Northern Graphite Announces First Quarter 2026 Results and Provides Corporate Update Joint Venture to develop Saudi Battery Anode Material facility Restructures Senior Secured Debt with Sprott Streaming Advances Preparations for LDI Pit Extension
Northern Graphite Announces First Quarter
2026 Results and Provides Corporate Update
Joint Venture to develop Saudi Battery Anode Material facility
Restructures Senior Secured Debt with Sprott Streaming
Advances Preparations for LDI Pit Extension
Advances Mill Relocation to Okanjande Mine Site
Ottawa, Ontario--(Newsfile Corp. - June 2, 2026) - Northern Graphite Corporation
(TSXV: NGC)
(OTCQB: NGPHF) (FSE: 0NG) (XSTU: 0NG)
(the "
Company
" or "
Northern
") is pleased to provide
an operating summary and financial highlights for the three month period ending March 31, 2026. The
Company's Financial Statements and Management's Discussion and Analysis for the period have been
filed on SEDAR+ and posted to the Company website.
"While Northern's financial and operating performance continued to be impacted during the first quarter
by the temporary shutdown of the Lac des Iles (
"LDI"
) mine and processing plant, the period also saw
us advance on our key growth catalysts across divisions. At LDI, we advanced critical mill maintenance
associated with the planned 2026 pit expansion, positioning the operation for increased throughput and
improved operating efficiency. At the same time, our partnership with Obeikan Investment Group to
develop a Battery Anode Material ("BAM") facility in the Kingdom of Saudi Arabia has materially
advanced our mine-to-battery strategy and accelerated plans to restart our Okanjande mine in Namibia,"
said
Chief Executive Officer Hugues Jacquemin
. "Subsequent to quarter end, we completed a
transformative restructuring of our senior secured debt
, stream and royalty arrangements with
Sprott Streaming, materially strengthening our balance sheet and aligning our capital structure with our
long-term development timeline. Together, these milestones reflect Northern's continued transition from
planning to execution as we build an integrated graphite platform supporting secure graphite supply
chains independent of China."
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Operational Highlights: Driving toward Execution
There was
no active mining or processing at our cornerstone Lac des Iles mine and plant
in the First Quarter
as work advanced to complete critical maintenance work to prepare it for
operational readiness ahead of the planned 2026 pit expansion;
The Company expects to
resume mining activities in the third quarter
as we continue to await
receipt of our amended mining permit, originally filed in February. Upon restart, Northern
anticipates transitioning the LDI mill to a seven-days-per-week, 24 hours/day operation as it
targets nameplate capacity of 25,000 tonnes per year;
In March, the Company completed
a flow-through private placement
for gross proceeds of $2
million which will be used to complete a drill program on a number of targets around the mine or at
its nearby Mousseau exploration project in 2026 and 2027, with the objective of identifying
potential new sources of mill feed;
As it seeks to enhance market visibility and enable transparent, market-driven price discovery
amid increasingly robust demand for its graphite portfolio, Northern announced in March that it has
partnered with Metalshub
to launch online auctions
for graphite flake products from LDI;
In Namibia, the Company
initiated work in May to relocate the processing plant
from the
former Okorusu site to the mine site at Okanjande as it targets a restart of the mine in late 2027.
The work is now 60 percent complete and is expected to be concluded in June 2026;
In January, Northern announced
a landmark joint venture with Obeikan Investment Group to
develop a scalable US$200 million Battery Anode Material ("BAM") facility
in the Kingdom
of Saudi Arabia, advancing Northern's mine-to-battery strategy and positioning the Company to
supply graphite anode materials to global markets outside of China;
Northern also continued to advance its Mine-to-Market Strategy in the first quarter with an
R&D
partnership with Rain Carbon Germany GmbH, H.C. Starck Tungsten GmbH and Friedrich
Schiller University Jena
for a three-year German-funded program to develop cleaner graphite
processing and battery recycling technologies for the European battery sector;
Northern is
actively engaging with technology and original equipment manufacturing
("OEM") partners
in both the US and Europe who want to collaborate with a quality supplier of
graphite that has current production and the capacity to support future growth. Discussions are
also being held with various Canadian government organizations at both the federal and provincial
level to gain support to speed up the development of the battery anode supply chain, with a
particular focus on Ontario and Québec.
