- Ahead of Phase-2 development, Company-wide focus on securing
the best multiyear sales agreements to provide bankability
confirmation to lenders, final technical parameters for detailed
engineering of the Bécancour Battery Material Plant, commercial
visibility for NMG’s business execution plan, and long-term value
for shareholders.
- Continuous progress on defining technical and commercial
parameters for a long-term agreement with Panasonic Energy on the
back of the MoU offtake.
- Advancement of parallel commercial discussions with a few
selected tier-1 battery and EV manufacturers for other potential
offtake agreements.
- Continued extensive testing at NMG’s Phase-1 plants in close
collaboration with potential customers' technical teams to address
process efficiency and challenges, help refine plans for Phase-2
facilities, and reduce risks ahead of commercial operations.
- Definitive agreements signed with Caterpillar to collaborate on
technology development, testing, and procurement of all-electric
fleet and infrastructure for the Phase-2 Matawinie Mine, plus
opportunities for NMG to supply carbon-neutral graphite materials
to Caterpillar for its sustainable battery supply chain.
- Underwritten public financing of US $22 million in support of
the advancement of the Matawinie Mine and Bécancour Battery
Material Plant towards the final investment decision and project
financing.
- Advanced discussions with multiple governmental agencies and
programs to optimize and lower the cost of the targeted capital
structure for the project financing.
- Downward pressure on FOB-China prices of all key battery
materials with expected correction as EV adoption growth continues
and forecasted global production of lithium-ion batteries now
reaches 8,930 GWh by 2030 (Benchmark Mineral Intelligence, July
2023).
- Ongoing commitment to prioritize safety amidst a period of
intense spring freshet, forest fires in northern areas, and heavy
rains. Year-to-date OSHA rate of 1.86 at NMG’s facilities and 0 at
contractors’ work site, with no major environmental incident.
- Period-end cash position of CA$59.8 million.
Nouveau Monde Graphite Inc. (“NMG“ or the “Company”) (NYSE: NMG,
TSX.V: NOU) reports advancement on the development of its fully
integrated value chain, from ore to battery materials, set to
become one of North America’s largest sources of natural graphite.
NMG is working to secure long-term sales agreements for its active
anode material and set up financial and operational conditions for
the successful execution of its commercial plans comprising the
Phase-2 Matawinie Mine and Bécancour Battery Material Plant.
Arne H Frandsen, Chair of NMG, declared: “Recent extreme weather
events, here in Québec and around the world, are emphasizing the
urgency of decarbonization and the importance of environmental
stewardship. Serving the energy transition is core to NMG’s
business model. To that end, the team is making meaningful progress
towards scaling up its operations to bring to market carbon-neutral
active anode materials for the battery and electric vehicle (“EV”)
markets. Commercial, financial, and operational building blocks are
being aligned to form a solid foundation for the Company’s
long-term success.”
Eric Desaulniers, Founder, President and CEO of NMG, added:
“Time to market is vital to the realization of our growth plans.
Current extensive efforts on product specifications and perfecting
manufacturing parameters provide us with a wealth of technical
knowledge that significantly de-risks our Phase-2 development and
bring us nearer to securing a or many long-term binding bankable
offtakes. In addition, this optimization work through our Phase-1
facilities offers greater assurance to our potential customers on
the quality and performance of our graphite materials while
informing pricing and commercial discussions to adequately reflect
the value of our production.”
Setting Strong Commercial Foundations for the Company’s
Phase-2 Development
As it enters the remaining preparation stages for carrying out
its Phase-2 development, the Company is channeling its efforts and
resources, both at the operational and corporate levels, on
securing the best multiyear sales agreements to provide bankability
confirmation to lenders, final technical parameters for detailed
engineering of the Bécancour Battery Material Plant, commercial
visibility for its business execution plan, and long-term value for
its shareholders.
NMG is focused on setting up critical financial and operational
conditions for success through long-term agreements and a modular
pricing mechanism that reflects the Company’s value-added (e.g.
carbon neutrality guarantee, location, strong ESG profile, easy
logistics, etc.) and potential for increased revenues as the market
evolves.
To that end, NMG’s Phase-1 operations continue to deliver
samples, covering a variety of specifications to reflect each
potential customer’s requirements and of greater volumes as the
Company progresses through qualification processes. NMG has
demonstrated its capacity to reach specifications with positive
results on sample testing both at the Company’s laboratory and at a
leading third-party facility.
Through testing and engagement with potential customers, NMG is
addressing process efficiency and challenges, and building models
to efficiently produce samples of varying specifications, with
short development and optimization duration. The maturation of
operational and processing parameters directly feeds into the
engineering of the Phase-2 Bécancour Battery Material Plant
initiated with engineering firm BBA.
On the basis of their Memorandum of Understanding (“MoU”) on an
offtake agreement, NMG and Panasonic Energy Co., Ltd. (“Panasonic
Energy”) are actively working together on product qualification and
establishing a contemplated definitive offtake agreement. Regular
meetings and on-site visits continue to advance technical and
commercial components.
In parallel to negotiations with Panasonic Energy, the Company
is engaged in a number of commercial discussions with tier-1
battery and EV manufacturers for potential offtake agreements.
Sustained interest is supported by the supply of samples, quality
checks, site visits to the Company’s Phase-1 operations, and ESG
due diligence.
