NextSource Materials Announces Updated Feasibility Study Results for Molo Mine Expansion to 150k tpa of SuperFlake® Graphite Concentrate
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NextSource Materials Announces Updated Feasibility Study Results
for Molo Mine Expansion to 150k tpa of SuperFlake® Graphite Concentrate
NEWS RELEASE – TORONTO, July 27, 2026
NextSource Materials Inc. (TSX:NEXT) (OTCQB:NSRCF) (“NextSource” or “the Company”) is
pleased to announce the positive results of an updated Technical Feasibility Study (“FS”) for a Phase
2 mine expansion of its Molo Graphite Mine Project in southern Madagascar (the “Molo Mine”).
The FS considered a staged expansion beyond the existing Phase 1 mining and processing
operation to reach a total capacity of 150,000 tonnes per annum ("tpa") of flake graphite concentrate
over a 37-year life of mine (“LOM”). The FS estimates Phase 2 expansion capital costs of US$290.8
million, and financed in stages, with a pre -tax Net Present Value (“NPV”) (8% discount rate) of
US$402.5 million and a nominal pre-tax Internal Rate of Return (“IRR”) of 21.0% (real pre-tax IRR of
18.5%).
The FS builds on the findings from previous technical reports and prior studies and assumes the
construction of three new 50,000 tpa processing modules in two stages, adjacent to the current
Phase 1 processing plant, and using the same fully modular construction approach. The fully modular
approach is expected to greatly reduce build time, associated costs and development risks in relation
to conventional mine construction.
The FS includes the procurement of all mining equipment, and the full costs of off -site modular
fabrication and assembly, factory acceptance testing, module disassembly, shipping, plant
infrastructure construction, on-site module re-assembly, commissioning, project contingencies, and
working capital. The capital and operating costs estimates are prepared in line with a Class 3
estimate as per the American Association of Cost Engineers (“AACE”) classification and a target
accuracy of -15 to +25% at an 80% confidence level.
Hanré Rossouw, President and CEO of NextSource, commented,
“The updated and optimized FS announced today confirms the Molo Mine’s ability to be expanded
in stages to a larger -scale operation of global significance to meet the robust market demand for
flake graphite, particularly for use in electric vehicle batteri es. This is especially timely given the
recent announcement of the progress on our Battery Anode Facility in the UAE. A staged expansion
of this magnitude will position NextSource as a major global supplier and underpins our vertical
integration strategy to offer an ample and secure supply of graphite flake and battery anode material,
enabling direct supply to the electric vehicle battery market. In addition, the staged approach set out
in the updated Feasibility Study reduces operating risk, lowers financi ng costs and accelerates
revenue while providing flexibility to respond to market demand.”
The FS’s phased approach to 150,000 tpa was developed based on its offtake agreement with
Mitsubishi Chemical Group for purified graphite and spheronized and purified graphite (“SPG”) from
NextSource’s planned Battery Anode Facility (“BAF”) in the United A rab Emirates (“UAE”), and
ongoing discussions with automotive manufacturers (“OEMs”) and battery anode offtake partners on
the expected demand for flake graphite.
The Company has not yet made a production decision in respect of the first phase of the expansion
to 150,000 tpa and discussions with offtakers and other potential strategic partners to determine the
timing of a mine expansion are ongoing.
The FS was prepared by Stantec Consulting International Ltd. (“Stantec”), an independent
engineering and consulting firm specializing in the mining and processing of commodities and battery
materials.
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Stantec has been supported by the following consultants and qualified persons: Keith Wilson, Martin
Maloney, Damian Pianta, Jeremy Tape, Dion Deetlefs, Greg Gold (Stantec), Philip John Hancox and
Desmond Subramani (Caracle Creek International Consulting (Pty.) Ltd.),
Oliver Peters (Metpro Management Inc.), Clive Brown (Bara Consulting Ltd.), Andreas Savvas
(Epoch Resources (Pty) Ltd.), and Alkie Marais (Geostratum (Pty) Ltd.).