Financial Highlights: Balance Sheet Restructuring
(Stated in thousands of Canadian Dollars except for per-tonne amounts)
No sales or revenue were recorded in the first quarter
as a result of a temporary shutdown at
the LDI mine and processing plant as the Company advanced critical maintenance and
development work ahead of the 2026 pit expansion, dependent on final approval of the Company's
amended Certificate of Authorization which was filed in February 2026;
A loss from mine operations at LDI of nil
was recorded for the quarter ended March 31, 2026
compared to income from mine operations of $0.3 million for the prior year's quarter. The 2025
amount does not include impairment losses on inventory and there were no impairment losses for
Q1 2026;
General and administrative expenses
during the first quarter of 2026 were $2.5 million
compared with $2.5 million in the first quarter of 2025 as higher office and management expenses
at NGC Battery Materials were offset by lower legal expenses;
License and other revenue
was $0.6 million for the three-month period ended March 31, 2026,
in-line with $0.7 million in the first quarter of 2025;
Finance costs rose in the quarter
to $3.7 million (2025 - $3.2 million) as a result of higher
accretion, partially due to the non-payment of interest on senior secured debt and royalties
resulting in higher interest accretion, partially offset by a larger gain on a revaluation of the
Company's royalty liability and senior debt due to modifications to the anticipated timing of royalty
and interest payments. Almost all of the finance costs were non-cash items;
A
net loss of $9.9 million
($0.06 per share) was recorded in the first quarter of 2026 compared
to a net loss of $5.3 million ($0.04 per share) during the three months ended March 31, 2025. The
primary reasons for the increased loss were the continuous temporary shutdown of the LDI plant
resulting in no revenue during the quarter, an increase in care and maintenance expense of $1.3
million and the significant impact of non-cash items including a foreign exchange loss on the
Company's operations and U.S. dollar denominated financial instruments of $1.6 million compared
to the prior year period's gain of $0.1 million. The net loss of $9.9 million includes $6.7 million in
non-cash items;
As of March 31, 2026, the Company
continued to report its senior secured loan ($30.2
million) and its royalty financing ($19.0 million) as current liabilities
as a result of the lack of
performance by the Company on the following covenants related to these instruments:
Senior secured loan:
The payment of accrued interest of $7.0 million (US$5.1 million) on the semi-annual cash
interest payment date as of March 31, 2026 (covering the period January 1, 2024 to
December 31, 2025);
Maintaining, at all times, on a consolidated basis, positive working capital, and;
Maintaining, at all times, on a consolidated basis, a minimum cash balance of US$0.75
million.
Royalty Financing:
The payment of royalty amounts totaling $6.1 million (US$4.4 million) which were due from
2024 through 2026
;
Debt Agreement:
As of May 31, 2026, all defaults have been waived by the lender effective
March 31, 2026.
