The Company is pleased to announce that its joint venture with Sunlands Co., Quantum Sunlands Partnership, has acquired the original equipment manufacture rights (OEM) for Sunlands Co.’s TES Graphite Cells. The name of the joint venture company will be changed to Sunlands Power, recognising its critical role in the delivery of the LDES technology to the market.
Highlights
Sunlands Power will be directly responsible for the manufacture and delivery to Sunlands Co. of the complete TES Graphite Cell facility. Included within this facility will be all the associated plant and equipment required for the connection to conventional thermal power plants (i.e., steam turbine generator packages). Importantly the OEM rights are not limited to or dependent on the flake graphite being sourced from the Company.
The Company's financial returns from Sunlands Power will be a significant addition to the returns delivered from its Uley 2 Project. Based upon the current market prices for graphite energy storage media and LDES facilities, the combined manufacture and sale of the flake storage media and the TES Graphite Cell facilities will generate revenues far in excess of those derived from the sale of Uley 2 flake to Sunlands Power. The Company will provide further information on the expected financial returns from its Sunlands Power interest upon the completion of the TES Graphite Cell pilot plant.
The capital to establish Sunlands Power's operations will be included within the sustainably linked bond financing currently being progressed by the parties. The Company and Sunlands Co. expect that Sunlands Power will deliver a return to them within the first year of achieving its minimum production capacity of 0.5GW of TES Graphite Cells per annum. This level of LDES requires a minimum 50,000 tonnes of Uley flake graphite based media.
Quantum Graphite director, Michael Wyer, commented that, "our initial arrangement with Sunlands Co. established the exclusive working relationship between the parties. The critical supply of the flake graphite-based energy storage media was the key step in building an end to end supply chain. The grant of OEM rights to Sunlands Power now underpins the Company's participation in the biggest market associated with the grid connected energy markets".
Key Target Market - Retrofitting of Coal Fired Power Stations
The Sunlands Power TES Graphite Cells are ideally suited to the retrofitting of coal fire power stations. Storing energy from renewables in the form of heat, TES Graphite Cells can retain this heat for weeks at a time and deliver this heat to pre-existing coal boilers to generate steam.
Essential to the generation of electricity from these power stations’ conventional turbine generators is the production of efficient high temperature steam. TES Graphite Cells’ high operating temperatures ensure the reliable, consistent production of high temperature steam to drive the type of utility scale turbines found at large grid scale coal fired power stations.
Deployment of TES Graphite Cells within existing coal fired power stations and their charging from renewables results in the direct reduction of CO2 emissions. In a typical 500MW (bitumus) coal fired thermal power plant, TES Graphite Cells can eliminate more than 3,000,000 tonnes of CO2 emissions per annum.
Cost Competitive Advantages of TES as Preferred Decarbonisation Solution
The Long Duration Energy Storage Council1 has stated that TES is a cost competitive decarbonisation solution today. It acknowledges that TES based LDES solutions are a more cost efficient (steam based) decarbonisation and electrification solution than carbon capture and storage (at existing coal fired power stations) or replacing gas with hydrogen or biomass.
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This article includes content from Quantum Graphite, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
+ Approval by NMG shareholders of private placements for an aggregate amount of US$37.5M by strategic partner Mitsui and long-time investor Pallinghurst in accordance with Regulation-61-101.
+ Private placements scheduled to close on May 2, 2024, with the surrender and cancellation of Mitsui and Pallinghurst's convertible notes dated November 8, 2022.
Nouveau Monde Graphite Inc. ("NMG" or the "Company") ( NYSE: NMG , TSXV: NOU ) announces that, at the special meeting of the Company's shareholders ("Shareholders") held today, Shareholders approved the previously announced aggregate US$37.5-million private placements from Mitsui & Co., Ltd. ("Mitsui") (TYO: 8031) and Pallinghurst Bond Limited ("Pallinghurst") that will be completed by NMG issuing common shares and warrants in exchange for the surrender and cancellation of each of Mitsui's and Pallinghurst's convertible notes dated November 8, 2022, as amended and restated on April 11, 2023 (the "Related Party Private Placements").
