+ New restrictions on Chinese graphite exports are forecasted to
exacerbate pressure on battery supply chains and accelerate
graphite onshoring. NMG is set to become the largest fully
integrated producer of natural graphite in North America.
+ Québec is rapidly emerging as a prominent hub for the battery
supply chain in North America with Tier-1 cell producer Northvolt
having just announced plans to establish a 60-GWh cell production
facility in the province, abundant natural resources, and clean
energy for industrial development.
+ As part of intensified commercial negotiations, NMG is working
to sign anchor multiyear sales agreements with tier-1 EV/battery
manufacturers to provide bankability confirmation to lenders,
finalize technical parameters for detailed engineering, and secure
long-term value for shareholders.
+ Panasonic Energy is now producing EV lithium-ion batteries at
its prototype production facilities testing NMG’s active anode
material, a major step toward a definitive offtake agreement.
+ NMG mandated Pomerleau as Construction Manager for the
pre-construction stage of both Phase-2 projects to support
construction scheduling, workforce planning, jobsite logistics,
procurement strategy, health and safety, environment, and quality
programs, as well as cost optimization.
+ Electrification calendar now established with Caterpillar to
deploy early learners and pilot models at Phase-2 Matawinie Mine,
to test equipment in actual terrain and weather, and to map the
transition to future zero-exhaust-emission production models.
+ Market trends remain favorable for the EV/battery sector;
September 2023 set a record for global EV sales, with over 1.3
million units sold.
+ Period-end cash position of $48.6 million.
New market dynamics set favorable conditions for Nouveau Monde
Graphite Inc. (“NMG“ or the “Company”) (NYSE: NMG, TSX.V: NOU) as
the Company maintains operational, commercial and financing focus
on advancing its development to the final-investment-decision
(“FID”) stage for its Phase-2 commercial facilities. The Company
reports steady progress on negotiations of multiyear offtake
agreements with top-tier battery and electric vehicle (“EV”)
manufacturers at a period of newly announced Chinese restrictions
on graphite exports. NMG is advancing the commercial parameters and
the execution plan for the Phase-2 Matawinie Mine and Bécancour
Battery Material Plan on the back of revived urgency for the
development of the North American battery supply chain.
This press release features multimedia. View
the full release here:
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Anode electrode sheets using NMG’s active
anode material currently produced and tested by Panasonic Energy.
(Photo: Business Wire)
Arne H Frandsen, Chair of NMG, declared: “While the market was
shaken by China’s announcement curtailment of graphite exports, our
unwavering business strategy continues to be reinforced thanks to
our localized and fully integrated graphite source. We remain
focused and diligently engaged on the thorough task of finalizing
anchor offtakes with battery/EV manufacturers. I am confident that
shareholders, lenders, and stakeholders share our commitment to
sound commercial foundations and exemplary operations on the
environmental, social, governance (“ESG”), and quality levels.”
Eric Desaulniers, Founder, President and CEO of NMG, said:
“Although announcements for additional battery production capacity
multiply across North America and Europe, the minerals and advanced
materials could very much become the bottleneck for manufacturing
cleantech solutions. Having a solid roster of potential customers,
we are converging efforts on optimizing our cost and financing
structure, securing long-term value in sales contracts, and mapping
our execution and operational readiness for success.”
Operations Overview: Scaling from Phase 1 to Phase 2
Determined to provide a turnkey and traceable source to battery
manufacturers, the Company has demonstrated an established capacity
to produce at all stages of graphite transformation, from ore to
active anode material, at its Phase-1 facilities. NMG operates a
concentrator, two shaping modules, two commercial-scale
purification furnaces, and a coating unit for a nameplate capacity
of 2,000 tonnes per annum (“tpa”).
NMG has successfully and repeatedly produced on-specifications
batches of active anode material as per potential customers’
individual requirements. Through active engagement with these
potential customers, the Company is building a robust model to
efficiently produce customized samples of varying specifications,
with short development and optimization time.
Production samples continue to demonstrate positive results both
at the Company’s laboratory and at a leading third-party testing
facility. NMG’s active anode material is now being tested within
Panasonic Energy’s battery prototype production line, enabling the
diligent progress of the qualification process. Supporting this
work and underlying commercial discussions, NMG and Panasonic
Energy Co., Ltd. (“Panasonic Energy”) actively cooperate to
strengthen technological development and process optimization for
the Company’s active anode material production.
To bridge development from Phase 1 to Phase 2, the Company
leverages contemplated commercial offtakes and intel from technical
engagement with potential customers into the engineering of the
Matawinie Mine and the Bécancour Battery Material Plant.
AtkinsRéalis and BBA currently support NMG on advancing design,
performing trade-off studies and value engineering, and supporting
cost optimization for each project.
NMG has also appointed Pomerleau as Construction Manager for the
pre-construction stage of its Phase-2 commercial facilities.
Pomerleau’s mandate covers the pre-construction management of the
Phase-2 Matawinie’ industrial facilities and the Bécancour Battery
Material Plant. Pomerleau is working closely with NMG’s project
team to prepare a detailed construction sequence and schedule, to
develop the contracting strategy, to optimize worksite logistics,
to expand the health and safety, environment, and quality
programs.
Pomerleau is also contributing to the budget revision, cost
optimization, and project control activities for both projects. NMG
aims to refine CAPEX estimates in light of advanced engineering,
contemplated offtake agreements, stabilizing material costs, and
synergies between the two sites for the proactive procurement
strategy. The Company will benefit from Pomerleau’s established
pool of workers and specialty subcontractors.
Construction permit demands as well as long-lead items tendering
packages are being prepared in preparation for the construction of
the Phase-2 projects.