RESULTS SUMMARY
The following summary highlights the financial metrics provided in the FS:
Description Feasibility
Study
Economic Highlights
Pre-tax NPV (8% discount rate)(1) US$402.5 million
Post-tax NPV (8% discount rate)(1) US$348.4 million
Pre-tax Nominal IRR(1) 21.0%
Post-tax Nominal IRR(1) 20.0%
Payback Period(2) 7.2 years
Project Capital Expenditure (including a contingency of $32.3 million)(3) (9) US$290.8 million
Sustaining Capital Expenditure and Closure Costs(9) US$72.2 million
Minesite Operating Cost EXW (per tonne of concentrate) (9) US$419
Total Cash Cost FOB (per tonne of concentrate)(4) (9) US$650
All-in Sustaining Cost FOB (per tonne of concentrate)(4) US$665
LOM Weighted Average Basket Price of SuperFlake® graphite concentrate
(US$/tonne)(5) US$1,138
Life of Mine (“LOM”)(6) 37 years
Operational Highlights
Waste Mined: Total (Mt) 56.3
Ore Mined: Total (Mt)(7) 82.6
Ore Mined: Steady-State (Mtpa)(7) 2.5
Average ROM Grade: Cg (%) 6.27%
Strip Ratio: Average (tw:to) 0.68:1
Recovery: Cg (% wt:wt) 92.0%
Mass Yield to SuperFlake® Concentrate (% wt:wt) 5.9%
SuperFlake® Concentrate Produced: Total (Mt) 4.9
SuperFlake® Concentrate Produced: Steady-State (ktpa)(8) 150
SuperFlake® Concentrate Grade: Cg (%) 97.0%
Notes:
(1) Assumes Project is financed with 100% equity. Unless otherwise noted, all monetary figures presented throughout this press re lease are expressed in real (unless
otherwise stated) US dollars (USD) as of 1 April 2026. No above-inflationary cost escalations have been applied.
(2) Based on cumulative undiscounted free cash flows associated with the Expansion Project as measured from the date of first concentrate production.
(3) Project capital costs includes process equipment, civil & infrastructure, mining, buildings, electrical infrastructure, project & construction serv ices. Includes capitalized
operating costs. Excludes sustaining capital and closure costs.
(4) Assumes all concentrate will be sold on a FOB basis at the Port of Tulear, Madagascar.
(5) Based on the weighted average prices of the various size fractions of SuperFlake® concentrate, as informed by Benchmark Mineral Intelligence and includes a premium
associated with an above 94%-95% concentrate grade. Also assumes any product that is required to be sold into Madagascar will be at the same price.
(6) Life of mine is measured in terms of actual operating years, where the mined production increases over the first 5 years as modules are commissioned, and then runs
at a nominal rate of 2.5M tpa of ROM for a further ~32 years, with a 3 year tail at the end of the mine life.
(7) Assumes a Reserve cut-off grade of 3% Cg has been applied, with all material below this cut-off grade treated as waste. Over the life of the mine, 2,520 kt (4.5% of the
total ore tonnes in the ROM production schedule) of inferred material above this cut-off has been included in the life of mine production schedule. The sensitivity analysis
section of the FS considers the impact of excluding the inferred resource from the LOM production schedule.
(8) LOM average capacity consists of 150,000 tpa to cover the variability of feed grade and product distribution.
(9) Non-GAAP measure. See “Non-GAAP Measures” below.
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CAPITAL COST SUMMARY
Metric Total (US $’000)
Direct Capital Costs 183,270
Operating Equipment & Consumables 70,630
Infrastructure 68,447
Services 44,193
Indirect Capital Costs 107,518
Indirect 42,753
Capitalized Operating Costs 32,487
Contingency 32,278
Total: Project CAPEX(1) 290,788
Notes:
(1) Excludes sustaining capital and closure costs.
OPERATING COST SUMMARY
Based on discussions with offtakers, their preference is to purchase Molo graphite concentrate at the
local Madagascar port at free on board (“FOB”) East Africa prices. As such, operating costs (“OPEX”)
include the all-in FOB cost to deliver the graphite concentrate to the local port of Tulear.
Sub-Activity LOM Total (US$ '000) Unit Cost (US$ / t
ROM)
Unit Cost
(US$ / t concentrate)
Phase 1 OPEX 15,880 0.19 3.24
Mining 464,990 5.63 94.75
Tailings 116,260 1.41 23.69
Processing 636,220 7.70 129.63
Infrastructure 521,250 6.31 106.20
Site G&A 300,600 3.64 61.24
Sub-Total: Site OPEX Cost 2,055,180 24.89 418.76
Selling Costs 652,930 7.91 133.04
Royalties 483.09 5.85 98.43
Sub-Total: Site Cash Cost(1) 3,191,210 38.64 650.23
Notes:.
(1) Non-GAAP measure. See “Non-GAAP Measures” below
MINERAL RESOURCE AND RESERVE ESTIMATES
The Molo Mine hosts the following Mineral Resources and remains open along strike and to depth:
• Measured Mineral Resources of 23.51 Mt at 6.31% Cg.
• Indicated Mineral Resources of 76.75 Mt at 6.25% Cg.
• Inferred Mineral Resources of 40.91 Mt at 5.78% Cg.
