, Cadillac, Baojun and Wuling brands. More information on the
company and its subsidiaries, including OnStar, a global leader in
vehicle safety and security services, can be found at
www.gm.com.
About Mitsui
Mitsui & Co., Ltd. (TYO: 8031.JP) is a global trading and investment company
with a diversified business portfolio that spans approximately 63
countries in Asia, Europe, North, Central & South America, The
Middle East, Africa and Oceania.
Mitsui has about 5,500 employees and deploys talent around the
globe to identify, develop, and grow businesses in collaboration
with a global network of trusted partners. Mitsui has built a
strong and diverse core business portfolio covering the Mineral and
Metal Resources, Energy, Machinery and Infrastructure, and
Chemicals industries.
Leveraging its strengths, Mitsui has further diversified beyond
its core profit pillars to create multifaceted value in new areas,
including innovative Energy Solutions, Healthcare & Nutrition
and through a strategic focus on high-growth Asian markets. This
strategy aims to derive growth opportunities by harnessing some of
the world’s main mega-trends: sustainability, health &
wellness, digitalization and the growing power of the consumer.
Mitsui has a long heritage in Asia, where it has established a
diverse and strategic portfolio of businesses and partners that
gives it a strong differentiating edge, provides exceptional access
for all global partners to the world’s fastest growing region and
strengthens its international portfolio.
For more information on Mitsui & Co’s businesses visit,
www.Mitsui.com
About Pallinghurst
For almost 20 years, The Pallinghurst Group has been a
world-leading investor in the metals and natural resources sector
with a key focus on battery materials – facilitating the vital,
global shift towards sustainable energy storage.
www.pallinghurst.com
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Cautionary Note
All statements, other than statements of historical fact,
contained in this press release including, but not limited to those
describing the closing transactions described in this press
release, closing of the Tranche 1 Investment, the anticipated
benefits of the transactions described herein, the satisfaction of
the conditions to closing the transactions and the timing thereof,
receipt of any regulatory approvals in respect of the transactions
described herein, receipt of exemptive relief in respect of the
requirements of MI 61-101, use of proceeds from the private
placement, the impact of the transactions on a related party’s
ownership amount, a positive final investment decision and closing
of project financing, closing of the potential total equity
investments of US$350 million from GM, Panasonic and its
co-investors, the Company’s projection of becoming North America’s
largest fully integrated active anode material producer, the
Company’s relationship with its stakeholders, including First
Nations and communities, the positive impact of the foregoing on
project economics and shareholder value, the realization of the
condition precedents of the supply agreements and their entry into
force, the Company’s planned all-electric operations, fulfillment
of the closing conditions and completion of the transactions
described in this press release, the intended production of
eco-friendly advanced materials, trends in legislation, consumer
preferences, industry standards, markets and technology, the
intended results of the initiatives described in this press
release, and those statements which are discussed under the “About
Nouveau Monde” 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 United States securities laws, and are
based on expectations, estimates and projections as of the time of
this press release. Forward-looking statements are necessarily
based upon a number of estimates and assumptions that, while
considered reasonable by the Company as of the time of such
statements, are inherently subject to significant business,
economic and competitive uncertainties and contingencies. These
estimates and assumptions may prove to be incorrect. Moreover,
these forward-looking statements were based upon various underlying
factors and assumptions, including the current technological
trends, the business relationship between the Company and its
stakeholders, the ability to operate in a safe and effective
manner, the timely delivery and installation at estimated prices of
the equipment supporting the production, assumed sale prices for
graphite concentrate, the accuracy of any Mineral Resource
estimates, future currency exchange rates and interest rates,
political and regulatory stability, prices of commodity and
production costs, the receipt of governmental, regulatory and third
party approvals, licenses and permits on favorable terms, sustained
labor stability, stability in financial and capital markets,
availability of equipment and critical supplies, spare parts and
consumables, the various tax assumptions, CAPEX and OPEX estimates,
all economic and operational projections relating to the project,
local infrastructures, the Company’s business prospects and
opportunities and estimates of the operational performance of the
equipment, and are not guarantees of future performance.
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, those risks, 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
March 23, 2023, including in the section thereof captioned “Risk
Factors”, which is available on SEDAR+ at www.sedarplus.ca and on
EDGAR at www.sec.gov. Unpredictable or unknown factors not
discussed in this Cautionary Note could also have material adverse
effects on forward-looking statements.
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 Company 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 Company
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 TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Further information regarding the Company is available in the
SEDAR+ database (www.sedarplus.ca), and for United States readers
on EDGAR (www.sec.gov), and on the Company’s website at:
www.NMG.com
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240214714914/en/
MEDIA Julie Paquet VP Communications & ESG Strategy
+1-450-757-8905 #140 jpaquet@nmg.com
INVESTORS Marc Jasmin Director, Investor Relations
+1-450-757-8905 #993 mjasmin@nmg.com
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