NMG Issues Results of Feasibility Study for its Integrated Ore-to-Anode- Material Model Projected to be North America’s Largest Natural Graphite Operation with Attractive Economics This news release constitutes a “designated news release” for the purposes of the
NMG Issues Results of Feasibility Study for its Integrated Ore-to-Anode-
Material Model Projected to be North America’s Largest Natural Graphite
Operation with Attractive Economics
This news release constitutes a “designated news release” for the purposes of the
Company’s prospectus supplement dated January 21, 2022, to its short form base shelf
prospectus dated May 19, 2021, as amended by amendment no. 1 dated January 19, 2022.
• NMG is developing a turnkey natural graphite operation with competitive
advantages due to its privileged location, vertical integration, cost structure, ESG
credentials and experienced team.
• The Company’s Phase-2 Matawinie Mine and Bécancour Battery Material Plant
projects, located within a 150-km radius of Montréal, Québec, show attractive
economics and robust operational parameters underpinned by a large mineral
property, NMG’s proprietary technologies, and clean hydroelectricity powering its
operations.
• The Feasibility Study of NMG’s integrated operation indicates a 21% after-tax IRR
and NPV of C$ 1,581 million based on current projections of pricing prepared by a
third-party expert for high-purity flakes and advanced graphite materials.
• NMG’s integrated production flowsheet provides the flexibility to distribute
graphite concentrate per flake size and market demand in order to cater to the most
profitable segments.
• NMG’s phased approach has helped de-risk NMG’s projects while accelerating the
engineering of Phase-2 operations, generating process and cost optimization, and
supporting commercialization with potential customers.
• NMG is designing a mine of the future, targeted to be all-electric, complemented by
clean advanced beneficiation facilities in order to provide battery and EV
manufacturers with responsibly extracted, environmentally transformed, and
locally sourced green anode material.
• Shareholders and analysts are invited to attend an Investor Briefing at 10:30 a.m.
ET hosted by NMG’s Management Team via webcast:
https://us06web.zoom.us/webinar/register/WN_XA0uyzAQTBiPinZmx3pvuA
MONTRÉAL--(BUSINESS WIRE)--July 6, 2022--Developing a local, carbon-neutral and
traceable turnkey supply of advanced materials for the Western World, Nouveau Monde
Graphite Inc. (“NMG”, “Nouveau Monde” or the “Company”) (NYSE: NMG, TSXV: NOU)
releases the results of its feasibility study (the “Study”) completed in accordance with the
National Instrument 43-101 (“NI 43-101”) for its integrated business operation comprised of the
Phase-2 Matawinie Mine and Bécancour Battery Material Plant projects. The Study, conducted
by engineering firm BBA Inc. (“BBA”) with the support of various technical consultants, has
demonstrated strong economics for NMG’s model as the battery and electric vehicle (“EV”)
manufacturers seek alternatives for sourcing their graphite-based solutions amidst growing
demand and projected structural deficit of production in the next decade. The Company is ideally
positioned to cater to the North American and European markets with its large graphite deposit,
proprietary ecotechnologies, demonstrated production capacity thanks to its Phase-1 operations,
as well as preferential jurisdiction advantages including clean hydropower, flexible logistical
base and stable fiscal and political environment.
Updating resources and reserves, operational, and financial metrics of the Matawinie Mine 2018
bankable feasibility study (effective as of July 10, 2018 and issued on December 10, 2018), the
Study also layered the production and economics structure of the Bécancour Battery Material
Plant, the process and engineering optimizations generated in recent months, the latest market
pricing as per Benchmark Mineral Intelligence’s assessment, as well as capital expenditures
(“CAPEX”) and operating expenses (“OPEX”) profile amidst current economic conditions.
These combined parameters for a projected annual average production of 103,328 tonnes per
annum (“tpa”) of high-purity flake graphite concentrate at the Matawinie Mine and 42,616 tpa of
anode material plus 3,007 tpa of purified jumbo flakes at the Bécancour Battery Material Plant,
using a portion of Matawinie’s production as feedstock, indicate an after-tax net present value
(“NPV”) of C$ 1,581 million and internal rate of return (“IRR”) of 21%.
Arne H Frandsen, Chair of NMG, said: “Market trends have accelerated in past months and
while inflation and logistics turbulences present a more challenging environment, we have
demonstrated our graphite expertise, advanced manufacturing capacity and complex project
management skills to execute our vision of an integrated green anode material production. The
successful upstream integration is designed to ensure that we have access to high-quality,
responsible feedstock for decades to come, and provides battery and EV manufacturers with the
assurance of a traceable, local, and carbon-neutral supply.”
