Northern Graphite eliminates US$23.6 million debt in Sprott transaction
Northern Graphite Corp. [NGC-TSXV; NGPHF-OTCQB] said Friday it has strengthened its financial position by closing a previously announced agreement to restructure its secured debt, stream and royalty financing arrangements with funds managed by Sprott Streaming and Royalty Corp.
Under the terms of the agreement, all amounts owned to Sprott Streaming under its senior secured loan to the company, consisting of approximately US$16 million in principal amount and approximately US$7.6 million in accrued interest, have been fully satisfied through the issuance of 12.5 million common shares of the company to Sprott Streaming. As a result, Sprott Streaming has increased its interest in the company to 9.9% of the basic shares outstanding, becoming Northern Graphite’s largest shareholder, and through amendments to the streaming agreement relating to Northern’s Okanjande project in Namibia.
The amended streamlining agreement removes the 350,000 tonnes of graphite concentrate cap on production and option and option to then convert the stream to a 1.0% royalty, such that the streaming agreement now covers all future production from Okanjande.
The transaction also provides for priority payment to Sprott Streaming from a portion of the company’s proceeds from certain future equity financings and IP licensing agreements for all accrued and unpaid royalty amounts owed as of this date, plus interest relating to the company’s Lac des Iles mine, in the approximate amount of US$4.7 milllion, until such amount has been paid.
Northern Graphite shares were unchanged at $0.06 on Friday and trade in a 52-week range of 38 cents and $0.055.
“By eliminating our senior secured debt and associated accrued interest, we have significantly strengthened our balance sheet, improved our financial flexibility and positioned the company to move forward with greater clarity and momentum,’’ said Northern Graphite CEO Hugues Jacqueman. “This arrangement now enables us to focus on the next phase of our strategy which is to restart the Lac de Iles and Okanjande mines and to develop the capacity to produce Battery Anode Material.’’
Northern Graphite’s assets include the Lac des Iles mine in Quebec, which the company plans to restart to meet demand from industrial customers and coming demand from North American battery makers. The company also owns the large scale, advanced stage Bissett Creek graphite project in Ontario and the fully permitted Okanjande graphite mine in Namibia, which is currently on care and maintenance, representing an opportunity to increase graphite production at a lower cost and with a shorter time to market than most competing projects.
When the company released its second quarter results on September 1, 2026, it said there was no active mining at the Lac de Iles mine and plant during the quarter as the company is awaiting authorization for its Phase 1.0 pit expansion plan from the Quebec environmental authorities which was subsequently granted on July 9, 2026. Critical maintenance work to prepare the plant for the planned 2026 pit expansion is well advanced.
Subsequent to the quarter end, the company announced a delay in restarting Lac des Iles as the company addresses issues relating to its mining lease, financial constraints and current market conditions.