Mitsui had committed to a private placement of US$25 million and Pallinghurst to a private placement of US$12.5 million, in each case subject to the approval of disinterested Shareholders of each transaction in accordance with Regulation 61-101 Protection of Minority Security Holders in Special Transactions ("Regulation 61-101") and Policy 5.9 Protection of Minority Security Holders in Special Transactions ("Policy 5.9") and to regulatory approvals.
As per Regulation 61-101, the Company's disinterested directors engaged Fort Capital Partners British Columbia ("Fort Capital Partners") to carry out a valuation analysis and fairness opinion (the "Valuation and Fairness Opinion"). The Valuation and Fairness Opinion concluded that the Related Party Private Placements are fair, from a financial point of view, to Shareholders (other than Mitsui and Pallinghurst).
Matters Voted at the Special Meeting
Shareholders adopted all resolutions submitted for their approval, including the Related Party Private Placements. The complete voting results for each item of business are as follows:
RESOLUTIONS | IN FAVOR | WITHHELD | ||
Votes | % | Votes | % | |
Mitsui Private Placement | 43,333,378 | 99.36% | 278,086 | 0.64% |
Pallinghurst Private Placement | 31,165,461 | 99.11% | 281,398 | 0.89% |
Creation of a new control person, being Mitsui | 43,422,952 | 99.57% | 188,512 | 0.43% |
Creation of a new control person, being General Motors LLC | 30,951,993 | 99.49% | 159,471 | 0.51% |
Creation of a new control person, being Panasonic Holdings Corporation | 43,488,962 | 99.72% | 122,502 | 0.28% |
Closing of the Related Party Private Placements
NMG, Mitsui and Pallinghurst are scheduled to close the Related Party Private Placements on May 2, 2024, subject to the final acceptance of the TSX Venture Exchange.
Mitsui is exchanging its convertible note, dated November 8, 2022, as amended and restated on April 11, 2023, for 12,500,000 Common Shares in the capital of NMG (the "Common Shares") and 12,500,000 Common Share purchase warrants on the same pricing and other terms as the previously announced US$25 million equity investment in NMG (the "Tranche 1 Investment") by Panasonic Holdings Corporation and General Motors LLC (the "Anchor Customers"). NMG will also enter into an investor rights agreement (the "Investor Rights Agreement") with Mitsui at the closing of their investment. Pursuant to the Investor Rights Agreement, Mitsui will be required to "lock-up" its securities for a period of 12 months from the date of their investment. The Investor Rights Agreement also provides Mitsui with certain rights relating to its investment in NMG, namely certain board nomination and anti-dilution rights. Mitsui will be subject to a standstill limitation whereby it will not be able to increase its holdings beyond 20% of the issued and outstanding Common Shares for a period of three years.
Pallinghurst is exchanging its convertible note, dated November 8, 2022, as amended and restated on April 11, 2023, for 6,250,000 Common Shares and 6,250,000 Common Share purchase warrants on the same pricing and other terms as the Tranche 1 Investment with the Anchor Customers. NMG will enter into a registration rights agreement with Pallinghurst at the closing of their investment.
Concurrently with the redemption, surrender and cancellation of Mitsui's and Pallinghurst's convertible notes, 1,579,043 common shares that have been reserved for issuance will be issued as fully paid and non-assessable common shares.
About Nouveau Monde Graphite
Nouveau Monde Graphite is an integrated company developing responsible mining and advanced manufacturing operations to supply the global economy with carbon-neutral active anode material to power EV and renewable energy storage systems. The Company is developing a fully integrated ore-to-battery-material source of graphite-based active anode material in Québec, Canada. With enviable ESG standards and structuring partnerships with anchor customers, NMG is set to become a strategic supplier to the world's leading lithium-ion battery and EV 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 closing of the transactions contemplated with Pallinghurst and Mitsui, receipt of any regulatory or other approvals in respect of the initiatives described herein, the anticipated benefits of the initiatives described herein, the use of proceeds of the Related Party Private Placements, the anticipated timing and various steps to be completed in connection with the Related Party Private Placements, including closing, the intended supply of active anode material to GM and Panasonic Energy Co., Ltd., a wholly owned subsidiary of Panasonic and expected volume of active anode material per year, the Company's planned all-electric operations, the Company's initiatives and commitments described in this press release, including those related to ESG, the positive impact of the foregoing on project economics and shareholder value, the Company's relationship with its stakeholders, including First Nations, suppliers, contractors and employees, market and industry trends, the general business and operational outlook of the Company, the intended results of the initiatives described in this press release 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, including the changes in China's policy regarding restrictions on Chinese graphite materials exportations, political and social acceptability risk, environmental regulation risk, currency and exchange rate risk, technological developments, 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 27, 2024, 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/20240501858549/en/
MEDIA
Julie Paquet
VP Communications and ESG Strategy
+1-450-757-8905, ext. 140
jpaquet@nmg.com
INVESTORS
Marc Jasmin
Director, Investor Relations
+1-450-757-8905, ext. 993
mjasmin@nmg.com
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Unprecedented demand for battery metals is swinging attention to graphite and the critical role it plays in the batteries needed to power electric vehicles and renewable energy, and global hopes for a sustainable future.