Table 1: Economic highlights of NMG’s integrated Phase-2 graphite operations.
ECONOMIC
HIGHLIGHTS Matawinie Mine Bécancour Battery Material Plant INTEGRATED
NMG MODEL
Pre-tax NPV (8%
discount rate) C$ 986 M C$ 1,374 M C$ 2,360 M
After-tax NPV (8 %
discount rate) C$ 571 M C$ 1,010 M C$ 1,581 M
Pre-tax IRR 28.2% 22.8% 24.6%
After-tax IRR 22.2% 20.4% 21.0%
Pre-tax payback 3.2 years 4.3 years 3.9 years
After-tax payback 3.7 years 4.5 years 4.2 years
Annual average
production
103,328 tonnes of
graphite concentrate
42,616 tonnes of anode material 3,007 tonnes
of purified jumbo flakes 18,384 tonnes of by-
product fines
-
Life of mine (“LOM”) 25 years - -
Initial CAPEX C$ 481 M C$ 923 M C$ 1,404 M
Annual OPEX C$ 58 M C$ 136 M C$ 195 M
CAPEX and OPEX were established from test work results, Phase-1 operations, supplier
quotations and consultant’s in-house databases. Estimates being currently at the market's peak as
influenced by inflationary trends, NMG and its consulting firms have refined design,
engineering, and construction parameters to enable cost optimization and competitive pricing of
NMG’s production. Québec’s affordable clean hydropower underpins the Company’s
technologies, economics structure and carbon-neutrality commitment.
NMG’s integrated business model, with a secured feedstock, close-by operations at the western
market’s doorstep and operational flexibility to adapt production based on demand, represents a
stable and cost-effective structure in today’s everchanging macroeconomics.
Eric Desaulniers, Founder, President, and CEO of NMG, commented: “We have come a long
way from our initial Matawinie Mine project to develop an integrated operation tailored to the
market’s technical requirements and sourcing strategy. NMG is positioning itself as North
America’s largest, fully integrated natural graphite production to relieve battery and EV
manufacturers from their overreliance on Chinese production. With attractive economics, strong
ESG credentials, demonstrated execution capacity, and high-purity advanced materials, we are
set to provide a turnkey large-scale solution for the booming local battery value chain. Our
significant forecasted incremental annual operating profit potential is a testimony that it is
possible to embrace sustainable development and profitability to the benefit of all stakeholders.”
Product Offering and Market
The integrated material flowsheet developed by NMG is designed to leverage the distribution of
graphite concentrate flake sizes to be produced at the Phase-2 Matawinie Mine by catering to the
most profitable market segments. Jumbo to coarse flakes will be destined to high-purity, high-
margin specialty and traditional markets at a LOM average price of C$ 2,135 per tonne. While
fine to intermediate flakes will be transformed into coated spherical purified graphite (“CSPG”)
at the Phase-2 Bécancour Battery Material Plant for sales as anode material for lithium-ion
battery applications at a LOM average price of C$ 11,540 per tonne. A portion of jumbo flakes
will also undergo refinement at the Bécancour Battery Material Plant to produce purified jumbo
flakes for niche applications such as heat dissipators in 5G technologies and bipolar plates in
hydrogen fuel cells. By-products from this facility will also be sold to optimize the Bécancour
basket price.
Selling prices were calculated using forecasts provided by Benchmark Mineral Intelligence, an
IOSCO-regulated price reporting agency and market intelligence publisher for the lithium-ion
battery to EV supply chain. They were estimated for the North American market where the
Company is expected to have competitive advantages over international producers, namely its
carbon-neutral footprint, multimodal logistical base, stable political jurisdiction and exclusion
from U.S. import tariffs on graphite.
Pressure caused by gigafactories development across the world, limited production capacity
impacted by Chinese pandemic measures and turbulent logistics is reflected in the year-over-year
flake graphite price increase of 37% (Benchmark Mineral Intelligence, May 2022). The global
lithium-ion battery production capacity pipeline to 2031 now reaches 6,660 GWh, driving
associated projections for graphite demand to 7,993,000 tpa, the largest of all battery metals.
