NMG, Panasonic Energy and Mitsui Announce Offtake and Strategic Partnership Supporting the Supply of Active Anode Material plus US$50 Million Private Placement by Mitsui, Pallinghurst and Investissement Québec + Framework agreement between NMG, Panasonic Energy and Mitsui for the development
NMG, Panasonic Energy and Mitsui Announce Offtake and Strategic
Partnership Supporting the Supply of Active Anode Material plus US$50
Million Private Placement by Mitsui, Pallinghurst and Investissement Québec
+ Framework agreement between NMG, Panasonic Energy and Mitsui for the development
and further commercialization of NMG’s integrated anode material operations in Québec,
Canada
+ Signed memorandum of understanding to confirm intentions for a multi-year offtake
agreement between NMG and Panasonic Energy for a significant portion of NMG’s active
anode material out of NMG’s fully integrated “ore-to-anode-material” facilities
+ A total investment of US$50 million from Mitsui, Pallinghurst and Investissement
Québec will support the next operational milestones for the project financing activities on
both the Matawinie Mine and the Bécancour Battery Material Plant
+ Shareholders and analysts are invited to attend an Investor Briefing on Thursday,
October 20 at 10:30 a.m. ET hosted by NMG’s Management Team via webcast:
https://us06web.zoom.us/webinar/register/WN_LxVC2YirS8izfF7UIneVzg
MONTRÉAL--(BUSINESS WIRE)--October 20, 2022--Nouveau Monde Graphite Inc. (“NMG”
or the “Company”) (NYSE: NMG, TSX.V: NOU), Mitsui & Co., LTD (“Mitsui”) (TYO: 8031)
and Panasonic Energy Co., Ltd. (“Panasonic Energy”), a wholly owned subsidiary of Panasonic
Holdings Corporation (“Panasonic”) (TYO: 6752), have entered into a Framework Agreement
establishing the terms of the commercial relationship between the parties to enable the next
development steps of NMG’s ore-to-battery-market integrated graphite project in Québec,
Canada. NMG will use the proceeds of the abovementioned investment to work in the upcoming
months on optimizing the feasibility study on NMG’s Phase-2 Commercial integrated operations,
which is available on SEDAR and EDGAR, based on the memorandum of understanding for the
contemplated offtake agreement.
Kazuo Tadanobu, President & CEO of Panasonic Energy, commented: “We are very pleased to
be participating in this strategic partnership with NMG, which will allow us to explore the
possibility of establishing an environmentally friendly supply chain in North America through a
completely new integrated anode production in Canada. As a manufacturer of EV lithium-ion
batteries with the largest share of the North American market, given our leading technology and
depth of experience, we aim to continue driving the growth of the industry and accelerating
toward a decarbonized society.”
Hiroshi Kakiuchi, Managing Officer of Mitsui, added: “We are very excited to be working with
NMG and participating in their mission to establish a stable lithium-ion battery supply chain for
electric vehicles in North America and contribute to the realization of a low-carbon society. In
particular, we are inspired by Eric Desaulniers’ vision to take on the unprecedented challenge of
establishing the whole process of anode material production, from mining to manufacturing,
which is to be completed in North America in an environmentally friendly way.”
Arne H Frandsen, Chair of NMG, said: “NMG is committed to delivering the highest quality
anode material, exclusively mined and produced in North America. The partnership with
Panasonic Energy and Mitsui – two blue-chip leaders of the industry – should further secure our
leading position in the battery materials space. More than ever, we will continue to vigorously
increase our relevance in the North American market, benefitting from U.S. and Canadian
legislation supporting locally produced batteries.”
Eric Desaulniers, Founder, President, and CEO of NMG, reacted: “I am delighted to embark on
this transformative partnership with experienced and industry-leading partners Mitsui and
Panasonic Energy. It is set to provide NMG with a solid commercial foundation for deploying
our Phase-2 Commercial operations. Their participation is a testament to our sound business
model and a lever at this pivotal time to advance our business plan towards establishing what is
projected to become North America’s largest fully integrated natural graphite production.”
Andrew Willis, Co-Chief Executive of The Pallinghurst Group, remarked: “We are proud at
Pallinghurst to have worked with NMG in reaching this critical milestone. The Company’s
commercial model and strong ESG credentials are extremely attractive; we are reiterating our
confidence by reinvesting in NMG’s growth. We are excited for the next chapter as NMG
positions itself as a preferred integrated graphite supplier for the Western battery and EV
market.”
Guy Leblanc, CEO of Investissement Québec, noted: “This investment reflects our commitment
to establishing Québec as a leading North American hub for lithium-ion batteries. Nouveau
Monde Graphite is clearly a key player in this sector and will contribute enormously to the
province's energy transition. Investissement Québec is proud to have supported them in their
growth from the outset and in this new phase of their development.”