This is where International Graphite (ASX:IG6) comes into play. Based in Western Australia, the company is on track to be one of Australia's first mine-to-market graphite producers and a new supplier of battery anode material to global battery manufacturers.
Of all the components in a lithium-ion battery, the biggest volume is in graphite which makes up 95 percent of the battery anode. It can take 50 to 100 kilograms of graphite to make a single battery – up to 10 times more graphite than lithium.
Photo credit: Visual Capitalist
Analysts agree that demand for graphite is inextricably linked to the surging demand for clean energy and graphite is in limited supply. The world now faces a significant shortage – one which will only grow more severe as economies ramp up their efforts to achieve net-zero.
The United States alone predicts a graphite shortfall of up to 1.2 million metric tons by 2030, to say nothing of how severe the shortage is likely to be on a global scale.
The graphite supply chain is racing to keep pace. Benchmark Mineral Intelligence predicts the world will need at least 97 new flake graphite mines by 2035. Although opening new graphite mines is a good start, the raw material alone will not meet the need for high quality, processed graphite suitable for making battery anodes. Currently, nearly every kilogram of battery anode material is processed through China and battery manufacturers worldwide are looking for additional and alternative supply. The pressure is on resource nations worldwide to develop downstream processing capability.
International Graphite is currently developing a planned graphite mine at Springdale, on Western Australia’s south coast, linked to a state-of-the-art research and downstream processing hub in the industrial town of Collie.
A pilot scale micronising and spheroidising plant with a capacity of approximately 4,000 tons per annum (tpa) has been commissioned at Collie, which is in the centre of Western Australia’s main electricity generation grid. International Graphite received a total of AU$8.5 million grant from the Western Australian government to support Australia’s first purpose-built graphite processing facility that will significantly increase the nation’s sovereign supply of critical battery minerals. The company intends to use the funds to advance its micronising operations and progress the design of downstream battery anode facilities, and mine-to-market battery anode feasibility work for processing of graphite concentrate feed from its Springdale graphite project.
The company’s vision for a complete mine-to-market business is designed to achieve maximum value from the natural graphite resource. Operating exclusively in Western Australia, it leverages one of the most attractive jurisdictions in the world for resource investment with the backing of supportive government policy and an ethical graphite supply chain built on the United Nations Sustainable Development Goals.
Ultimately, International Graphite is designing its entire business to be as efficient and sustainable as possible, bringing new graphite supplies to market, new jobs to Australian regional communities, and new export opportunities to the nation. Its model is closely aligned with the Australian Government's critical minerals strategy and the Western Australian Government's vision for a world-class renewable energy and battery hub around Collie.
To date, International Graphite has received more than AU$6.7 million in combined state and federal government investment.
Outstanding results have been achieved from exploration drilling at Springdale, on Western Australia’s south coast, where International Graphite owns a high-grade fine flake graphite deposit.
Comprising three exploration licenses and a prospecting license covering a total area of 180 square kilometers, International Graphite’s Springdale Project is located 25 kilometres east of Hopetoun and 150 kilometres from the port of Esperance on Western Australia’s south coast.
An extensive drilling program has been completed defining four new graphite targets from the first of seven potential anomalies identified by aeromagnetic survey. These are located very close to the existing mineral resource. Extensive areas are yet to be investigated and the company is confident that additional reserves will be discovered in the future.
