MONTRAL--(BUSINESS WIRE)--May 16, 2022--
Nouveau Monde Graphite Inc. (“NMG”) (NYSE: NMG) (TSX-V: NOU) and Mason Graphite Inc.(“Mason Graphite”) (TSX-V: LLG) (OTCQX: MGPHF) are pleased to announce that they have entered into an investment agreement (the ”Investment Agreement”) with a view towards the development and operation of Mason Graphite’s Lac Guret property (the “Property”).
Highlights include:
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On closing, NMG and Mason Graphite to enter into an option and joint venture agreement (the “Option and JV Agreement”) pursuant to which the parties will collaborate to advance the Property, based in Qubec, Canada, with a view to form a joint venture (the “Joint Venture”);
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NMG to make a concurrent equity investment in Mason Graphite of an aggregate amount of up to C$5.0 million payable in two instalments (the “Equity Investment”, and together with the formation of the Joint Venture, the “Transaction”);
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Conditions for the formation of the Joint Venture include: (i) a minimum of C$10.0 million of expenditures from NMG on the Property, and (ii) the completion of an updated feasibility study on the Property based on an estimated production scale of a minimum of 250,000 tonnes per annum of graphite concentrate, to be ascertained based on customer demand as well as technical and environmental possibilities. The latest feasibility study published by Mason Graphite is based on 51,900 tonnes per annum;
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Assuming the exercise of the option and formation of the Joint Venture, NMG’s and Mason Graphite’s interest in the Joint Venture to be 51% and 49%, respectively, and NMG to be appointed as operator of the Joint Venture;
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Joint Venture to be funded by NMG and Mason Graphite on a pro rata basis; failure to fund work program commitments in the Joint Venture to result in a 1% dilution for each unfunded tranche of C$5.0 million;
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The Joint Venture will have full access to NMG’s Phase-1 natural graphite flake concentrator plant currently in operation in Saint-Michel-des-Saints, Qubec (the “Demonstration Plant”) in order to accelerate the qualification and commercialization of its graphite, which has been proven instrumental as per NMG’s recent successful experience. To date, NMG has invested approximately C$30.0 million in the Demonstration Plant;
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The Joint Venture will benefit from NMG’s depth of personnel and commercialization capabilities; NMG currently employs nearly 100 full-time employees, most of whom are focused exclusively on graphite advanced materials, making it one of the largest natural graphite-focused organizations in North America and the ideal partner for the project;
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The Property is notably sizable, with a total Measured and Indicated Resource of 65.5 million tonnes grading 17.2% Cg, and carries one of the highest grades of graphite ore globally with a Proven and Probable Reserve totalling 4.7 Mt grading 27.8% Cg (See Mason Graphite’s press release dated September 25, 2015). Mason Graphite received the governmental authorization for the Property, via the issuance of the Decree 608-2018 by the Qubec Government;
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NMG and Black Swan Graphene Inc. (“Black Swan”), a subsidiary of Mason Graphite, intend to enter into a non-binding letter of intent for the implementation of Black Swan’s graphene processing technology in NMG’s Demonstration Plant, which has a design throughput of 3.5 tonnes of ore per hour (tph), the equivalent nameplate production capacity of approximately 1,000 tonnes of graphite concentrate per annum, using NMG’s ore grading an average of 4.5% graphitic carbon, in order to establish a fully integrated facility from graphite ore to graphene finished products; and
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The entering into of the Option and JV Agreement is subject to the approval of the TSX Venture Exchange (the “TSX-V”) and the shareholders of Mason Graphite at a special meeting of shareholders of Mason Graphite to be called and expected to be held on or about the first week of July 2022.
Mr. Pierre Fitzgibbon, Qubec’s Minister of Economy and Innovation, commented: “The partnership announced today has the potential to propel Qubec's graphite industry on the world stage and consolidate its position as a leader in North America. I am proud to support these projects. By combining the strengths of the two most advanced projects in North America, both of which located in Qubec, we are solidifying our battery value chain. These projects contribute to our ambition to build an integrated value chain, from mining to recycling, and to position Qubec at the forefront of electrification.”
Mr. Fahad Al-Tamimi, Chairman of the Board of Directors of Mason Graphite and Mason Graphite’s second largest shareholder1, added: “I am delighted to see the creation of this alliance, which combines and leverages the best attributes of the North American graphite industry in support of the ambitious vision of the Government of Qubec. Today’s announcement is not only great for all stakeholders, but for the entire Province of Qubec and the world. Furthermore, the potential for Black Swan Graphene, a Mason Graphite subsidiary, to establish itself in NMG’s graphite processing facility in Qubec should greatly accelerate the path towards large scale graphene production and is sure to create considerable value for the shareholders of Mason Graphite.”
Mr. Eric Desaulniers, Founder, President and CEO of NMG concluded: “The Matawinie and the Lac Guret deposits are instrumental in establishing a strong, meaningful and resilient local supply of lithium-ion anode material to cater to the electric vehicle (“EV”) market expansion in the Western World and beyond. This transaction has the potential to strengthen our phased development approach and provide us with significant volumes, therefore indicating to our large prospective tier-1 customers that we have a robust and realistic growth strategy and the ambition of being their preferred supplier for the generation to come. Team Nouveau Monde and I are eager for the opportunity to help developing the Lac Guret asset into a world-class project.”
NMG’s Depth and Capabilities
NMG enjoys an impressive depth of personnel and has demonstrated commercialization capabilities, which are fundamental requirements in the industry. NMG currently employs nearly 100 full-time employees and dedicated experts focused on graphite advanced materials, including 7 PhDs, 3 MSc, and 22 engineers, totalling decades of experience in graphite production with leading operators. This unique profile makes NMG one of the largest natural graphite-focused organizations in North Americaand the ideal partner for the project.
The Lac Guret Graphite Property
The Property, located 285 kilometres north of Baie-Comeau, Qubec consists of 74 claims covering 4,000 ha (40 km2) and is easily accessible year-round by main logging roads via the highway 389.
In 2018, Mason Graphite received the governmental authorization for the project, via the issuance of the Decree 608-2018 by the Qubec Government. Under the Qubec Environment Quality Act, this governmental authorization is the main permit required prior to commencing construction activities. The Mushalakan Impact Benefit Agreement was signed in June 2017 with the First Nation Communityof Pessamit, located 60 kilometres west of Baie-Comeau. As part of the important work in the upcoming weeks, the Pessamit community and all local stakeholders will be met and consulted in the redesign process of the Property.
Considering the potential of the asset beyond the scope of production previously established and the rapidly evolving graphite market dynamics, NMG will undertake to publish an updated feasibility study on the Property based on graphite concentrate production of a minimum of 250,000 tonnes per annum, which is to be ascertained based on customer demand and technical & environmental possibilities.