Battery Materials – NMG Provides a Quarterly Update: Disciplined Execution Backed by Strong Integrated Team, Commercial Agreements with Anchor Customers and Favorable Market Conditions
- Accelerated engineering of Phase-2 facilities to update the results of the Company’s integrated ore-to-anode-material feasibility study in view of the specific requirements from Panasonic Energy and GM, CAPEX optimization, and other project planning developments, in preparation for FID.
- Preliminary work is ongoing at the Phase-2 Bécancour Battery Material Plant site in preparation for the launch of construction.
- Progress on the development of zero-emission equipment for the Matawinie Mine by Caterpillar as a result of direct involvement from respective technical and mining teams informing an integrated solution tailored to NMG’s site.
- Approval by the regulatory body of the powerline path set to connect the Matawinie Mine to the hydropower network.
- NMG was awarded a $500,000 research grant to advance the development of versatile next-generation active anode materials.
- Continued commercial engagement with tier-1 battery and EVs manufacturers for the balance (approximately 15%) of the Phase-2 Bécancour Battery Material Plant active anode material production.
- Improving market conditions exemplified by 9.9% year-to-date increase in natural graphite prices (Benchmark Mineral Intelligence, June 2024), increasing demand for anode materials in the Western World, announced 25% US tariff on Chinese imports, and sustained growth (20%) in global EV sales (Rho Motion, July 2024).
- Reappointment of the Directors and adoption of all resolutions submitted at the Company’s Annual General and Special Meeting of Shareholders.
- Period-end cash position of $73.9 million.
Nouveau Monde Graphite Inc. (“NMG“ or the “Company”) (NYSE: NMG, TSX.V: NOU) reports on its progress to bring the Phase-2 Matawinie Mine and Bécancour Battery Material Plant toward a final investment decision (“FID”), while planning a Phase-3 expansion via its Uatnan Mining Project and complementary value-added processing facilities. The Company’s multiyear offtake agreements with Anchor Customers Panasonic Energy Co., Ltd. (“Panasonic Energy”), a wholly owned subsidiary of Panasonic Holdings Corporation (“Panasonic”) (TYO: 6752), and General Motors Holdings LLC, a wholly owned subsidiary of General Motors Co. (collectively, “GM”) (NYSE:GM) (GM and Panasonic being collectively the “Anchor Customers”), combined with improved market dynamics and attractive long-term perspectives provide solid underpinnings for scaling up operations from its Phase-1 facilities to construction and commercial production.
Arne H Frandsen, Chair of NMG, declared:
The fundamentals of NMG’s business model continue to be reaffirmed by governments and manufacturers’ quest to secure resilient, local, and dependable supply chains for energy autonomy, national security, and decarbonization plans.
“NMG’s efforts are centered on crystallizing our position as North America’s first and largest fully integrated producer of natural graphite anode material and creating value for our shareholders and stakeholders at every stage.”
Eric Desaulniers, Founder, President, and CEO of NMG, stated:
Backing from our Anchor Customers, trade restriction from Western governments promoting onshoring and friendshoring of battery materials, plus a clear demand/supply deficit for anode material looming in North America create sustained tailwinds as we near FID for our Phase 2 and start assessing sites for our Phase-3 processing expansion.
“With nearly $75 million of cash position, Team Nouveau Monde is focused on the disciplined execution of our business strategy through updating of operational parameters of our integrated feasibility study, optimizing CAPEX and procurement, as well as adjusting our project financing structure to leverage tax credits, grants and debt/equity instruments.”
Path to Commercial Production: Phase 2
Using an integrated project team (“IPT”) model, the Company is preparing for the launch of the Phase-2 Matawinie Mine and Bécancour Battery Material Plant once minimum financing is reached. NMG’s in-house team and strategic consultants specializing in engineering, procurement, construction management, and project controls are working collaboratively to advance engineering, and finalize pre-construction deliverables (comprehensive construction sequence, schedule, contracting strategy, programs for health, safety, environment, and quality).
