Nouveau Monde Graphite Inc. announced a significant investment of US$50 million from Canada Growth Fund Inc. (“CGF”) and the Government of Québec, represented by Investissement Québec (“IQ”), aimed at propelling NMG toward commercial operations. This funding, pending regulatory approvals, will aid NMG in advancing critical steps for the development of Phase 2 of its Matawinie mine and Bécancour battery materials plant. These steps include detailed engineering, the ordering of long-lead equipment, and other key activities essential to the project’s progression.
Strategic Development with Key Financial Partners
Eric Desaulniers, Founder, President, and CEO of NMG, emphasized the importance of strategic partnerships to advance the company’s objectives. He said, “As a project developer, NMG needs credible financial partners to share risks and generate value in this strategic and geopolitically important sector. This investment from CGF and the Government of Québec is a crucial step forward, allowing us to make tangible progress and secure necessary equipment for our project. We remain committed to providing high-performance and reliable active anode material for the North American battery and electric vehicle markets, contributing to a local, sustainable, and dependable supply chain.”
The funding not only bolsters NMG’s progress but also underlines the importance of critical minerals for high-tech industries, from renewable energy to defense and batteries. Patrick Charbonneau, President and CEO of CGF Investment Management Inc. (“CGFIM”), expressed that CGF is pleased to support NMG’s mission and looks forward to its role in helping create North America’s largest fully integrated natural graphite production facility.
Strengthening Support with Institutional Investors
The continued backing of IQ and the inclusion of CGF, a major player in Canada’s resource development sector, adds significant credibility to NMG’s financial support network. CGF’s mandate is to enhance Canada’s natural resources and strengthen supply chains, ensuring the country’s long-term prosperity. CGFIM, a subsidiary of PSP Investments, exclusively manages CGF’s investments.
This investment also solidifies NMG’s position with institutional investors, enhancing the company’s ability to secure additional financing in the future. CGF’s involvement is expected to provide a favorable roadmap as NMG approaches the Final Investment Decision (FID) for Phase 2 of the Matawinie project.
Investment Details and Share Offering
Under the terms of the investment, CGF and IQ will purchase a total of 39,682,538 common shares in NMG at a price of US$1.26 per share, generating gross proceeds of US$50 million. Each purchased share will be accompanied by one share purchase warrant, which entitles CGF and IQ to acquire one additional share at a price of US$2.38 per share, exercisable up to five years after the final investment decision. This exercise price aligns with the warrants issued to key partners such as General Motors Holdings LLC, Panasonic Energy Co., Ltd., and Mitsui & Co., Ltd. in February 2024.
The investment also includes an investor rights agreement, which restricts CGF and IQ from selling their securities until August 28, 2025. These agreements grant CGF and IQ certain rights, including board nomination rights and anti-dilution protections.
NMG Secures US$50M Investment for Phase 2 of Graphite Operations
The investment will close around December 19, 2024, subject to customary conditions and regulatory approvals, including clearance from the TSX Venture Exchange and the New York Stock Exchange. The common shares and warrants will be subject to a four-month hold period under Canadian securities laws.
Advancing Phase 2 and Ongoing Feasibility Studies
NMG continues to make significant strides toward completing an updated feasibility study for Phase 2 of its operations. This study will optimize production parameters, engineering plans, and cost projections, with results expected in early 2025. The proceeds from this investment will be directed toward advancing engineering efforts, securing long-lead items, supporting critical project activities, and covering general administrative expenses, working capital, and financing costs.
As part of its preparations for the final investment decision, NMG has signed an Impact and Benefits Agreement with the Atikamekw First Nation of Manawan for the Matawinie mine. The company is also engaging with anchor clients and potential partners while planning project financing with lenders, institutional equity investors, and other stakeholders.
Looking Ahead: Path to Commercialization
NMG’s advancement toward Phase 2 is a crucial step in establishing a vertically integrated, sustainable supply chain for North America’s growing electric vehicle and battery markets. By leveraging its access to abundant natural graphite resources and utilizing innovative processing methods, NMG aims to meet the rising demand for critical materials in the clean energy and battery storage sectors.
The partnership with CGF and IQ reinforces NMG’s long-term strategy of creating a reliable, local supply of graphite materials that will play a significant role in shaping the future of North America’s energy and transportation infrastructure. With strong institutional backing and ongoing strategic partnerships, NMG is well-positioned to execute its plans and meet its ambitious goals.
