NextSource Materials Announces First Production of SuperFlake Graphite at Molo Mine in Madagascar

NextSource Materials Announces First Production of SuperFlake Graphite at Molo Mine in Madagascar

NextSource Materials Inc. (TSX:NEXT)(OTCQB:NSRCF) ("NextSource" or the "Company") is pleased to announce the first production of SuperFlake® graphite concentrate at its Molo mine in Madagascar

President and CEO, Craig Scherba, commented:

"First production of our SuperFlake® graphite is a significant achievement for NextSource and a testament to the dedication and hard work of our commissioning and operations teams, our employees and contractors, as well as the ongoing support that we have received from the local community and government. As we ramp up the production stage of operations, the Company is in the enviable position of transitioning into a significant and sustainable global producer of high-quality graphite and anode material just as demand for their use in lithium-ion batteries is growing exponentially."

NextSource Materials Inc., Thursday, June 22, 2023, Press release picture
Molo mine workforce alongside first tonne of SuperFlake® graphite concentrate

As part of the commissioning and optimization of the processing plant, the commissioning sequence was prioritized for initial production of coarse flake concentrate, with the first tonne of production consisting of +48 mesh (jumbo size) SuperFlake® graphite.

Since initiation of plant commissioning on March 23, 2023, the commissioning and operations teams have progressed methodically through debottlenecking and optimization activities. The operations team will now shift their focus to ramping up the plant throughput to its nameplate capacity of 17,000 tonnes per annum.

The Company expects to sell all the flake graphite produced at the Molo Graphite Mine to key customers under existing offtake agreements, which includes Germany's thyssenkrupp Materials Trading GmbH and the Company's Japanese technical partner, whom is the main supplier of value-added graphite to Japan's largest anode processor that in turn supplies multiple Japanese and international OEMs with graphite anode material.

The Company continues to be engaged in advanced discussions with several major EV companies (OEMs) and has received requests for multi-tonne samples of battery anode material as part of the OEMs qualification process. As such, the Company will begin sending flake graphite qualifying material to its Battery Anode Facility (BAF) technical partners for conversion into coated, spheronized, purified graphite ("CSPG"), which is the final form of anode material that is assembled along with cathode material into finished lithium-ion batteries used in electric vehicle ("EV") applications.

Mauritius Battery Anode Facility and Global BAF Strategy

The Company announced on February 28, 2023 its strategy for the staged buildout of a series of BAFs in key geographic locations. The BAFs are value-added processing facilities that convert flake graphite into CSPG.

BAF Strategy Highlights:

  • Plans to construct multiple BAFs capable of producing CSPG anode material for use in lithium-ion batteries for EV applications in key jurisdictions. The BAF designs will leverage the Company's exclusive partnership with two leading value-added graphite processors and use their proprietary and well-established graphite anode processing technology, which currently produces CSPG for the supply chains of major OEMs, including Tesla and Toyota.
  • The first BAF will be in Mauritius (the "Mauritius BAF"), which was selected due to its proximity to the Molo Graphite Mine in Madagascar and its position on strategic shipping routes to Asian markets.
  • A long-term industrial lease has been signed to build the Mauritius BAF within an exisiting industrial facility in Port Louis, Mauritius. The BAF site location is also classified as an Industrial Freeport, with a 3% corporate tax rate and 0% VAT.
  • A technical study for the Mauritius BAF with an initial production capacity of 3,600 tpa (Line 1) of CSPG (the "Mauritius BAF Technical Study") dated February 28, 2023 estimated initial capital costs and working capital investments of US$32.8 million and annual revenues at US$33.7 million with an EBITDA of US$13.2 million. The resulting post-tax economic results demonstrated an NPV of US$106.9 million using an 8% discount rate, an IRR of 42.7% and a payback of 2.2 years.
  • Adding 3 additional lines (Lines 2,3,4) to the Mauritius BAF for a total capacity of 14,400 tpa of CSPG demonstrated a total post-tax NPV8% of US$439.7m, incremental capex US$74m, IRR of 45.8%
  • Subject to obtaining necessary funding, completion of the front-end engineering and design (FEED) study, and completion of the environmental and social impact assessment (ESIA) process, the Company is targeting the start of a 12-month construction process in Q3 2023 resulting in potential initial production at the Mauritius BAF in Q3 2024.
  • Evaluation of the potential construction of a BAF in North America and initiation of the application process to access various financial loans and grants offered under Canadian federal and provincial programs and under the U.S. Inflation Reduction Act.
  • Evaluation of the potential construction of a BAF in the United Kingdom (UK) and initiation of the application process to access various financial loans and grants offered under the UK Government Automotive Transformation Fund.
  • Evaluation of the potential construction of a BAF in the European Union.
  • Evaluation and potential construction of an artificial graphite (AG) production facility, which would enable the Company to supply AG anode material along with natural flake-based anode material.

About NextSource Materials Inc.

NextSource Materials Inc. is a battery materials development company based in Toronto, Canada that is intent on becoming a vertically integrated global supplier of battery materials through the mining and value-added processing of graphite and other minerals.