On April 29, 2026, the Company entered into a binding letter of agreement (the "
Debt
Agreement
") to restructure its secured debt, stream and royalty financing arrangements with
funds managed by Sprott Resource Streaming and Royalty Corp. (collectively,
"Sprott
Streaming"
), which will significantly strengthen the Company's financial position. Under the
terms of the Debt Agreement, all of the senior secured debt held by Sprott Streaming in the
principal amount of approximately US$16.0 million, which matures on April 29, 2026,
together with all accrued interest thereon which currently amounts to approximately US$6
million, will be satisfied through Northern issuing 12.5 million common shares to Sprott
Streaming - resulting in Sprott Streaming increasing its interest in the Company to 9.9% of
its basic shares outstanding and becoming the Company's largest shareholder - and an
amendment to the Sprott streaming agreement in respect of the Company's Okanjande
project to remove the current 350,000 tonnes of graphite concentrate cap on production and
option to then convert the stream to a 1.0% royalty, such that the streaming agreement will
now cover all future production from the Okanjande project;
Cash and equivalents were $1.1 million as at March 31, 2026
, compared to $2.5 million as of
December 31, 2025. The net decrease in cash and cash equivalents resulted from the following
elements:
Net cash used in operating activities
was $5.7 million, largely driven by the LDI plant
remaining under a temporary shutdown during the first quarter resulting in no sales of product
and changes in related working capital items;
Net cash used in investing activities
of $0.6 million as the Company continued to pay for
development of mineral interests and equipment modernization to extend the life of LDI mine;
and
Net cash provided by financing activities
of $4.8 million was mainly the result of $2.0
million in flow through share funding completed during the quarter and the receipt of a
repayable government contribution of $2.9 million, partially offset by lease payments and
repayment of debt;
The classification of the Company's senior debt and royalty classification as current liabilities
($49.3 million in total) was largely the reason for a negative working capital balance of $54.6
million as at March 31, 2026.
(1)
The Company reports the non-IFRS financial measures of average realized sales price per tonne of graphite concentrate sold and cash costs
per tonne of graphite concentrate sold to manage and evaluate its operating performance. See "Cautionary Note Regarding Non-IFRS Performance
Measures" below.
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Northern is advancing toward its goal of becoming a vertically integrated, mine-to-market supplier to
traditional downstream customers and to the emerging market for battery anode material. The main
catalysts of that strategy include growing graphite production from its cornerstone Lac des Iles asset,
restarting its Okanjande mine in Namibia and developing downstream capacity to produce anode
material for use in lithium-ion batteries and electric vehicles (
"EVs"
) in North America, Europe and
Saudi Arabia and to upgrade graphite mine concentrate into value added industrial products.
Graphite Markets Outlook
Policy momentum continues to grow in North America and Europe for critical minerals
with
graphite increasingly recognized as a strategic material tied to energy security, industrial policy and
supply chain resilience. In Europe, the Critical Raw Materials Act continues to support the development
of strategic raw material supply chains, while in Canada and the United States a combination of
industrial policy, targeted investment and evolving trade measures continues to reinforce domestic
battery material development. As a member of the North American Graphite Alliance ("
NAGA
"),
Northern continues to engage with government agencies regarding measures to support the
development of a domestic graphite industry in the United States, including ongoing reviews of existing
Section 301 tariffs and discussions around additional trade protections and strategic supply chain
measures.
Demand for high-quality graphite for non-battery applications continues to
strengthen
, particularly in North America and especially for large and jumbo flake graphite produced at
the Company's Lac des Iles mine. While Northern has previously faced challenges meeting demand due
to technical issues at the mine and plant, the Company anticipates improved performance following
ongoing plant upgrades and the planned restart of operations tied to the 2026 pit extension. As it seeks
to enhance market visibility and enable transparent, market-driven price discovery for its graphite
portfolio,
Northern has partnered with Metalshub
, a leading digital platform provider for the metals
and mining industry, to conduct online auctions for graphite flake products from Lac des Iles. Northern
has started to conduct
competitive bidding events for multiple natural graphite flake sizes, including
jumbo, large and medium flake products.