Mineral Resource and Reserves
The mining property (the “Mining Property” or the “Tony Block”) presently consists of 159
contiguous map-designated claims totalling 8,266.42 hectares (“ha”) wholly owned (100%) by
NMG. The Matawinie Mine project lies within the municipality of Saint-Michel-des-Saints,
Québec, Canada, approximately 120 km as the crow flies north of Montréal.
Exploration work on the Mining Property targeted graphite mineralization and consists to date of
airborne geophysics, prospecting, ground TDEM surveying, trenching/channel sampling and
core drilling. Surface and core samples were also collected for metallurgical and geomechanical
tests. Exploration work uncovered significant crystalline flake graphite mineralization ultimately
leading to the identification of Mineral Resources and Reserves.
Mineral Resources have been estimated for the West Zone of the Mining Property. These
Mineral Resources are based on 8,274 assay intervals collected from 27,888.24 m of core drilling
and three (3) surface trenches providing 207 channel samples. Proper quality control measures,
including the insertion of duplicate, blank and standard samples, were used throughout the
exploration programs and returned within acceptable limits.
Table 2: Current Pit-Constrained Mineral Resource Estimate for the West Zone1
Mineral Resource Category2 Current Resource (May 20, 2022) 7
Tonnage (Mt)5,6 Grade (% Cg)3 Contained Graphite (Mt)
Measured 28.5 4.28 1.22
Indicated 101.8 4.26 4.33
Measured + Indicated 130.3 4.26 5.55
Inferred4 23.0 4.28 0.98
1. The Mineral Resources provided in this table were estimated by Yann Camus, P.Eng. SGS of Canada Inc. -
Geological Services (“SGS Geological Services”) using current Canadian Institute of Mining, Metallurgy
and Petroleum (“CIM”) Standards on Mineral Resources and Reserves, Definitions and Guidelines.
2. Mineral Resources that are not Mineral Reserves have not demonstrated economic viability. Additional
trenching and/or drilling will be required to convert Inferred and Indicated Mineral Resources to Measured
Mineral Resources. There is no certainty that any part of a Mineral Resource will ever be converted into
Reserves.
3. All analyses used for the Resource Estimates were performed by ALS Minerals Laboratories and delivered
as graphitic carbon (“% Cg”), internal analytical code C-IR18.
4. Inferred Mineral Resources represent material that is considered too speculative to be included in economic
evaluations. Additional trenching and/or drilling will be required to convert Inferred Mineral Resources to
Indicated or Measured Mineral Resources. It cannot be assumed that all or any part of the inferred
resources will ever be upgraded to a higher resource category.
5. Current Resource effective May 20, 2022.
6. Mineral Resources are stated at a cut-off grade of 1.78 % Cg.
7. Standards used for this resource update are the same standards produced over the course of the 2018
Feasibility Study (effective as of July 10, 2018 and issued on December 10, 2018) and the Resource
Update (results published March 19, 2020). The difference comes mainly from a newly accessible land
package along the Hydro-Québec power line.
A combined Mineral Resource of the South-East and South-West zones is also present on the
Mining Property. While these deposits are part of the Property, they have not been studied to be
integrated in the Mineral Reserves or the mine plan.
The table below presents the Mineral Reserves which have been estimated for the West Zone of
the Matawinie Deposit.
Table 3: Matawinie Mineral Reserves for the West Zone
Category Tonnage (Mt) Grade (% Cg) Contained Graphite (Mt)
Proven 17.3 4.16 0.7
Probable 44.3 4.26 1.9
Proven & Probable 61.7 4.23 2.6
The Qualified Person for the Mineral Reserve Estimate is Jeffrey Cassoff, P.Eng., of BBA Inc.
The effective date of the estimate is July 6, 2022.
Mineral Reserves were estimated using a graphite concentrate average selling price of C$2,135/tonne, and consider
a 2% royalty, and selling costs of C$47.92/tonne. An average grade of 97% was considered for the graphite
concentrate.
A metallurgical recovery of 93% was used.
A cut-off grade of 2.20% Cg was used.
The strip ratio for the open pit is 1.16 to 1.
The Mineral Reserves are inclusive of mining dilution and ore loss.
The reference point for the Mineral Reserves is the primary crusher.
Totals may not add due to rounding.