Updated cost projections reflecting the advancement in engineering, cost optimization, and construction planning are being prepared for the updated integrated feasibility study underway. Outputs will support project financing in view of FID. NMG continues to engage with governmental agencies, strategic investors, and lenders to secure a robust capital structure. Additionally, an external tax specialist firm has been tasked with optimizing the Phase-2 CAPEX eligibility for the new Canadian Investment Tax Credit for Clean Technology Manufacturing, which offers a refundable tax credit of up to 30% of eligible capital expenditures.
At the Phase-2 Bécancour Battery Material Plant site, preliminary works were carried out in recent months to complete tree clearing and the construction of an on-site road.
The Company is reporting progress on the development of zero-emission equipment for the Matawinie Mine on the basis of strategic agreements with Caterpillar Inc. (“Caterpillar”). Site visits, prototypes demonstrations and modeling solutions inform dynamically NMG’s electrification plans and the development of an integrated tailored solution for the Matawinie Mine covering the fleet, charging infrastructure and operating site management. In addition, the final path for the dedicated powerline set to connect the mining site to Hydro-Québec’s hydropower network for enabling the full electrification of the Matawinie Mine was reviewed and approved by the regulatory body.
Business Development & Market Perspectives
In addition to offtake agreements signed with Panasonic Energy and GM, NMG is actively engaged with other tier-1 potential customers for offtake agreement(s) on the balance of its Phase-2 active anode material production accompanied by strategic investments. The Company’s Phase-1 operations support technical marketing and product qualification efforts with said manufacturers.
NMG is also preparing the following commercial phase with its targeted Phase-3 expansion. In preparation for the Uatnan Mining Project development, an initial technical and economic planning study covering camp and logistics requirements is currently being carried out by a local engineering firm to inform next steps. The Company has also initiated the assessment of industrial sites for the establishment of battery material plants to refine the future Uatnan graphite concentrate production, including in Québec, Europe, Middle East and the U.S., close to its potential customer base.
Following a period of pressured market conditions, Q2-2024 generated a 9.9% year-to-date increase in natural graphite pricing according to Benchmark Mineral Intelligence’s index (June 2024). The anode material market is experiencing a steady rise in demand, matched by incremental expansions in production capacities, especially outside of China. Long-term growth is bolstered by investments in ex-China natural anode material capacity and recently announced reinstatement of a 25% U.S. tariff on Chinese natural graphite imports starting in 2026.
Looking ahead, a sustained deficit in active anode material supply is anticipated to drive price higher, with the market expected to enter a prolonged deficit phase from 2029 onward. Demand for active anode materials is projected to reach approximately 1.37 million tonnes in 2024, a 32% increase from 2023 (Benchmark Mineral Intelligence, July 2024). The market is largely driven by EVs, and secondarily by energy storage systems and portable electronics.
Despite signs of a potential slowdown in EV adoption, the industry, particularly for major automakers like Hyundai/Kia, Toyota and Ford, showed robust growth with sales surging between 56% and 86% year-over-year (Bloomberg, May 2024). In the first half of 2024, global EV sales reached 7 million units, marking a 20% increase in comparison with the same period last year (Rho Motion, July 2024).
Market conditions remain favorable to NMG’s business strategy, especially with long-term incentives and trade instruments from Western governments targeting onshoring and friendshoring of battery materials.
Corporate Matters
In June 2024, NMG was awarded a $500,000 research grant from the Québec Ministry of Natural Resources to develop a versatile next-generation active anode material that meets the highest performance standards without sacrificing production yield. This grant directly supports NMG’s research and development portfolio to refine its line of specialty products targeting innovation, reduced environmental footprint, and increased competitiveness.
At the Company’s Annual General and Special Meeting of Shareholders, shareholders reappointed each of the eight nominees as Directors and adopted all other resolutions submitted for their approval. The meeting was complemented with a corporate presentation by NMG’s executive team providing an update on the Company’s key projects, commercial engagement, and growth plan.
For the twelve-month rolling period ended June 30, 2024, NMG reported a total recordable injury frequency rate of 2.57 and severity rate of 0 at the Company’s facilities. There were no environmental incidents during this period. The period-end cash position is $73.9 million.
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Battery Materials – NMG Provides a Quarterly Update: Disciplined Execution Backed by Strong Integrated Team, Commercial Agreements with Anchor Customers and Favorable Market Conditions, source