Battery Materials
Northern took a
transformative step in the first quarter toward becoming an integrated global
battery materials producer
through the signing of a term sheet with Obeikan Investment Group to
jointly develop and operate a large-scale Battery Anode Material ("BAM") facility in Yanbu Industrial City,
Kingdom of Saudi Arabia. The proposed facility, expected to require approximately US$200 million in
capital, is planned to have an initial production capacity of 25,000 tonnes per year, scalable over time to
meet growing demand for ex-China anode material supply. The project is
expected to accelerate the
restart of Northern's Okanjande mine in Namibia
while establishing a strategic presence in one of
the world's fastest-growing industrial and logistics hubs with direct access to European, North American
and Middle Eastern markets. Northern expects to complete a feasibility study for the Yanbu facility in the
coming months, with the project intended to serve as a
blueprint for planned BAM facilities in
Canada and France
. In parallel, Northern continued advancing its technical and commercial
capabilities across the battery materials value chain. During the quarter, Northern and partners Rain
Carbon Germany GmbH, H.C. Starck Tungsten GmbH and Friedrich Schiller University Jena
launched
a three-year research and development program
funded largely by the German Federal Ministry for
Economic Affairs and Energy to develop an environmentally friendly and secure graphite processing
route for Europe's battery industry incorporating both natural and recycled graphite feedstocks. The
initiative is intended to support the development of a more sustainable and independent anode material
supply chain outside of China. Graphite-based anode material is the largest component of lithium-ion
batteries by weight and requires significant downstream processing capacity, most of which is currently
concentrated in China. Northern's integrated mine-to-battery strategy is designed to establish a secure,
transparent and scalable supply chain of natural graphite anode material for global markets.
Mining Operations
Northern is advancing its key growth catalyst of adding resources that will enable it to bring on quick,
scalable, low capex production from its existing mine and development projects in time to supply
growing demand amidst widescale global electrification and the EV revolution.
Lac des Iles Mine, Quebec
Lac des Iles remained under
temporary care and maintenance throughout the first quarter of
2026
as Northern continued critical maintenance and development work associated with the planned
2026 pit extension and mill refurbishment program. As a result, no production, sales or shipments were
recorded during the quarter. The work program included major mill maintenance activities designed to
support increased throughput, improved operating efficiency and a planned transition to continuous
seven-days-per-week operations targeting annual nameplate capacity of 25,000 tonnes per year ("
tpy
").
The planned pit extension is based on an updated mineral resource estimate announced in January
2024, which indicated the potential to extend the mine life by approximately eight years. Northern's
independent consultants have since prepared a draft life-of-mine plan for an extension to the existing pit,
while overburden pre-stripping activities were completed in late 2025 in preparation for mining
operations.
Operations are now expected to resume from the pit extension in the third quarter of
2026
, subject to final approval of the Company's amended Certificate of Authorization, which was filed
in
February 2026. The pit extension is expected to be largely financed through the previously announced
$6.2 million interest-free, repayable government funding package, while the Company continues to
evaluate additional financing alternatives to support ongoing production and development activities
beyond 2026.
Northern believes the Lac des Iles property continues to offer significant long-
term upside beyond the current pit extension
. The Company completed a drilling program in the
fourth quarter of 2024 with the objective of further identifying and expanding LDI resources with a lower
strip ratio, although core logging and data compilation have been delayed due to the financial constraints
the Company is experiencing. As well, Northern is evaluating additional potential exploration targets near
the mine and at its nearby Mousseau project with the objective of identifying future sources of mill feed.
Okanjande Mine, Namibia
Northern is
advancing plans to restart its Okanjande mine in Namibia in late 2027
as the Company
prepares to be able to supply graphite concentrate to its planned Battery Anode Material ("BAM") facility
in the Kingdom of Saudi Arabia, which is targeted to begin production in 2028. Subsequent to quarter
end, the Company
initiated work to relocate the processing plant
from the former Okorusu site to
the mine site at Okanjande and retained Rotary Engineering Services of Namibia to dismantle and
transport the remaining plant infrastructure for reassembly at the mine site. The work is now 60 percent
complete and is expected to be concluded in June 2026. The plant relocation marks another step toward
resuming production at Okanjande and is expected to reduce operating costs, improve project
sustainability and enhance the operation's long-term expansion potential. Namibia is considered one of
the most favourable mining jurisdictions in Africa, and Okanjande is well positioned to supply customers
in North America, Europe and the Middle East. The operation benefits from high-quality graphite
resources, proximity to the deep-water port at Walvis Bay and a comparatively short development
timeline relative to many competing graphite projects. Northern believes these advantages position
Okanjande to play an important role in supporting the development of secure graphite supply chains
independent of China.
