CGF, Quebec investing US$50 million in Nouveau Monde Graphite
Nouveau Monde Graphite Inc. [NOU-TSXV, NMG-NYSE] has announced a US$50 million equity investment by Canada Growth Fund and the Government of Quebec via its Investissement Quebec (IQ) in the company to continue advancement and development towards commercial operations, subject to regulatory approvals.
As the company prepares for a final investment decision regarding the Phase-2 Matawinie Mine and Becancour Battery Material Plant in Quebec, the investment aims to facilitate progress on detailed engineering, orders of long-lead items and support critical path activities.
The shares advanced on the news, rising 4.37% or $0.08 to $1.91. The shares trade in a 52-week range of $4.14 and $1.70.
Nouveau Monde is an integrated company developing responsible mining and advanced manufacturing operations to supply the global economy with carbon-neutral active anode material to power EV and renewable energy storage systems.
Under the agreement, the company will issue 39.7 million common shares Canada Growth Fund and IQ at a price of US$1.26 per share. For each common share so subscribed, the company will issue one share purchase warrant to each of Canada Growth Fund and IQ. The warrant will entitle the holder to acquire one common share, from FID (final investment decision) to the date that is five years from the closing of the offering at a price of US$2.38 per common share, the same strike price as the warrants previously issued to General Motors Holdings LLC, a unit of General Motors Co. [GM-NYSE] and a unit of Panasonic Holdings Corp. and Mitsui & Co. in February, 2024.
In connection with the investment, Nouveau Monde will also enter into an investor rights agreement and registration rights agreement with each of Canada Growth Fund and IQ at closing. Under the agreements, Canada Growth Fund and IQ will be restricted from selling their respective securities until August 28, 2025. The investors will also be granted certain board nomination and anti-dilution rights.
The company is actively progressing toward the finalization of an updated feasibility study for its integrated Phase-2 Matawinie Mine and Becancour Battery Materials plant to optimize production parameters, engineering and cost projections; the updated results are expected early in the first quarter of 2025.
It said ongoing project financing activities for Phase 2 include expressions of interest for approximately $1.4 billion, consisting of potential lenders and, anchor customers and institutional equity investors.
The company is also seeking eligibility to a refundable investment tax credit from the Canadian government, estimated at about $350 million for the Phase-2 facilities.
Nouveau Monde’s Matawinie graphite mining project is located in Saint-Michel-des-Saints, Que., approximately 150 kilometres north of Montreal. The company recently signed an impact and benefits agreement with the Atikamekw First Nation of Manawan. “With this agreement, the Manawan Atikamekw give their consent to the Matawinie mining project, which aims to responsibly valorize graphite by Nouveau Monde, in a way that respects the environment and provides direct benefits to the First Nation.