Nouveau Monde Graphite (TSXV: NOU) is a major mover today, jumping 25% to $3.49 off the back of several major developments that were announced this morning with major partners.
The excitement began this morning when the company indicated it had secured an offtake agreement with General Motors along with a major equity investment. The automaker has agreed to purchase 18,000 tonnes per year of Nouveau’s Phase-2 active anode material output under an initial six year term, once full-scale production is achieved.
In terms of investment, an initial US$25 million will be provided by General Motors in the form of an equity investment, which is intended to support the advancement of the Matawinie Mine and Becancour Battery Material Plant. A further US$125 million will then be invested upon certain conditions being met. Notably, the battery material plant will be established in the same industrial park as General Motors’ C$600 million Ultium CAM plant that is currently under construction.
Nouveau is set to become a key cog in General Motors’ battery supply chain, with graphite mined at the Matawinie Mine to be processed at the Becancour battery materials plant, where it will be turned into active anode material for use in Ultium battery cells in General Motors’ electric vehicles.
Pricing under the arrangement will be based on future prevailing market prices, as well as a pricing mechanism that will support project financing and stable procurement for GM.
The investment meanwhile will see 12.5 million units, each containing one common share and one common share purchase warrant, at US$2.00 each under the first Tranche. An investor rights agreement will also be entered into that will see GM locked-up for 18 months, and assigned certain board nomination and anti-dilution rights.
An hour after the General Motors announcement, Nouveau Monde then disclosed that it had entered into a binding offtake arrangement with Panasonic Holdings, which is also for 18,000 tonnes per year of active cathode. That agreement, which is set for an initial seven year period, also saw Panasonic enter into an equity investment agreement, amounting to US$25 million. The investment is to occur under substantially the same terms as that of the General Motors investment.
And if that wasn’t enough, the company also secured further investment from Mitsui & Co, as well as Pallinghurst Bond Limited, which will be used to advance commercial operations. Mitsui has agreed to invest US$25 million under the same financing terms as that of General Motors and Panasonic, however their lockup will be subject to twelve months, while Pallinghurst will be investing US$12.5 million under the same terms, save for no lock-up conditions. Pallinghurst’s investment however will see the proceeds used to repurchase a convertible note issued to Pallinghurst in November 2022.
A final investment decision for the facilities meanwhile will see General Motors, Panasonic, and potential co-investors sink a further US$275 million into Nouveau.
Nouveau Monde Graphite last traded at $3.49 on the TSX.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