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Molo Resource Estimate Statement
Effective Date: March 31, 2025
Classification Material Type
Resource
Tonnes Grade Contained Carbon
Graphite
(kt) (% Cg)(1) (kt)
Measured “Low-Grade” 13,025 4.64 604
Measured “High-Grade” 10,480 8.40 880
Total Measured 23,505 6.31 1,484
Indicated “Low-Grade” 39,539 4.73 1,871
Indicated “High-Grade” 37,207 7.86 2,925
Total Indicated 76,746 6.25 4,796
Measured + Indicated “Low-Grade” 52,564 4.71 2,475
Measured + Indicated “High-Grade” 47,686 7.98 3,805
Total Measured + Indicated 100,250 6.26 6,280
Inferred “Low-Grade” 24,233 4.46 1,081
Inferred “High-Grade” 16,681 7.70 1,285
Total Inferred 40,914 5.78 2,366
Notes:
(1) % Cg = percentage Carbon Graphite.
(2) Mineral Resources are classified according to the Canadian Institute of Mining definitions.
(3) Mineral Resources are reported Inclusive of Mineral Reserves.
(4) “Low Grade” Resources are stated at a cut-off grade of 2% Cg.
(5) “High Grade” Resources are stated at a cut-off grade of 4% Cg.
(6) Eastern and western high-grade assays are capped at 15% Cg.
(7) A relative density of 2.36 tonnes per cubic meter (t/m3) was assigned to the mineralized zones for the resource tonnage estim ation.
(8) Totals may not represent the sum of the parts due to rounding.
(9) Mineral Resources are defined as surface mineable only.
(10) Mineral Resources that are not mineral reserves do not have demonstrated economic viability. There is no certainty that any mineral resource will
be converted into a mineral reserve.
The table below presents the Mineral Reserves which have been estimated for the Molo Mine:
Molo Reserve Estimate Statement
Effective Date: March 31, 2025
Classification Material Type
Ore Grade Contained Carbon
Graphite
(kt) (% Cg)(1) (kt)
Proven Reserves Total 21,356 6.39 1,365
Probable Reserves Total 61,228 6.23 3,815
Total Reserves 82,584 6.27 5,181
Notes:
(1) % Cg = percentage Carbon Graphite.
(2) Mineral Reserves are classified according to the Canadian Institute of Mining definitions.
(3) Apparent computational errors due to rounding are not considered significant.
(4) The Mineral Reserves are reported with appropriate modifying factors of dilution and recovery.
(5) The Mineral Reserves are reported at the head grade and at delivery to plant.
(6) The Mineral Reserves are stated at a basket price of US$1,085 per tonne of concentrate as at March 31, 2025.
(7) Although stated separately, the Mineral Resources are inclusive of the Mineral Reserves.
(8) Only Measured and Indicated Mineral Resources have been converted to Mineral Reserves.
(9) Quantities are reported in metric tonnes.
(10) The Mineral Reserve estimates contained herein may be subject to legal, political, environmental or other risks that could ma terially affect the
potential development of such Mineral Reserves
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METALLURGY
The FS is based on a full suite of metallurgical test work performed by SGS Canada Metallurgical
Services Inc. in Lakefield, Ontario, Canada. These tests included lab and bench scale process
development work, a bulk sample/pilot plant program, and metallurgical optimization and variability
program. The overall graphitic carbon recovery into the final concentrate is 92.0% and the mass pull
to concentrate is 5.9%.
Flake Size Distribution and Product Grade
Product Size Distribution (%) Product Grade
(% Cg)
+50 mesh 13.7 97.1
-50 to +80 mesh 28.0 96.9
-80 to +100 mesh 10.6 97.4
-100 mesh 47.7 97.8
PRICING
The life of mine average selling price East Africa FOB of US$1,138/t of concentrate (Real) used in
the FS is the volume weighted average sales price for the various flake sizes and grades of
SuperFlake® graphite concentrate that are expected to be produced from the Molo deposit. Prices
used are based on current market prices provided by UK-based, commodity price reporting agency
Benchmark Minerals Intelligence , who are recognized as leaders in providing independent and
unbiased market research, pricing trends , and demand and supply analys es for the natural flake
graphite market.
Current market prices in real US dollar terms were used through to 2040 and held constant thereafter
over the rest of the life of mine. A pricing premium for increased carbon grade was applied based on
recent market trends for products exceeding 94% carbon . No other premiums were applied.
Furthermore, no financial or operational calculations and/or scenarios in the FS financial model with
regard to downstream value-added processing of SuperFlake® graphite concentrate were included.
This includes purification, spheroidization and coating for battery -grade graphite and thermal
expansion for specialty graphite applications, such as foils. Pricing also assumed that any material
required to be sold into Madagascar would be sold at the same price.