Matawinie Mine
The Matawinie Mine will leverage the West Zone deposit with an average production of 103,328
tpa of high-purity graphite concentrate over the LOM. The project demonstrates exceptional
potential due to its significant high-purity Mineral Reserves and low-cost operational model,
coupled with a skilled workforce, high-quality infrastructure, including paved roads and
hydroelectricity, as well as the dynamic regional business ecosystem.
The deposit will be mined using conventional open-pit mining methods consisting of drilling,
blasting, loading, and hauling. Estimation of the Mineral Reserves included pit optimization, pit
design, mine scheduling, and the application of modifying factors to the Measured and Indicated
Mineral Resources. To maximize the NPV, mining phases have been designed and incorporated
into the mining sequence to defer waste rock stripping and provide a balanced blended feed
grade for the concentrator over the LOM. The mine plan is successful at achieving the targeted
concentrate production with a strip ratio of 1.16:1 and an average grade of 4.23% Cg over the
25-year LOM.
A concentrator will be built adjacent to the pit. The concentrator was designed based on the
results from the metallurgical testing at NMG’s Phase-1 mineral processing facility plant and at
external labs. Through crushing, milling, flotation, cleaning, and drying, the ore is concentrated
to attain 97% Cg and classified per flake size. Water recycling is maximized throughout the
process.
Table 4: Graphite Concentrate Size Fraction Proportion
Graphite Concentrate Flakes Size Fraction Proportion
Jumbo (+50 mesh) 14.8%
Coarse (-50+80 mesh) 33.4%
Intermediate (-80+150 mesh) 27.7%
Fine (-150 mesh) 24.1%
Tailings produced by the concentrator will be separated into non-acid generating (“NAG”) and
potentially-acid generating (“PAG”) for co-disposal with waste rock. A co-deposition storage
facility will be located at surface and as of Year 8, tailings will be returned to the pit using the
co-disposal system. The deposit will be mined from south to north to ensure adequate space is
available for in-pit backfilling. See Environmental Design & Carbon Neutrality Commitment
section for additional information.
As part of its electrification strategy, NMG is committed to having both heavy equipment used
for mining operations and ore concentration and processing activities become fully electric
within the first five years of production. NMG’s electrification plan is not presented in this Study
as active planning and development are ongoing with Caterpillar Inc., which is expected to
supply the equipment using their Job Site Solution service model. With this model, NMG would
pay for machine use on an hourly basis which includes machine supply and maintenance (parts
and service) and a fleet management system. Electrical trucks and equipment would be
introduced into the mining fleet as they become available. Projected to be the world’s first all-
electric open-pit mine, the Matawinie Mine could reduce CO2 emissions by over 300,000 tonnes
over the mine’s lifespan.
Table 5: Operational and Economic Highlights of the Matawinie Mine
Parameters
LOM 25 years
Nominal annual processing rate 2.55 M tonnes
Stripping ratio (LOM) 1.16:1
Average grade (LOM) 4.23% Cg
Average recovery 93%
Average annual graphite concentrate production (LOM) 103,328 tonnes
Finished product purity 97% Cg
CAPEX C$ 481 M
Annual OPEX C$ 58 M
OPEX cost per tonne of graphite concentrate C$ 565/tonne
Matawinie average basket price (LOM) C$ 2,135/tonne
All governmental permits and municipal authorizations pertaining to exploration, geotechnical,
hydrogeological, and early preparatory works to date have been obtained. The ministerial decree
authorizing the Matawinie Mine (Decree # 47-2021) was granted by the Québec Government on
January 20, 2021; the latest operational parameters will be presented to governmental authorities
for adjustment.
Early works for the Matawinie Mine started in Q2-2021 with activities related to tree clearing,
construction of the nearly 8-km access road, preparation of the industrial pad, and civil works for
environmental infrastructure.
In striving to limit potential impacts and plan beyond the LOM, the Company has developed the
Matawinie Mine with environmental and social considerations at the forefront. NMG has and
continues to actively engage with the local community and the Atikamekw First Nation. NMG
has signed a collaboration and benefit-sharing agreement with the Municipality of Saint-Michel-
des-Saints (2020) as well as a framework agreement (2018) and a pre-development agreement
(2019) with the Atikamekw First Nation. The Company is actively progressing towards the
elaboration of the impact and benefit agreement with the Atikamekw First Nation for the Phase-2
Matawinie Mine to maximize opportunities for Indigenous workers, contractors, and the
community.