Commercial Engagement Amid Tightening Market
Commercial negotiations are intensifying as the Company works
with potential tier-1 battery and EV customers to establish anchor
multiyear offtake agreements with a flexible pricing mechanism that
reflects NMG’s active anode material value and advantages, namely a
carbon-neutrality guarantee, strategic location, strong ESG
profile, and easy logistics. Via these multiyear contracts, NMG
seeks to provide commercial-capability assurance to lenders and
ensure long-term upside opportunities for shareholders.
On the back of their framework agreement targeting NMG’s fully
integrated ore-to-anode-material production, NMG and Panasonic
Energy, a wholly owned subsidiary of Panasonic Holdings Corporation
(TYO: 6752), are advancing negotiations toward definitive offtake
agreement. NMG and Panasonic Energy’s continued collaboration was
reaffirmed at a Japan-Canada trade alliance ceremony earlier this
fall as government and industry officialized efforts to enhance the
resilience of critical mineral global supply chains, localize
advanced manufacturing for the North American market, improve
adherence to ESG standards, and foster new investment
opportunities.
In addition to Panasonic Energy, the Company is engaged in
discussions with other tier-1 battery and EV manufacturers for
potential offtake agreements. NMG is focused on securing the best
agreements and positioning the Company for long-term growth in the
Western industry.
Indeed, recent announced restrictions on graphite exports by
China’s Ministry of Commerce and General Administration of Customs
are exacerbating pressure on the North American and European
battery supply chain. China currently controls 65% of the natural
graphite global production (US Geological Survey, January 2023) and
over 99% of spherical graphite refining for lithium-ion batteries
(Benchmark Mineral Intelligence, Q3-2023).
This new requirement may offer opportunities for producers
outside of China and support graphite prices. Battery manufacturers
are already starting to build up inventories in anticipation of
these restrictions (Benchmark Mineral Intelligence, October 2023)
and analysts forecast an acceleration of graphite onshoring (UBS,
October 2023).
The situation reiterates the need for local, reliable, and
scalable supply chains for Western battery and EV producers.
Québec, Canada, is rapidly emerging as a prominent hub for the
battery supply chain in North America, predominantly due to its
low-carbon hydropower electricity and abundant raw materials.
Swedish tier-1 cell producer, Northvolt announced in September 2023
plans to establish a 60-GWh cell production facility in the
province, scheduled to commence operations in 2026. This $7-billion
venture marks the largest-ever investment in Québec and contributes
to the growing presence of EV battery manufacturing in the
country.
EVs continue to gain market shares; September 2023 set a new
record for global electric vehicle sales, with over 1.3 million
units sold (Rho Motion, October 2023). To meet the growing demand,
the lithium-ion battery industry is now developing 9,246 GWh of
global production capacity by 2030 through 408 gigafactories
(Benchmark Mineral Intelligence, October 2023) which would require
11,717,000 tpa of graphite.
Set to become the largest fully integrated producer of natural
graphite in North America, NMG is benefiting from these various
market trends as demonstrated in current commercial engagement.
Sustainable Design and Execution
In line with its strong ESG resolute, the Company is advancing
its electrification program. NMG and Caterpillar Inc.
(“Caterpillar”) have established a calendar to deploy early
learners and pilot models at the Phase-2 Matawinie Mine. These
models will be tested in real-world conditions and will help guide
the transition to future zero-exhaust emission production models.
The site’s charging infrastructure is also being designed through
modeling and simulations to optimize technology choices in relation
to operational schedules and the mining plan, identify peak power
demand, and define energy management strategies.
Complementary to plans for the Matawinie Mine, NMG obtained
confirmation of a discounted industrial rate for its operations and
a 77 MW electricity block for the Phase-2 Bécancour Battery
Material Plant. Québec’s energy grid being among the greenest in
the world, NMG’s confirmed capacity to tap into the network
provides a solid foundation for deploying new equipment and
proprietary technologies with a view to produce advanced materials
with a very low climate change impact, in line with global
decarbonization efforts.
To inform its project development and secure its social license
to operate, the Company maintains open and proactive engagement
with stakeholders and First Nations. NMG continues to invest in
local workforce training ahead of its Phase-2 operations via
on-the-job training programs. The Diploma of Vocational Studies in
Production Equipment Operation based in Saint-Michel-des-Saints is
now at its ninth cohort, leading graduates to a position as an
operator at the Matawinie Phase-1 demonstration plant, while
recruitment for the Condensed College Diploma in Industrial
Processes for Clean Technologies is starting for learners in the
Bécancour region. These two programs are developed in collaboration
with education organizations and industrial partners with a view to
expand synergies and promote local opportunities.
For the nine-month period ended September 30, 2023, NMG had an
Occupational Safety and Health Administration (“OSHA”) Recordable
Incident Rate of 4.77 at its facilities due to minor slip-and-fall
incidents. The Company is paying increased attention to slippery
surfaces and raising awareness of workers.
The Company’s period-end cash position of $48.6 million.
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
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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 entering into definitive offtake, sales and
investment agreements, including with Panasonic Energy, the
intended commercial production of high-performing active anode
material with a carbon-neutral footprint, the Company’s commitments
and initiatives described in this press release, including those
related to ESG, the Company’s performance with respect to the
initiatives described in this press release, including
qualification process and electrification strategy, the positive
impact of the foregoing on project economics, including
governmental action on the Company and the industry, the Company’s
relationship with its stakeholders, market and industry trends, the
intended results of the initiatives described in this press
release, other market participant’s projects in Québec, NMG’s
objective of becoming the largest fully integrated producer of
natural graphite in North America, 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/20231109028157/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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