Memorandum of Understanding on Offtake Agreement
The strategic transaction comprises a non-binding memorandum of understanding on an offtake
by Panasonic Energy of a significant portion of NMG’s green active anode material out of the
Company’s integrated Phase-2 Commercial production facilities over a multi-year term. While
there can be no assurance that a final offtake agreement with Panasonic Energy will be
completed, NMG and Panasonic Energy will work together in the upcoming months to establish
a definitive offtake agreement.
Convertible Notes
NMG is also pleased to announce that it has entered into unsecured convertible note subscription
agreements with each of Mitsui, Pallinghurst and Investissement Québec pursuant to which
NMG has agreed to issue to each holder an unsecured convertible note (the “Convertible
Notes”), for aggregate gross proceeds of US$50 million (the “Private Placement”). In connection
with the Private Placement, Mitsui will subscribe for US$25 million in Convertible Notes, while
Pallinghurst and Investissement Québec will each subscribe for US$12.5 million.
The Convertible Notes will mature 36 months from the date of issuance (the “Maturity Date”)
and shall bear interest at the higher of 6% per annum and the 90-day average term SOFR
(secured overnight financing rate) plus 4% per annum. Interest will be payable either quarterly in
cash on the last business day of each quarter commencing on December 31, 2022, or NMG may
elect to capitalize interest and settle in fully paid common shares of NMG (“Common Shares”),
subject to TSX Venture Exchange (the “Exchange”) approvals. Should NMG elect to settle
interest in Common Shares, settlement will be at market price (as defined in the Exchange
policies) determined at the quarter end on which such interest became payable.
All or a portion of the principal amount of the Convertible Notes will be convertible at the
election of the holder thereof into units of NMG (a “Convertible Note Unit”) at a price of
US$5.00 per Convertible Note Unit at any time until the Maturity Date. Each Convertible Note
Unit will be comprised of one (1) Common Share and one (1) common share purchase warrant (a
“Warrant”). Each Warrant will entitle the holder thereof to acquire one Common Share at a price
of US$5.70 per Common Share for a period of 24 months from the date of issuance thereof.
The Convertible Notes (and the Common Shares and Warrants issuable upon conversion of the
Convertible Notes, if issued before that period) are subject to a hold period of 4 months and one
day in accordance with relevant regulatory and stock exchange policies.
Closing of the Convertible Notes transaction is expected to occur on or about November 9, 2022,
and is subject to certain customary closing conditions, including obtaining final regulatory
approvals.
Letter Agreements and Investment Agreements
Pursuant to Letter Agreements and/or Investment Agreements, Pallinghurst, Mitsui and
Investissement Québec will be granted certain rights relating to each party’s investment in NMG.
These include certain nomination and anti-dilution rights, and, for Pallinghurst and Mitsui,
certain marketing rights for future sales of NMG’s active anode material.
Framework Agreement
As part of the transaction, a Framework Agreement was signed by NMG, Mitsui and Panasonic
Energy that defines the role and responsibilities of the parties in the coming months, including
optimization of the feasibility study and other important project-related operational milestones.
NMG plans to use the proceeds from the investment to support the finalization of the design,
operation, marketing, and corporate parameters of the Phase-2 Matawinie Mine and Bécancour
Battery Material Plant. The intention is to proceed with project financing and the final
investment decision (“FID”) on both the Matawinie Mine and Bécancour Battery Material Plant
once that optimization phase is completed and all operational variables are well understood.
Based on information available today, NMG anticipates a 28-month construction period
following FID to bring its operations to commercial production. The Framework Agreement and
the Side Letter Agreements/Investment Agreements shall become effective at closing.
Related Party Disclosure
Investissement Québec and Pallinghurst are insiders of the Company and their participation in
the Private Placement and the Investment Agreements and the Letter Agreement constitutes a
“related party transaction” within the meaning of Regulation 61-101 respecting Protection of
Minority Security Holders in Special Transactions (the “Regulation 61-101”) and the TSX
Venture Exchange Policy 5.9 - Protection of Minority Security Holders in Special Transactions.
However, upon receiving confirmation from management of the Corporation and legal counsel
that the exemptions from formal valuation and minority approval requirements provided for
respectively under subsections 5.5(a) and 5.7(1)(a) of Regulation 61-101 can be relied on as
neither the fair market value of the securities issued in favour of related parties nor the fair
market value of the consideration paid for these securities exceed 25% of the Company's market
capitalization, the directors of the Company who had the right to vote have unanimously
supported the issuance of the Convertible Notes and the signature of the Investment Agreements
and the Letter Agreement.