Bécancour Battery Material Plant
NMG’s advanced manufacturing operations will be regrouped at its Phase-2 Bécancour Battery
Material Plant located in Bécancour, Québec, approximately 150 km northeast of Montréal, on
the Saint Lawrence River. The robust local infrastructure provides the Company with a direct
supply of required chemicals in addition to affordable hydroelectricity, a skilled workforce, and a
multi-modal logistical base that includes a major international port in proximity to U.S. and
European markets. Bécancour is rapidly attracting important industrial players in the battery
materials and cell manufacturing space, supported by the Québec Government’s battery hub
strategy. Twenty industrial and commercial projects are planned or under study, including
BASF, GM-Posco, Vale and Nemaska Lithium.
In 2021, NMG purchased a 200,000-m² land in the Bécancour industrial park, adjacent to its
chlorine supplier’s facility – Olin Corporation, to build its integrated manufacturing facility of
anode material for lithium-ion batteries. The property presents no environmental limitations for
construction. It offers all necessary infrastructure to have a safe and direct pipeline of chemical
supply from Olin as well as quick access to rail, port, and road for both importing raw materials
and exporting final products throughout North America and Europe.
Regrouping onsite all beneficiation units, the Bécancour Battery Material Plant is designed to
receive approximately 63,775 tpa of graphite concentrate from the Matawinie Mine to be
transformed into 42,616 tpa of CSPG, 3,007 tpa of purified flakes and 18,384 tpa of by-product
fines, a valuable graphite material.
For CSPG production, the finest flake size fraction graphite concentrate will undergo
micronization and spheronization (“shaping”), purification and coating. A portion of the jumbo
flake production from the Matawinie Mine will be treated onsite through purification only to
produce purified jumbo flakes.
The shaping process, essentially a mechanical transformation, reduces the flake size
(micronization) to D50 of approximately 10 to 20 microns and rounds graphite material
(spheronization) to increase the density of the spherical graphite for battery use. Shaping will
also generate by-product fines to be sold as carbon riser.
NMG’s proprietary carbochlorination purification process elevates graphite materials to
≥99.95% Cg while respecting purity specifications of end-users. The carbochlorination process
involves the injection of chlorine gas into furnaces at high temperatures to remove impurities
contained in the graphite. Leveraging Québec’s abundant, clean, and affordable hydropower, the
Company’s technology avoids using hydrofluoric acid in favor of high temperatures and the
addition of chlor-based reagent, hence providing a greener and more sustainable alternative to
that currently used in traditional anode material production. Production at NMG’s Phase-1
purification facility has demonstrated the performance of this ecotechnology with large-scale
samples produced at 99.99% purity. Piloting is ongoing and set to continue over H2-2022 to
finalize the scope of the purification sector of the plant.
The ultimate beneficiation step, coating is instrumental to battery technology. By applying a
nanometric layer of amorphous carbon on the surface of spheronized purified graphite, coating
helps create a stable electrolyte interface layer in the battery system and increase initial
coulombic efficiency and discharge capacity, thus extending the battery performance over time.
NMG’s coating technology is projected to reduce the energy consumption of this process up to
25% compared to the dominant manufacturing operations, with a minimal environmental
footprint thanks to the Company’s access to clean hydropower and its strong ESG operational
parameters. The module built at NMG’s Phase-1 plant will be replicated and scaled up for the
Phase-2 Bécancour Battery Material Plant. The technology provides versatility for the use of
different precursors as research and development (“R&D”) advances.
Piloting of all Phase-1 battery material modules is ongoing to produce large samples for battery
manufacturers in order to accelerate the commercial qualification of the battery-grade
commercial products.
Table 6: Operational and Economic Highlights of the Bécancour Battery Material Plant
Parameters
Annual throughput 63,775 tonnes
CSPG yield ≥70%
Annual CSPG production 42,616 tonnes
Annual purified jumbo flake production 3,007 tonnes
Annual by-product fines production 18,384 tonnes
Finished product purity ≥99.95%
CAPEX C$ 923 M
Annual OPEX C$ 136 M
OPEX cost per tonne of CSPG throughput 1 C$ 2,249/tonne
Bécancour average basket price C$ 8,172/tonne
1. Excludes costs for the Matawinie Mine graphite concentrate feedstock
The Bécancour Battery Material Plant will be organized by process sectors, with dedicated
facilities for shaping, purification, and coating, plus support services. This modular facility is
designed with a capacity to expand as demand increases in battery and specialty markets.
Environmental Design & Carbon Neutrality Commitment