NextSource Materials Announces First Production of SuperFlake® Graphite at Molo Mine in Madagascar
NextSource Materials Announces First Production of SuperFlake®
Graphite at Molo Mine in Madagascar
NEWS RELEASE – TORONTO, June 22, 2023
NextSource Materials Inc. (TSX:NEXT) (OTCQB:NSRCF) (“NextSource” or the “Company”) is pleased
to announce the first production of SuperFlake® graphite concentrate at its Molo mine in Madagascar.
President and CEO, Craig Scherba, commented:
“First production of our SuperFlake® graphite is a significant achievement for NextSource and a
testament to the dedication and hard work of our commissioning and operations teams, our employees
and contractors, as well as the ongoing support that we have received from the local community and
government. As we ramp up the production stage of operations, the Company is in the enviable position
of transitioning into a significant and sustainable global producer of high -quality graphite and anode
material just as demand for their use in lithium-ion batteries is growing exponentially."
As part of the commissioning and optimization of the processing plant, the commissioning sequence was
prioritized for initial production of coarse flake concentrate, with the first tonne of production consisting of
+48 mesh (jumbo size) SuperFlake® graphite.
Since initiation of plant commissioning on March 23, 2023, the commissioning and operations teams have
progressed methodically through debottlenecking and optimization activities. The operations team will
now shift their focus to ramping up the plant throughput to its nameplate capacity of 17,000 t onnes per
annum.
The Company expects to sell all the flake graphite produced at the Molo Graphite Mine to key customers
under existing offtake agreements, which includes Germany’s thyssenkrupp Materials Trading GmbH and
the Company’s Japanese technical partner, whom is the main supplier of value-added graphite to Japan’s
Molo mine workforce alongside first tonne of SuperFlake® graphite concentrate
largest anode processor that in turn supplies multiple Japanese and international OEMs with graphite
anode material.
The Com pany continues to be engaged in advanced discussions with s everal major EV companies
(OEMs) and has received requests for multi-tonne samples of battery anode material as part of the OEMs
qualification process. As such, t he Company will begin send ing flake graphite qualifying material to its
Battery Anode Facility (BAF) technical partners for conversion into coated, spheronized, purified graphite
(“CSPG”), which is the final form of anode material that is assembled along with cathode material into
finished lithium-ion batteries used in electric vehicle (“EV”) applications.
Mauritius Battery Anode Facility and Global BAF Strategy
The Company announced on February 28, 2023 its strategy for the staged buildout of a series of BAFs in
key geographic locations. The BAFs are value-added processing facilities that convert flake graphite into
CSPG.
BAF Strategy Highlights:
• Plans to construct multiple BAFs capable of producing CSPG anode material for use in lithium -ion
batteries for EV applications in key jurisdictions . The BAF designs will leverage the Company’s
exclusive partnership with two leading value-added graphite processors and use their proprietary and
well-established graphite anode processing technology, which currently produce s CSPG for the
supply chains of major OEMs, including Tesla and Toyota.
• The first BAF will be in Mauritius (the “Mauritius BAF”), which was selected due to its proximity to
the Molo Graphite Mine in Madagascar and its position on strategic shipping routes to Asian
markets.
• A long-term industrial lease has been signed to build the Mauritius BAF within an exisiting industrial
facility in Port Louis, Mauritius. The BAF s ite location is also classified as an Industrial Freeport,
with a 3% corporate tax rate and 0% VAT.
• A technical study for the Mauritius BAF with a n initial production capacity of 3,600 tpa (Line 1) of
CSPG (the “Mauritius BAF Technical Study”) dated February 28, 2023 estimated initial capital costs
and working capital investments of US$32.8 million and an nual revenues at US$33.7 million with
an EBITDA of US$13.2 million. The resulting post -tax economic results demonstrated an NPV of
US$106.9 million using an 8% discount rate, an IRR of 42.7% and a payback of 2.2 years.
