Nemaska Lithium Inc. is announcing that it must adjust the implementation of its project, mainly because of delays to finalize its financing.
Nemaska Lithium Inc. (“Nemaska Lithium” or the “Corporation”) (TSX:NMX, OTCQX:NMKEF, Frankfurt:N0T) is announcing that it must adjust the implementation of its project, mainly because of delays to finalize its financing. As a result, the Corporation must downsize by letting go of 64 employees. This difficult decision comes after a rigorous review of the current situation and is aimed at both the optimization of current cash flow and the continuation of the project.
Nemaska Lithium is still confident in its ability to successfully complete the project. However, the Corporation cannot currently specify the precise date for closing the required financing, as no definitive agreement has yet been concluded with The Pallinghurst Group (“Pallinghurst”), to which the finalization of the project’s implementation timeline is directly connected. In this context, the Corporation is obliged to carry out a collective dismissal, as it expects that mine and plant production preparation activities will need to be slowed down pending the completion of financing. Depending on the site, the dates of employment termination will occur between the end of October and the end of December 2019.
“We have always asserted that we recruited the best talent to make this project a success. We are still deeply convinced of this, which makes this decision all the more difficult. As we cannot confirm the timeline for the resumption of construction, and although negotiations with Pallinghurst are progressing well, this is the responsible decision to be made,” says Guy Bourassa, President and CEO of Nemaska Lithium.
The Corporation remains committed to completing the required financing in order to accelerate the deployment of its project as soon as possible. It will also pursue its efforts to rapidly obtain a favourable decision from the Superior Court of Québec following its application in connection with its arrangement proceedings and seeking the discharge of the security relating to the USD 350M Bonds, which were reimbursed as prescribed.
Activity implementation rhythm adjusted in Whabouchi and Shawinigan
Over the next few weeks, the employees working at the Whabouchi mine will finish winterizing the site and assist the construction crews in completing certain work before the beginning of the winter season. Nemaska Lithium will thereafter see to preserve its assets and ensure the regulatory compliance of its facilities.
Having fulfilled the main objectives for its construction, the Shawinigan Phase 1 Plant will continue its activities until its complete shutdown at the end of December 2019. This demonstration plant, in operation since February 2017, has been a major asset for the development of the Whabouchi project, having showcased the reliability of its patented process and the exceptional quality of its product, intended for the lithium battery market.
“Once financing is completed, we will have a better visibility on the timeline for the implementation of the project and the resumption of more sustained activity. It is now time for us to roll up our sleeves, as we know how to, and continue moving forward in order to ensure the orderly resumption of activities with minimal delay when the time comes. With our team and partners, we are going to continue working relentlessly to make Nemaska Lithium a success. We sincerely thank the employees who will be leaving us and hope to see many of them back on our team once operations resume,” concluded Mr. Bourassa.
About Nemaska Lithium
Nemaska Lithium Inc. is a developing chemical company whose activities will be vertically integrated, from spodumene mining to the commercialization of high-purity lithium hydroxide. This lithium salt is mainly destined for the fast-growing lithium-ion battery market, which is driven by the increasing demand for electric vehicles and energy storage worldwide. With its products and processes, the Corporation intends to facilitate access to green energy, for the benefit of humanity.
The Corporation will be operating the Whabouchi mine in Québec, Canada, one of the richest lithium spodumene deposits in the world, both in volume and grade. The spodumene concentrate produced at the Whabouchi mine will be processed at the Shawinigan plant using a unique membrane electrolysis process for which the Corporation holds several patents.
The Corporation is a member of the S&P/TSX SmallCap Index, S&P/TSX Global Mining Index, S&P/TSX Global Base Metals Index, S&P/TSX Equal Weight Global Base Metals Index, and the MSCI Canada SmallCap Index. For more information, visit www.nemaskalithium.com.
Cautionary Statement on Forward-Looking Information
All statements, other than statements of historical fact, contained in this press release including, but not limited to, those relating to (A) the additional capital required to enable the Corporation to complete the project’s construction, (B) the eventual conclusion of a definitive agreement with Pallinghurst and closing of the investment, (C) the Corporation’s confidence in its capacity to successfully complete the project, (D) the enhanced visibility on the resumption of a more sustained activity once financing is completed, and (E) obtaining rapidly a favourable decision from the Court as regards its application seeking the discharge of the security relating to the Bonds, and (F) the expected resumption of the project’s construction and commissioning, constitute “forward-looking information” and “forward-looking statements” within the meaning of certain securities laws and are based on expectations and projections as of the date of this press release. Certain important assumptions by the Corporation in making forward-looking statements include, but are not limited to, reaching a definitive agreement with Pallinghurst in a timely manner, the obtaining of the additional capital required to resume activities and work, and the Corporation’s objective of moving work forward as much as possible in order to ensure the orderly resumption of activities with minimal delay once said resumption occurs, and the discharge of the security which secured the Bonds to allow financing.
Forward-looking statements contained in this press release include, but are not limited to, those related to (i) the optimal use of our cash assets while ensuring the project’s continuation, (ii) the uncertain timeline for the resumption of construction work, even though discussions with Pallinghurst are progressing well, (iii) the slowing down of production preparation activities at the Corporation’s mine and plant, (iv) the employment termination dates, (v) the finalization of the site’s winterization and associated work, (vi) the continuation of the Phase 1 Plant’s activities until December 31, 2019, (vii) the preservation of the Corporation’s assets, (viii) the possible rehiring of a good number of employees when activities resume, (ix) the potential success of the project, and (x) generally, the above “About Nemaska Lithium” paragraph which essentially describes the Corporation’s outlook. Forward-looking statements 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 Corporation 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.
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 of the forward-looking statements. There can be no assurance that the Pallinghurst investment will close or that other financing/strategic alternatives will be available, that the Corporation will meet the conditions under the Streaming Agreement, that the Court will grant the discharge of the security which secured the Bonds, that the Corporation will rehire a number of employees and that the Whabouchi mine and/or the electrochemical plant in Shawinigan will be commissioned and will begin production, as future events could differ materially from what is currently anticipated by the Corporation.
By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that estimates, forecasts, projections and other forward-looking statements will not be achieved or that assumptions do not reflect future experience. Forward-looking statements are provided for the purpose of providing information about management’s expectations and plans relating to the future. Readers are cautioned not to place undue reliance on these forward-looking statements as a number of important risk factors and future events could cause the actual outcomes to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates, assumptions and intentions expressed in such forward-looking statements. All of the forward-looking statements made in this press release are qualified by these cautionary statements and those made in our other filings with the securities regulators of Canada including, but not limited to, the cautionary statements made in the “Risk Factors” section of the Corporation’s Annual Information Form dated September 30, 2019, and the “Risk Exposure and Management” section of the Corporation’s quarterly Management Discussion & Analysis. The Corporation cautions that the foregoing list of factors that may affect future results is not exhaustive, and new, unforeseeable risks may arise from time to time. The Corporation 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.