MADAGASCAR REGULATORY RISK
In May 2026, the Government of Madagascar enacted Decree No. 2026 -831, which designates
several minerals, including graphite, as “Strategic Mineral Substances” and provides, inter alia, for
direct State participation in projects involving such commodities. The decree establishes an
entitlement of a minimum non -dilutable State participation of 10%, exercisable through designated
State entities and without any requirement for the State to contribute funding for such interest. It also
provides the State with e nhanced governance, information and oversight rights and introduces
provisions relating to domestic supply obligations and strategic resource management.
The financial assessment presented in the Feasibility Study has been prepared based on the current
project ownership structure (being 100% owned by ERG Madagascar SARLU, an indirect wholly
owned subsidiary of NextSource) and does not include the impact on NextSource of any free-carried
State interest in ERG Madagascar SARLU. The State’s potential participation percentage in the Molo
Mine has not yet been determined. A material reduction in cash flows and other economic
parameters (including NPV, IRR and pay back) attributable to NextSource because of a free -carried
interest in ERG Madagascar SARLU may have a material adverse effect on the economics and
overall viability of the Molo Mine for NextSource.
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The regulatory changes, together with any future amendments or additional decrees that may come
into effect, may affect the timing, economics and implementation of the Molo expansion by
introducing additional requirements that remain uncertain in scope and application, including the
negotiation of a mining convention and a potential obligation to sell up to, but no more than, 30% of
production to the national market or national industries. These aspects will form part of ongoing
engagement with the Govern ment of Madagascar to clarify implementation requirements and to
negotiate a potential stability agreement and broader regulatory framework to support the
progression of the Molo Mine.
TECHNICAL REPORT FILING
This technical report summarizing the FS will be filed under the Company’s profile on SEDAR + at
sedarplus.ca and will be posted on NextSource’s website at nextsourcematerials.com within 45 days
of this news release.
DATA VERIFICATION
Data verification programs were undertaken by the Qualified Persons authoring the FS and have
included review of QA/QC data, re -sampling and sample analysis programs, and database
verification. Validation checks were performed on data, and comprise checks on surveys, collar
coordinates and assay data. Sufficient verification checks were undert aken on the database to
provide confidence that the database is appropriate to support the technical information contained
herein.
QUALIFIED PERSONS
Scientific and technical information presented in this press release was reviewed and approved by
the following Qualified Persons as defined under NI 43 -101: Keith Wilson, Damian Pianta, Jeremy
Tape, Greg Gold (Stantec), Philip John Hancox and Desmond Subramani (Caracle Creek
International Consulting (Pty.) Ltd.), Oliver Peters (Metpro Management Inc.), Clive Brown (Bara
Consulting Ltd.), Andreas Savvas (Epoch Resources (Pty) Ltd.), and Alkie Marais (Geostratum (Pty)
Ltd.).
ABOUT NEXTSOURCE MATERIALS INC.
NextSource Materials Inc. is a battery materials 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 through Phase 1 mine operations.
The Company is also developing a significant downstream graphite value -add business through the
staged rollout of Battery Anode Facilities (BAF) capable of large -scale production of coated,
spheronized and purified graphite for direct delivery to battery a nd automotive customers, in a fully
transparent and traceable manner.
The Company is now in the process of developing its first BAF in the UAE and has executed a multi-
year offtake agreement for the supply of anode active material with Mitsubishi Chemical Corp of
Japan into North America.
NextSource Materials is listed on the Toronto Stock Exchange under the symbol “NEXT” and on the
OTCQB under the symbol “NSRCF".
For further information about NextSource Materials, please 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].
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Cautionary Note
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”, “poss ible”
and other similar words, or statements that certain events or conditions “may”, “will”, “could”, “expected” or “should” occur.
Forward-looking statements include any statements regarding, among others, relating to the development plan of the BAF,
reserve and resource estimates, results of the FS and any future -oriented financial information contained within, the
development plan of the Molo Mine expansion to 150k tpa and any current delays in funding, shipping, the extent of, and
impact of, potential direct State participation in projects involving certain strategic commodities including the Moro Project , or
otherwise due to the current Middle East conflict, as well as the Company’s intent on becoming a fully integrated global
supplier of critical battery and technology materials. These statements are based on current expectations, estimates and
assumptions that involve a number of risks, which could cause actual results to vary and, in some instances, to differ materially
from those anticipated by the Company and described in the forward -looking statements contained in this press release.
These risks include the risk factors set forth in the Company’s latest Annual Information Form (which includes the disclosed
risk related specifically to the development commissioning and operation of the BAF), and those disclosed 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 as of the date of this news release and are expressly
qualified in their entirety by this cautionary stateme nt. Subject to applicable securities laws, the Company does not assume
any obligation to update or revise the forward-looking statements contained herein to reflect events or circumstances occurring
after the date of this news release.