• Adding 3 additional l ines (Lines 2,3,4) to the Mauritius BAF for a total capacity of 14,400 tpa of
CSPG demonstrated a t otal post-tax NPV8% of US$439.7m, incremental capex US$74m, IRR of
45.8%
• Subject to obtaining necessary funding, completion of the front-end engineering and design (FEED)
study, and completion of the environmental and social impact assessment (ESIA) process, the
Company is targeting the start of a 12-month construction process in Q3 2023 resulting in potential
initial production at the Mauritius BAF in Q3 2024.
• Evaluation of the potential construction of a BAF in North America and initiation of the application
process to access various financial loans and grants offered under C anadian federal and provincial
programs and under the U.S. Inflation Reduction Act.
• Evaluation of the potential construction of a BAF in the United Kingdom (UK) and initiation of the
application process to access various financial loans and grants offered under the UK Government
Automotive Transformation Fund.
• Evaluation of the potential construction of a BAF in the European Union.
• Evaluation and potential cons truction of an artificial graphite (AG) production facility, which would
enable the Company to supply AG anode material along with natural flake-based anode material.
ABOUT NEXTSOURCE MATERIALS INC.
NextSource Materials Inc. is a battery materials development company based in Toronto, Canada that is
intent on becoming a vertically integrated global supplier of battery materials through the mining and
value-added processing of graphite and other minerals.
The Company’s Molo graphite project in Madagascar is one of the largest known and highest -quality
graphite resources globally, and the only one with SuperFlake® graphite. The Molo mine has begun
production, with Phase 1 mine operations currently bein g optimized to reach its nameplate production
capacity of 17,000 tpa of graphite concentrate.
The Company is also developing a significant downstream graphite value-add business through the
staged rollout of Battery Anode Facilities capable of large -scale production of coated , spheronized and
purified graphite for direct delivery to battery and automotive customers, outside of existing Asian supply
chains, in a fully transparent and traceable manner. The first of its Battery Anode Facilities will be located
in Mauritius with initial production targeted in Q3 2024.
NextSource Materials is listed on the Toronto Stock Exchange (TSX) under the symbol “NEXT” and on
the OTCQB under the symbol “NSRCF".
For further information about NextSource visit our website at www.nextsourcematerials.com or contact
us at +1.416.364.4911 or email Brent Nykoliation, Executive Vice President at
[email protected] or Craig Scherba, President & CEO
Safe Harbour: This press release contains statements that may constitute “forward -looking information” or “forward -looking
statements” within the meaning of applicable Canadian and United States securities legislation. Readers are cautioned not to place
undue reliance on forward -looking information or statements. Forward looking statements and information are frequently
characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “potential”, “possible” and other
similar words, or statements that certain events or conditions “may”, “will”, “could”, or “should” occur. Forward -looking statements
include any statements regarding, among others, timing of, and completion of, commissioning the processing plant, construction of
the Solar Hybrid Battery System, and commissioning of the Molo mine, timing of construction and completion of the Mauritius BAF
and proposed timing of future locations of additional BAFs, timing and completion of front -end engineering and design and ESIA
permitting, the economic results of the BAF Technical Study including capital costs estimates, operating costs estimates, payback,
NPV, IRR, production, sales pricing and working capital estimates, the construction and potential expansion of the BAFs, expansion
plans, as well as the Company’s intent on becoming a fully int egrated global supplier of critical battery and technology materials.
These statements are based on current expectations, estimates and assumptions that involve several risks, which could cause
actual results to vary and, in some instances, to differ materially from those anticipated by the Company and described in th e
forward-looking statements contained in this press release . No assurance can be given that any of the events anticipated by the
forward-looking statements will transpire or occur or, if any of them do so, what benefits the Company will derive there from. The
forward-looking statements contained in this news release are made as at the date of this news release and the Company does not
undertake any obligation to update publicly or to revise any of the forward-looking statements, whether because of new information,
future events or otherwise, except as may be required by applicable securities laws. Although the forward-looking statements
contained in this news release are based on what management believes are reasonable assumptions, the Company cannot assure
investors that actual results will be consistent with them. These forward -looking statements are made a s of the date of this news
release and are expressly qualified in their entirety by this cautionary statement. Subject to applicable securities laws, the Company
does not assume any obligation to update or revise the forward -looking statements contained he rein to reflect events or
circumstances occurring after the date of this news release.