Nouveau Monde Graphite (TSXV: NOU; NYSE: NMG) 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 the company's ore-to-battery-market integrated graphite project in Quebec.
Under the strategic partnership framework, there is a 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.
"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," said Kazuo Tadanobu, president and CEO of Panasonic Energy, in a release.
Separately, NMG has entered into financing agreements with each of Mitsui, Pallinghurst and Investissement Qu?(C)bec that would see the company raise gross proceeds of US$50 million through the issuance of unsecured convertible notes. Under the private placement, Mitsui will subscribe for US$25 million in convertible notes, while Pallinghurst and Investissement Qu?(C)bec will each subscribe for US$12.5 million. In a statement, Guy Leblanc, CEO of Investissement Qu?(C)bec, said the investment reflects the organization's commitment to establishing Quebec as a leading North American hub for lithium-ion batteries.
Nouveau Monde 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 B?(C)cancour battery materials plant.
The goal is to proceed with project financing and the final investment decision on both the Matawinie mine and B?(C)cancour facility once that optimization phase is completed and all operational variables are well understood. Once that decision is made, Nouveau Monde anticipates a 28-month construction period to bring its operations to commercial production.
Nouveau Monde is currently working towards developing a fully integrated source of carbon-neutral battery anode material in Quebec.
"I am delighted to embark on this transformative partnership with experienced and industry-leading partners Mitsui and Panasonic Energy," said Nouveau Monde president and CEO Eric Desaulniers. "It is set to provide NMG with a solid commercial foundation for deploying our Phase 2 commercial operations."
This summer, the company released a feasibility study on the Matawinie mine project and B?(C)cancour battery material plant, outlining an integrated Phase 2 graphite operation with a combined after-tax net present value of $1.6 billion and internal rate of return of 21%. The projects are located within a 150-km radius of Montreal.
Shares of NMG rose 5% on the TSX Venture Exchange before noon in Toronto. The company has a market capitalization of $403 million.