The Company's Molo graphite project in Madagascar is one of the largest known and highest-quality graphite resources globally, and the only one with SuperFlake® graphite. The Molo mine has begun production, with Phase 1 mine operations currently being optimized to reach its nameplate production capacity of 17,000 tpa of graphite concentrate.

The Company is also developing a significant downstream graphite value-add business through the staged rollout of Battery Anode Facilities capable of large-scale production of coated, spheronized and purified graphite for direct delivery to battery and automotive customers, outside of existing Asian supply chains, in a fully transparent and traceable manner. The first of its Battery Anode Facilities will be located in Mauritius with initial production targeted in Q3 2024.

NextSource Materials is listed on the Toronto Stock Exchange (TSX) under the symbol "NEXT" and on the OTCQB under the symbol "NSRCF".

For further information about NextSource visit our website at www.nextsourcematerials.com or contact us at +1.416.364.4911 or email Brent Nykoliation, Executive Vice President at brent@nextsourcematerials.com or Craig Scherba, President & CEO at craig@nextsourcematerials.com.

Safe Harbour: This press release contains statements that may constitute "forward-looking information" or "forward-looking statements" within the meaning of applicable Canadian and United States securities legislation. Readers are cautioned not to place undue reliance on forward-looking information or statements. Forward looking statements and information are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", "potential", "possible" and other similar words, or statements that certain events or conditions "may", "will", "could", or "should" occur. Forward-looking statements include any statements regarding, among others, timing of, and completion of, commissioning the processing plant, construction of the Solar Hybrid Battery System, and commissioning of the Molo mine, timing of construction and completion of the Mauritius BAF and proposed timing of future locations of additional BAFs, timing and completion of front-end engineering and design and ESIA permitting, the economic results of the BAF Technical Study including capital costs estimates, operating costs estimates, payback, NPV, IRR, production, sales pricing and working capital estimates, the construction and potential expansion of the BAFs, expansion plans, as well as the Company's intent on becoming a fully integrated global supplier of critical battery and technology materials. These statements are based on current expectations, estimates and assumptions that involve several risks, which could cause actual results to vary and, in some instances, to differ materially from those anticipated by the Company and described in the forward-looking statements contained in this press release. No assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur or, if any of them do so, what benefits the Company will derive there from. The forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the forward-looking statements, whether because of new information, future events or otherwise, except as may be required by applicable securities laws. Although the forward-looking statements contained in this news release are based on what management believes are reasonable assumptions, the Company cannot assure investors that actual results will be consistent with them. These forward-looking statements are made as of the date of this news release and are expressly qualified in their entirety by this cautionary statement. Subject to applicable securities laws, the Company does not assume any obligation to update or revise the forward-looking statements contained herein to reflect events or circumstances occurring after the date of this news release.

SOURCE: NextSource Materials Inc.



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Not for distribution to U.S. news wire services or for dissemination in the United States or to a U.S. Person.

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Highlights

- Altech signs collaboration agreement with AMPower for early market entry into Europe, Australia and the USA

- AMPower presently produces conventional zebra design sodium nickel chloride batteries for Uninterrupted Power Supply (UPS) and are developing BESS and traction batteries

- Altech's CERENERGY(R) batteries use the same sodium nickel chloride chemistry, but are especially designed for high performance energy storage systems (ESS)

- Altech and AMPower will cooperate on sodium nickel BESS development. Each partner will have the authority to distribute the co-developed BESS under its own brand

- AMPower will manufacture energy storage packs in accordance with Altech specifications and supervision under Altech branding and distribution

- Altech gains immediate market entry and presence for sodium nickel chloride batteries to establish its energy storage battery market especially in Europe and Australia

- CERENERGY(R) cell technology I/P will not be shared with AMPower

- Altech's CERENERGY(R) 120 MWh battery project development in Germany remains on track

- Preliminary funding approval from the German Government for 46.7 million Euro having been received

Chilwee is the third largest e-mobility battery manufacturer in China, with an annual turnover of US$20 billion, 23,000 employees, and production capabilities spanning lead-acid, lithium-ion, sodium-ion, and next-generation battery technologies. AMPower currently manufactures conventional Zebra-type sodium nickel chloride (Na/NiCl2) solid-state batteries-using the same chemistry as CERENERGY(R)-but mainly for the small Uninterrupted Power Supply (UPS) industrial market. AMPower was originally established as a joint venture with General Electric to produce sodium nickel chloride UPS batteries under the Durathon brand.

In the initial phase, AMPower will produce sodium nickel chloride solid state UPS batteries for Altech which will be under Altech brand, supervision and specification for distribution across Australia, Europe, and the USA. This strategy provides a faster pathway to cash flow for Altech.

This will strengthen the market presence and branding of Altech while the company advances and secures funding for its CERENERGY(R) 120 MWh energy storage project in Germany.

