NextSource Materials Provides Quarterly Update and Announces Progress on Molo Mine Expansion Study and Battery Anode Facility Strategy
NextSource Materials Provides Quarterly Update and Announces Progress
on Molo Mine Expansion Study and Battery Anode Facility Strategy
NEWS RELEASE – TORONTO, May 15, 2025
NextSource Materials Inc. (TSX: NEXT) (OTCQB: NSRCF) ("NextSource" or "the Company")
provides a third quarter activities update for nine months ending March 31, 2025 on its mine
operations in Madagascar, and progress in the consideration of a larger-scale expansion of the Molo
mine and the development of a Battery Anode Facility.
The Company’s third quarter financials and Management’s Discussion and Analysis (MD&A) are
available to access on SEDAR+ and the NextSource corporate website by end of business on May
16, 2025.
Since announcing the initiation of the plant commissioning process on March 23, 2023, and first
production of SuperFlake® graphite concentrate in June 2023 , NextSource has made steady
progress ramping up its Molo Phase 1 (“Phase 1”). In October 2024, the Company successfully
completed its first commercial shipments of SuperFlake® graphite concentrate to customers in
Germany and the United States of America under existing offtake agreements, with shipments having
arrived at customer destinations since January 2025.
To date, the Company has received orders for over 1,000 tonnes of its SuperFlake® graphite for
qualification purposes, confirming the strong market demand for the Company’s graphite products .
These requests are with multiple end -users and for several applications, including battery anodes,
refractory, and graphite foils for fire retardants and consumer electronics.
Molo Update and Feasibility Study Update
The Molo Phase 1 operation was severely affected during the first calendar quarter of 2025 by
excessive rain, where the mine site experienced 3 cyclones passing in close proximity. This weather
disruption significantly hindered the ramp -up process but was used as an opportunity for the
Company to improve its operating procedures, with the site successfully weathering the storms with
minimal incidents.
During the quarter, and in parallel with ramp -up efforts, the Company concluded a comprehensive
technical and organizational review (“the Review”) of Molo Phase 1 operations , which included a
detailed technical and organizational assessment , and consolidation of the insights and learnings
accumulated over the course of Phase 1 ramp-up.
The Review identified the remaining technical issues slowing the ramp -up, tracing them to
inefficiencies in the milling and flotation circuits, which limit the plant capacity to c.11,000 tonnes per
annum, and the improvements needed to correct them. Instead of incurring costs and resources to
complete final fixes to the Phase 1 plant, where anticipated volume demands will quickly outgrow its
volume capacity, the Company has updated its operational strategy to utilize Phase 1 for campaign
production.
The Review also reinforced confidence in the quality and potential of the Molo mineral reserve
estimates and its ability to produce a high-quality graphite concentrate with a fixed carbon content
between 94-97%. Key i nsights and learnings from Phase 1 are being incorporated in the updated
feasibility study (the “Updated Feasibility Study”) to consider a revised development timeline and
staged expansion approach for Molo Phase 2 . The completion of the Updated Feasibility Study is
expected by the third calendar quarter of 2025.
This shift in operational strategy enables the Company to preserve cash and divert limited resources
towards preparations for an industry-scale Molo Phase 2 expansion , which is expected to benefit
from larger economies of scale, while being able to continue qualifying its graphite products and
servicing key customers through Phase 1.
The approximately 2, 500 tonnes of SuperFlake® graphite concentrate in inventory , together with
continued campaign production , will continue to support the qualification requests of SuperFlake®
graphite products and the servicing of existing key customers. This will enable the Company to
continue the build out of its sales channels as it prepares for Phase 2 expansion in a responsible
manner, and in lockstep with market demand.
Battery Anode Facility (“BAF”) Update
Battery Anode Facilities are value -added processing facilities that are capable of converting our
smaller size fraction graphite concentrate into a high-value graphite anode product, which is a critical
and major component to the battery anode material that is assembled along with cathode material
into lithium-ion batteries used in electric vehicles (“EV”).
Our Mauritius BAF is intended to have an initial production capacity of 3,600 tpa of graphite anode
products with the main process equipment ordered and received during financial year 2025 to the
value of approximately US$12 million. The initiation of construction activities is still subject to a
delayed EIA process and brings some risk to the viability of the Mauritius BAF. If the Company fails
to secure the necessary permits , the Company has the option to terminate the Port Louis industrial
lease at no further cost. Under this scenario the delivered BAF equipment is transportable and can
be assembled in any suitable location.
As such, t he Company has also identified prospective BAF sites in the Middle East that offer an
attractive opportunity for a larger-scale BAF with an accelerated development schedule. NextSource
has made steady progress to advance discussions with potential EV manufacturers (”OEMs”) to
secure an offtake agreement , currently under negotiation . These negotiations are centered on
meeting the specific requirements of OEMs supported by positive feedback from product qualification
trials. The development of a large-scale BAF aligns with the Company's broader strategy, ensuring
a robust and sustainable supply chain for its global customers.
NextSource is also actively advancing a financing workstream to evaluate potential strategic
investors for a Middle Eastern -based BAF. This initiative aims to secure a local partnership in the
establishment of a BAF in this jurisdiction, which will play a critical role in delivering battery anode
materials globally.
Graphite Market Outlook
The market landscape continues to support NextSource’s strategic direction, as global demand for
critical minerals accelerates alongside the clean energy transition. EV adoption remains a major force
behind graphite demand growth with a continued surge in global EV sales . The expansion of
renewable energy storage is further reinforcing this trend as electrification directly impacts battery
material demand. As the core component of all lithium -ion battery anodes, graphite remains the
largest battery material in a battery by volume, making up more than 95% of a lithium -ion battery
anode. As vehicle manufacturers prioritize securing raw materials closer to their production hubs, the
need for stable, local supply chains has become increasingly urgent.
Global supply chain shifts are accelerating away from China, the world’s largest producer and
processor of graphite, due to heightened geopolitical tensions and trade policy changes. The
International Energy Agency has flagged graphite as the most vulnerable battery mineral, citing high
geographic concentration, tight supply margins, and growing export risks. Market participants are
responding by actively looking for alternative sources of both natural graphite and battery anode
materials, with NextSource well-positioned to benefit from this continued shift.
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 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
capable of large-scale production of coated, spheronized and purified graphite for direct delivery to
battery and automotive customers, in a fully transparent and traceable manner.
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, please visit our website at nextsourcematerials.com
Investors may contact: Brent Nykoliation, Executive Vice President +1.416.364.4911
Cautionary Note
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 o n 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 word s, or statements that certain events or conditions “may”, “will”, “could”, or “should” occur. Forward -
looking statements include any statements regarding, among others, the filing of an Updated Feasibility Study and the timing
thereof; certain business and operational plans of the Company; the rollout of Battery Anode Facilities including the capabilities
and the timing thereof; and the outlook in Graphite markets. 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. No assurance can be giv en 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 dat e 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 statement. Subject to applicable securities laws, the Compan y
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.