Nouveau Monde Graphite (NMG) has secured an equity investment totalling $50m to advance the Phase-2 Matawinie graphite mine and Bécancour battery material plant in Canada.
The funding, provided by the Canada Growth Fund (CGF) and the Québec government through its agent, Investissement Québec (IQ), will support NMG’s transition towards commercial operations.
NMG is preparing for a final investment decision (FID) on the company’s Phase-2 ore-to-battery-material graphite operations.
The investment will fund detailed engineering, procurement of long-lead equipment, and critical-path activities.
Under the agreement, CGF and IQ will subscribe for 39.7 million NMG common shares at $1.26 per share.
Each share will come with a warrant entitling the holder to purchase one additional share at $2.38. This is the same strike price as warrants issued earlier this year to General Motors Holdings, Panasonic Energy, and Mitsui & Co.
The warrants are exercisable from the FID date up to five years after the offering closes, with certain ownership restrictions.
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.”
NMG will also sign an investor rights agreement and a registration rights agreement with each of CGF and IQ at the closing of their investment.
This agreement includes additional terms, such as restrictions preventing CGF and IQ from selling their shares before August 2025 and provisions for board nominations and anti-dilution rights.
Besides, the common shares and warrants will be subject to a four-month hold period under Canadian securities regulations.
Closing of the investment is scheduled for 19 December 2024, subject to conditions including regulatory approvals from the TSX Venture Exchange and the New York Stock Exchange.
NMG is nearing completion of an updated feasibility study for its Phase-2 operations, with results expected in early Q1 2025.
In preparation for the FID, NMG has signed an impact and benefit agreement with the Atikamekw First Nation of Manawan for the Matawinie mine. The company is also continuing commercial negotiations with anchor customers and potential lenders.