Phase 2 is advancing in parallel through detailed and
environmental engineering of the Matawinie Mine – overall
engineering now exceeding 70% completion, electrification planning
supported by definitive agreements with Caterpillar Inc.
(“Caterpillar”), as well as preparation of project’s execution and
contracting strategy, construction permit demands and long-lead
items tendering packages.
ESG Commitment & Corporate Development
The achievement of standards demanded by potential customers is
an essential prerequisite, as well as an important competitive
advantage. Hence, the Company is placing quality as a central
component of its business with the implementation of an ISO
9001-compliant management system and the fostering of a culture of
excellence, continuous improvement, and environmental
stewardship.
NMG aims to become the leading integrated natural graphite
producer in North America, aligning with the growing call for an
ethically and environmentally responsible energy transition. With a
strong focus on sustainability and a climate-positive business
model, the Company continually works to maximize its impact in the
sector. The Company issued its 2022 ESG Report on May 10, 2023,
which presents its management approach, key programs, advancements,
case studies, and metrics. NMG’s established ESG disclosure
practices should facilitate the transition to the International
Sustainability Standards Board’s (“ISSB”) new standards IFRS S1 and
IFRS S2 to be integrated into financial reporting.
While Québec experienced intense spring freshet, forest fires in
northern areas, and heavy rains in Q2-2023 and beyond, the Company
was able to maintain its operations and ensure safe working
conditions. For the six-month period ended June 30, 2023, NMG had
an Occupational Safety and Health Administration (“OSHA”)
Recordable Incident Rate of 1.86 at its facilities and 0 at its
contractor work sites, with no major environmental incidents.
NMG closed an underwritten public offering of US $22 million to
advance the development of the Matawinie Mine and the Bécancour
Battery Material Plant towards the final investment decision
(“FID”) and project financing. To optimize its financing structure
and reduce the associated cost of capital, the Company is actively
pursuing governmental levers at the provincial and federal
levels.
The Company’s period-end cash position is $59.8 million.
Market Outlook
Amid a context of near-term macroeconomic uncertainty, the
prices (FOB China) of essential battery materials such as lithium,
cobalt, nickel, and graphite experienced significant downward
pressure in H1-2023. With cathode and anode manufacturers reducing
existing inventories or exercising caution with new orders,
critical battery material prices dropped between 20% and 40% – 22%
in the case of graphite – reported Benchmark Mineral Intelligence.
The decline can be partly attributed to a slowdown in Chinese
demand, new production capacity as well as the U.S. and Europe's
efforts to establish their own critical minerals supply chains.
Despite a slower start to EV sales in 2023, the market saw a
year-over-year increase of 36% and is expecting growth in H2-2023
(Rho Motion, June 2023). The adoption of EVs in North America is
currently being stimulated by the introduction of multiple new
models by leading market participants and structuring partnerships
to accelerate the deployment of charging networks.
Hence, analysts foresee a rise in graphite demand and an upward
correction in pricing (Benchmark Mineral Intelligence, July 2023).
NMG believes there is a disconnect between supply and demand
dynamics in North America versus China and that the long-term price
in this market should namely reflect lower geopolitical risk,
compliance with the U.S. Inflation Reduction Act requirements, a
“greenium” price premium based on improved carbon footprint of
North American graphite, as well as the simplified logistics and
inventory costs.
To meet the increasing demand for EVs and cleantech
applications, the lithium-ion battery industry is now targeting the
development of 8,930 GWh of global production capacity by 2030
through 399 gigafactories (Benchmark Mineral Intelligence, July
2023). Accordingly, the projected demand for battery materials is
set to increase up to fivefold, with graphite outpacing the other
metals at 10,537,000 tpa by the end of the decade (Benchmark
Mineral Intelligence, July 2023).
NMG's turnkey ore-to-battery-materials production model and its
strategic advantages, such as its localization, proprietary
ecotechnologies, proven production capacity, carbon-neutral
profile, and favorable jurisdiction benefits including clean
hydropower, flexible logistics, and stability in fiscal and
political environments, ideally position the Company to serve
Western markets seeking to reduce their reliance on Chinese supply
chains.
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 timeline and costs of the initiatives and projects
described in this press release, the entering into definitive
offtake and sales agreements, including with Panasonic Energy, the
contemplated pricing mechanism, 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, the positive impact of the foregoing on project economics,
including the positive impact of fiscal measures and governmental
incentives on the Company, the Company’s relationship with its
stakeholders, market and industry trends, forecasts of future
graphite demand and supply, the interest of potential customers,
the ability to obtain appropriate and sufficient financing required
for the development of the Matawinie Mine and Bécancour Battery
Material Plant, the planned development of the Matawinie Mine and
the Bécancour Battery Material plant as well as their demonstration
plants and other development plans, the intended results of the
initiatives described in this press release, the expected
electrification strategy and its intended results and benefits, the
projection of developing North America’s largest integrated source
of natural graphite materials for the energy transition, the
general business and operational outlook of the Company, 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 22, 2022, including in the section thereof captioned “Risk
Factors”, which is available on SEDAR at www.sedar.com 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.sedar.com), 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/20230811900543/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
Nouveau Monde Graphite (TSXV:NOU)
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