Metallurgical testing has shown that the Springdale resource is well-suited to battery anode material production and would support a long-lived shallow open-pit mining operation.
Completion of the extensive 2022-2023 drilling campaign has paved the way for an increased mineral resource estimate that hailed the Springdale Graphite project as the second largest known graphite deposit in Australia. Total Springdale mineral resource estimate has been expanded from 15.3 Mt @ 6 percent total graphitic carbon (TGC) to 49.3 Mt @ 6.5 percent TGC.
International Graphite’s multifaceted processing operation will incorporate state-of-the-art research and development facilities with separate operations for graphite micronising and battery anode material production.
A pilot scale graphite micronising and spheroidising equipment commissioned in 2022 has since been upgraded to a larger, qualification scale plant which will launch the International Graphite brand in world markets and provide product samples for customer testing and qualification.
A definitive feasibility study has been completed for the establishment of a commercial scale micronising operation at Collie with a nominal capacity of 4,000 tpa. Besides being a product in its own right, micronised graphite is also a by-product in the manufacture of battery anode material. The micronising plant is expected to be operational before the end of 2024 and will use imported graphite concentrate feed until the Company’s Springdale mine and concentrator comes online creating a fully integrated circuit.
This approach is strategically timed to generate early cashflow for the business, as well as establishing early markets.
An initial scoping study has also been released for the establishment of a second manufacturing operation that will produce coated and uncoated purified, spheroidised graphite for lithium-ion battery anodes. Land has been earmarked at Collie with construction expected to commence in 2026.
Located at the southern end of Western Australia's main industrial strip, the town of Collie has many strategic advantages for industry. The Western Australian Government has committed an unprecedented AU$650 million to support regional economic growth and to advance the region as a hub for critical mineral processing and renewable energy.
One of Australia’s leading metallurgists and an authority on graphite project development, Phil Hearse founded International Graphite in 2018 and continues to lead the company’s growth and development. An engineer with more than 40 years of experience in diverse and challenging projects around the world, his extensive career has taken him from operational and technical roles at Broken Hill, Bougainville Copper, Queensland Nickel (QNI) and Gove Alumina to senior executive and managerial positions in engineering and operating companies.
Hearse is the owner and managing director of Battery Limits, one of Australia’s leading graphite metallurgy and process engineering firms. The company has assisted many listed public companies to develop bankable feasibility studies for graphite mines and concentrators and has generated significant intellectual property in downstream processing and knowledge of the end use market. Hearse has an MBA from Hull University UK and a Bachelor of Applied Science in primary metallurgy from the University of SA. He is a fellow of the Australasian Institute of Mining and Metallurgy and a fellow of the Australasian Institute of Mining and Metallurgy.
Andrew Worland is a mining executive and experienced ASX/TSX director with over 25 years in senior finance, corporate, project management and marketing roles in the Western Australian mining sector.
Worland's commodity experience includes exploration, development and operations in lead, zinc, nickel, cobalt, gold, iron ore, molybdenum, copper and uranium. He has a Bachelor of Commerce with a major in finance and marketing from the University of Western Australia and is a qualified chartered company secretary and fellow of the Governance Institute of Australia.
David Pass has played a key role in the technical development of International Graphite since the company’s inception. A metallurgist with 30 years in the mining industry, he brings a mix of operational processing, process design, project, due diligence skills and management experience including mine operations experience with Barrick Gold.
Pass is chief executive officer of Battery Limits and an acknowledged expert in graphite primary and downstream processing and has led several studies in graphite project development to definitive feasibility level. He holds a Bachelor of Science in metallurgy from Murdoch University and is a member of the Australian Institute of Mining and Metallurgy.
Matthew O’Kane is a senior mineral industry executive and company director with 25 years’ experience in the mining, commodities, and automotive sectors. He has held senior leadership roles in Australia, the US and Asia, in both developed and emerging markets, from start-up companies through to MNC’s. He has served on the board of mining companies in Canada, Hong Kong and Australia, and is currently managing director of Comet Resources (ASX:CRL) and a non-executive director of Azarga Uranium (TSX:AZZ) and Pursuit Minerals (ASX:PUR). O’Kane has been a non-executive director of International Graphite since the company was listed in April 2022.