Closing Remarks
"Northern has entered a pivotal stage in its evolution, with a stronger balance sheet, advancing
operations and a clear path toward becoming an integrated global graphite and battery materials
producer,"
said Mr. Jacquemin
. "Over the coming quarters, we expect to restart production at Lac des
Iles, continue advancing toward a final investment decision for our planned BAM facility in Yanbu and
further position Okanjande as a future source of scalable graphite production. Together, these initiatives
are laying the foundation for Northern to become a key supplier of critical materials to global markets
seeking secure supply chains independent of China."
About Northern Graphite
Northern is a Canadian, TSX Venture Exchange listed company that is the only flake graphite producing
company in North America.
Northern is focused on becoming a world leader in producing natural
graphite and upgrading it into high-value products critical to the green economy, including anode
material for lithium-ion batteries/EVs, fuel cells and graphene, as well as advanced industrial
technologies. The Company's mine-to-battery strategy is spearheaded by its Battery Materials Group,
which has a fully equipped, state-of-the-art laboratory in Frankfurt and is focused on advancing plans to
develop battery anode material plants in Saudi Arabia, Quebec and France.
Northern's graphite assets include the producing Lac des Iles mine in Quebec, where the Company is
boosting output to meet growing 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, and represents an opportunity to substantially increase graphite production at
a lower cost and with a shorter time to market than most competing projects. All projects have "battery
quality" graphite and are located close to infrastructure in politically stable jurisdictions.
For media inquiries contact
Pav Jordan, VP of Communications
Email:
For further information contact
Niall Moore, CFO
Telephone: (613) 271-2124
Email:
Qualified Person
Gregory Bowes, B.Sc. MBA P.Geo, the Chairman of Northern, is a "qualified person" as defined under
NI 43-101 and has reviewed and approved the content of this news release.
For additional information
Please visit the Company's website at
www.northerngraphite.com/investors/presentation
the Company's
profile on
www.sedarplus.ca
our
Social Channels
listed below or contact the Company at (613) 271-
2124.
YouTube
X
Cautionary Note Regarding Non-IFRS Performance Measures
This news release includes certain non-IFRS performance measures that do not have a standardized
meaning prescribed by International Financial Reporting Standards ("IFRS"). The Company believes
that these measures, in addition to measures prepared in accordance with IFRS, provide investors with
an improved ability to evaluate the underlying performance of the Company and to compare it to
information reported by other companies. The non-IFRS measures are intended to provide additional
information and should not be considered in isolation or as a substitute for measures of performance
prepared in accordance with IFRS. These measures do not have any standardized meaning prescribed
under IFRS, and therefore may not be comparable to other issuers. The calculation and an explanation of
these measures is provided in the Company's Management's Discussion and Analysis and such
measures should be read in conjunction with the Company's Management's Discussion and Analysis
and financial statements.
Cautionary Note Regarding Forward-Looking Statements
This news release contains certain "forward-looking statements" within the meaning of applicable
Canadian securities laws. 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 in this news release include statements
regarding, among others, plans for extending the mine life and output at LDI, bringing the Company's
Namibian operations back online, advancing plans for its Yanbu Battery Anode plant to a final
investment decision, otherwise developing the capacity to manufacture value added products and
raising the financing to complete any or all of these initiatives. All such forward-looking statements are
based on assumptions and analyses made by management based on their experience and
perception of historical trends, current conditions and expected future developments, as well as other
factors they believe are appropriate in the circumstances. However, these statements are subject to a
variety of risks and uncertainties and other factors that could cause actual events or results to differ
materially from those projected including, but not limited to, unexpected changes in laws, rules or
regulations, or their enforcement by applicable authorities; the failure of other parties to perform as
agreed; social or labour unrest; changes in commodity prices; unexpected failure or inadequacy of
infrastructure and the failure of ongoing and contemplated studies to deliver anticipated results or
results that would justify and support continued studies, development or operations, and the inability
to raise the required financing. Readers are cautioned not to place undue reliance on forward-looking
information or statements.
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 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.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this
press release.
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