Several battery models that will be offered by Altech immediately are shown above. These sodium nickel chloride UPS batteries are completely fireproof, featured long cycle life, and operate reliably in both extreme heat and cold. A key advantage of these sodium nickel chloride UPS batteries is their capacity to stay fully charged, idle, and instantly ready for discharge for more than 10 years-without the need for regular maintenance or the frequent replacements required by leadacid, lithium-ion or Ni-Cad batteries. These UPS batteries also serve a unique niche in explosion-proof environments or locations where lithium-ion batteries are restricted or banned. To capture this market, Altech has recruited a team of experienced marketing professionals to drive the sales process.

ESS Batteries

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BENEFITS FOR AMPOWER

AMPower's current facility is operating at an annual production rate of approximately 100 MWh, primarily supplying the small-scale UPS commercial market with 20-30 kWh battery units. The company has the ability to scale production to 200 MWh per annum with minimal additional capital investment. By supplying Altech's grid-scale battery packs, AMPower will be able to substantially increase its individual cell production volumes, unlocking greater economies of scale and reducing overall unit costs. Altech will provide the sales expansion needed to drive this market entry and support the ramp-up of AMPower's operations.

BENEFITS FOR ALTECH

Altech's new go-to-market strategy is designed to accelerate commercial progress and operational readiness while delivering early financial returns. By launching UPS and grid-scale battery packs ahead of commissioning its CERENERGY(R) plant in Germany, Altech will establish a steady revenue stream to offset operational costs and reduce reliance on external funding during the transition to full-scale production. Early market entry enables Altech to build a customer base across key regions-including Australia, Europe, and the United States-while strengthening brand recognition and market credibility.

This first-mover advantage also mitigates risks from competing battery technologies, as Altech's sodium nickel chloride (Na/NiCl2) batteries gain real-world application experience ahead of rivals.

The collaboration further provides Altech with direct exposure to battery production and systems integration, offering hands-on experience in areas such as BESS assembly, energy management systems, and system thermal control. These practical insights will support the refinement and optimisation of Altech's CERENERGY(R) battery packs.

SAME CHEMISTRY - ORIGINAL TECHNOLOGY

ZEBRA cells originally designed in the early 90s employ the same sodium nickel chloride (Na/NiCl) cell chemistry that forms the basis of Altech's CERENERGY(R) technology, however with an entirely different geometry and use profile. This proven chemistry is inherently non-flammable, highly tolerant of extreme temperatures, and delivers long cycle life with stable performance. ZEBRA batteries are particularly well suited for UPS systems and smaller energy storage applications.

CERENERGY(R) represents the next generation of sodium nickel chloride technology, featuring an advanced tubular design that enhances thermal management, improves electrochemical efficiency, and delivers higher energy density beside simplifying the manufacturing process whilst increasing quality, reliability and performance. Its simplified architecture reduces inactive material, substantially lowers system costs, and increases reliability-making it a scalable and robust solution for grid - scale stationary energy storage. Notably, the new cell design delivers a 2.6-fold increase in capacity, rising from 38 Ah to 100 Ah, marking a significant leap in performance. In addition CERENERGY(R) feature a number of other improvements in terms of material composition, electrode design and composition, which are part of the confidential IP and shall not be publicised.

Importantly, the cooperation with AMPower ZEBRA UPS batteries followed by small and medium size energy storage systems with the branding of Altech helps build market acceptance of sodium nickel chloride technology while fully complementing, rather than competing with, the development of the CERENERGY(R) grid scale battery storage production project in Germany.

Altech Group Managing Director Iggy Tan said:

"Altech is experiencing exceptional interest in our sodium nickel chloride solid-state battery technology, especially from customers seeking safer, more reliable alternatives to lithium-ion. These batteries are inherently fireproof, perform reliably in extreme temperatures, and offer strong environmental credentials - making them an ideal fit for the needs of the stationary energy storage market. Growing concerns over battery fire risks, particularly in data centres and AI facilities, are further accelerating demand. Our collaboration with AMPower enables immediate production, and our offtake customers are eager to secure supply. With special focus on UPS as well as small and medium size energy storage this early market entry strategy is augmenting and not competing with the large scale grid energy storage Cerenergy Battery strategy. By moving quickly to meet this demand, Altech is positioning itself as a leader in what we see as the next major wave in battery storage innovation."

To view details of the Agreement, please visit:
https://abnnewswire.net/lnk/PEUQAPMZ



About Altech Batteries Ltd:

Altech Batteries Limited (ASX:ATC,OTC:ALTHF) (FRA:A3Y) is a specialty battery technology company that has a joint venture agreement with world leading German battery institute Fraunhofer IKTS ("Fraunhofer") to commercialise the revolutionary CERENERGY(R) Sodium Alumina Solid State (SAS) Battery. CERENERGY(R) batteries are the game-changing alternative to lithium-ion batteries. CERENERGY(R) batteries are fire and explosion-proof; have a life span of more than 15 years and operate in extreme cold and desert climates. The battery technology uses table salt and is lithium-free; cobalt-free; graphite-free; and copper-free, eliminating exposure to critical metal price rises and supply chain concerns.

The joint venture is commercialising its CERENERGY(R) battery, with plans to construct a 100MWh production facility on Altech's land in Saxony, Germany. The facility intends to produce CERENERGY(R) battery modules to provide grid storage solutions to the market.

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