NMG Announces US$50-Million Equity Investment from Canada Growth Fund and the Government of Québec to Support its Phase 2 Ore-to-Battery-Material Graphite Operations
- US$50-million subscription into NMG marking the first direct investment from Canada Growth Fund and the renewed support from the Government of Québec via its agent Investissement Québec
- Investment to support the advancement of NMG’s Phase-2 Matawinie Mine and Bécancour Battery Material Plant through detailed engineering and orders of long-lead items
- NMG’s integrated Phase-2 production of active anode material is destined to the North American battery and EV markets
- NMG’s business model and recognized ESG profile align with the critical mineral strategy and battery value chain actively promoted by both levels of governments
December 17, 2024 08:00 AM Eastern Standard Time
MONTRÉAL–(BUSINESS WIRE)–NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES
Nouveau Monde Graphite Inc. (“NMG” or the “Company”) (NYSE: NMG, TSX.V: NOU) announces an equity investment by Canada Growth Fund Inc. (“CGF”) and the Government of Québec, via its agent Investissement Québec (“IQ”), in NMG for an aggregate amount of US$50 million to continue advancing its development toward commercial operations, subject to regulatory approvals. As the Company prepares for a final investment decision (“FID”) regarding its Phase-2 Matawinie Mine and Bécancour Battery Material Plant, the investment is namely set to enable progress on detailed engineering, orders of key long-lead items and support to critical-path activities.
Eric Desaulniers, Founder, President, and CEO of NMG, stated:
As a project developer, NMG requires credible financial partners to share risks and unlock value in this strategic and geopolitically important sector.
“Rounding up 2024 marked by significant progress in our business plan, we are setting our sights on the remaining milestones to reach FID. This investment by the Canada Growth Fund and the Government of Québec will enable our team to make tangible advancements and place strategic orders in preparation for our project execution. We are committed to delivering high-performing and reliable active anode materials to the North American battery and electric vehicle (“EV”) markets, contributing to a local, sustainable and reliable supply chain.”
Patrick Charbonneau, President and CEO of Canada Growth Fund Investment Management Inc.(“CGFIM”),said:
Investors and policymakers alike recognize the strategic importance of securing a stable supply of critical minerals, which are indispensable for essential for high-tech industries, from defense to renewable energy and batteries.
“CGF is pleased to invest in NMG and looks forward to supporting the Company in its journey to create the largest fully integrated natural graphite production facility in North America.”
The reiterated support of IQ, an agent of the Government of Québec, and the addition of CGF, a C$15-billion independent and arm’s length public fund of the Canadian federal government, to NMG’s large shareholders strengthen the Company’s backing of key institutional investors and provide a favorable roadmap to project financing upon a positive FID. CGF has a mandate to capitalize on Canada’s abundance of natural resources and strengthen critical supply chains to support the country’s long-term prosperity. CGFIM, a wholly owned subsidiary of PSP Investments, acts as the independent and exclusive investment manager of CGF.
Investment into NMG
Each of CGF and IQ has agreed to subscribe for common shares in the capital of NMG (the “Common Shares”), subject to certain conditions, for aggregate gross proceeds of US$50 million (the “Offering”). Pursuant to the Offering, the Company will issue 39,682,538 Common Shares at a price of US$1.26 per Common Share.
For each Common Share so subscribed, the Company will issue one share purchase warrant (the “Warrants”) to each of CGF and IQ. The Warrant will entitle the holder thereof to acquire one Common Share, from FID to the date that is five years from the closing of the Offering, at a price per Common Share of US$2.38 – the same strike price than the warrants previously issued to General Motors Holdings LLC, a wholly owned subsidiary of General Motors Co. (collectively, “GM”) (NYSE: GM), Panasonic Energy Co., Ltd. (“Panasonic Energy”), a wholly owned subsidiary of Panasonic Holdings Corporation (“Panasonic”) (TYO: 6752), and Mitsui & Co., Ltd. (“Mitsui”) (TYO: 8031) in February 2024. The exercise of the Warrants is subject to certain ownership limitations.
In connection with the investment, NMG will also enter into an investor rights agreement (collectively, the “Investor Rights Agreements”) and a registration rights agreement with each of CGF and IQ at the closing of their investment. Pursuant to the Investor Rights Agreements, each of CGF and IQ will be restricted from selling its respective securities until August 28, 2025. The Investor Rights Agreements also provide each of CGF and IQ with certain rights relating to its investment in NMG, including namely certain board nomination and anti-dilution rights.
The Common Shares and the Warrants will be subject to a four-month hold period under Canadian securities laws. CGF’s and IQ’s investments are expected to close concurrently on or about December 19, 2024. Closing of the investments is subject to certain standard conditions and regulatory approvals, including the approval of the TSX Venture Exchange (the “TSXV”) and the authorization of the New York Stock Exchange.
Continued Progress Toward FID
The Company is actively progressing toward the finalization of an updated feasibility study for its integrated Phase-2 operations to optimize production parameters, engineering, and cost projections; the updated results are expected early in Q1-2025. Proceeds from the contemplated investment are destined to advance detailed and equipment-specific engineering with procurement of some long-lead items, support Phase-2 critical-path activities as well as to cover general and administrative expenses, working capital, and financing costs.
NMG continues the preparation to FID via the signature of an Impact and Benefit Agreement with the Atikamekw First Nation of Manawan for the Matawinie Mine, commercial engagement with anchor and potential customers as well as project financing planning activities with potential lenders, anchor customers and institutional equity investors.
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NMG Announces US$50-Million Equity Investment from Canada Growth Fund and the Government of Québec to Support its Phase 2 Ore-to-Battery-Material Graphite Operations, source
