Nouveau Monde Graphite (NMG) has announced a $50m (C$71.64m) equity investment from Canada Growth Fund (CGF) and the Government of Québec, through Investissement Québec (IQ), to support its phase two ore-to-battery-material graphite operations.
This investment aims to facilitate the progress of NMG’s detailed engineering and critical path activities as the company approaches an FID.
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It will help advance NMG’s phase two Matawinie Mine and Bécancour Battery Material Plant, enable the procurement of key long-lead items and support necessary activities.
The investment will also support detailed engineering, procurement and critical-path activities, as well as cover general expenses and financing costs.
NMG is preparing for FID by finalising an updated feasibility study for its phase two operations, expected early in the first quarter of 2025.
NMG founder president and CEO Eric Desaulniers said: “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.
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By GlobalData“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 markets, contributing to a local, sustainable and reliable supply chain.”
The backing from IQ and the addition of CGF, a C$15bn public fund, strengthens NMG’s institutional investor support and provides a favourable path to project financing upon a positive FID.
Both CGF and IQ have agreed to subscribe for common shares in NMG, with the offering set to generate gross proceeds of $50m.
NMG will issue 39,682,538 common shares at $1.26 per share. Each share will include a warrant, allowing the holder to acquire an additional share at $2.38, subject to certain ownership limitations.
The common shares and warrants will be subject to a four-month hold period under Canadian securities laws.
This strike price aligns with warrants previously issued to General Motors, Panasonic Energy and Mitsui in February 2024.
NMG will enter into investor rights and registration rights agreements with CGF and IQ, restricting the sale of securities until 28 August 2025. These agreements grant CGF and IQ certain board nomination and anti-dilution rights.
CGFIM president and CEO Patrick Charbonneau said: “Investors and policymakers alike recognise the strategic importance of securing a stable supply of critical minerals, which are indispensable and essential for high-tech industries, from defence 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.”
NMG is also working on an Impact and Benefit Agreement with the Atikamekw First Nation of Manawan and engaging with potential customers and lenders.
The investments from CGF and IQ are expected to close on or about 19 December 2024, pending standard conditions and regulatory approvals from the TSX Venture Exchange and the New York Stock Exchange.