A material change report in respect of those related party transactions will be filed by the
Company but could not be filed earlier than 21 days prior to the closing of the Private Placement
due to the fact that the Private Placement was conditional to the signatures of all the
abovementioned agreements and that this abbreviated period is reasonable and necessary in the
circumstances as the Company wishes to complete these transactions in a timely manner.
NMG’s Active Anode Material
The offtake and strategic partnership covers NMG’s fully integrated operations with a special
interest in the Company’s anode active material which has demonstrated industry-leading
environmental footprint in a recent life cycle assessment. NMG’s planned all-electric operations
powered by renewable energy combined with clean processing technologies are set to generate
advanced materials with an exceptionally low climate change impact, in line with global
decarbonization efforts.
Complementary Information
NMG shareholders and analysts are invited to attend a webcast Investor Briefing on Thursday,
October 20, 2022, at 10:30 a.m. ET. Hosted by President and CEO Eric Desaulniers with the
participation of NMG’s Management Team, the briefing will entail a technical presentation
followed by a question-and-answer session. Registration should be completed prior to the start of
the briefing at: https://us06web.zoom.us/webinar/register/WN_LxVC2YirS8izfF7UIneVzg.
An interview with Eric Desaulniers shot at NMG’s Phase-1 plant is also available for viewing
here: https://youtu.be/5SVPI4mQLMA. Members of the media may download high-resolution
files at https://we.tl/t-TNJhUOdR6D and make additional interview or information requests via
Julie Paquet, Vice President, Communications & ESG Strategy at NMG.
About Panasonic Energy
Panasonic Energy established in April 2022 as part of the Panasonic Group's switch to an
operating company system, provides innovative battery technology-based products and solutions
globally. Through its automotive lithium-ion batteries, storage battery systems and dry batteries,
the company brings safe, reliable, and convenient power to a broad range of business areas, from
mobility and social infrastructure to medical and consumer products. Panasonic Energy is
committed to contributing to a society that realizes happiness and environmental sustainability,
and through its business activities the company aims to address societal issues while taking the
lead on environmental initiatives. For more details, please visit
www.Panasonic.com/global/energy
About Mitsui
Mitsui & Co., Ltd. (TYO: 8031.JP) is a global trading and investment company with a
diversified business portfolio that spans approximately 63 countries in Asia, Europe, North,
Central & South America, The Middle East, Africa and Oceania.
Mitsui has about 5,500 employees and deploys talent around the globe to identify, develop, and
grow businesses in collaboration with a global network of trusted partners. Mitsui has built a
strong and diverse core business portfolio covering the Mineral and Metal Resources, Energy,
Machinery and Infrastructure, and Chemicals industries.
Leveraging its strengths, Mitsui has further diversified beyond its core profit pillars to create
multifaceted value in new areas, including innovative Energy Solutions, Healthcare & Nutrition
and through a strategic focus on high-growth Asian markets. This strategy aims to derive growth
opportunities by harnessing some of the world’s main mega-trends: sustainability, health &
wellness, digitalization and the growing power of the consumer.
Mitsui has a long heritage in Asia, where it has established a diverse and strategic portfolio of
businesses and partners that gives it a strong differentiating edge, provides exceptional access for
all global partners to the world’s fastest growing region and strengthens its international
portfolio.
For more information on Mitsui & Co’s businesses visit, www.Mitsui.com
About Nouveau Monde Graphite
NMG is striving to become a key contributor to the sustainable energy revolution. The Company
is working towards developing a fully integrated source of carbon-neutral battery anode material
in Québec, Canada for the growing lithium-ion and fuel cell markets. With low-cost operations
and enviable ESG standards, NMG aspires to become a strategic supplier to the world’s leading
battery and automobile manufacturers, providing high-performing and reliable advanced
materials while promoting sustainability and supply chain traceability. www.NMG.com
Subscribe to our news feed: https://NMG.com/investors/#news
Cautionary Note Regarding Forward-Looking Information
All statements, other than statements of historical fact, contained in this press release including,
but not limited to those describing the timeline of the initiatives described in this press release,
the entering into a definitive offtake agreement, the closing of transactions described in this
press release, the results of the optimized feasibility study, the intended production of eco-
friendly advanced materials, the Company’s commitments and initiatives outlined in the press
release, the intended results of the initiatives described in this press release, the positive impact
of the foregoing on project economics, the Company’s objective to be North America’s largest
fully integrated natural graphite production, the Company’s relationship with its stakeholders,
market trends and those statements which are discussed under the “About Nouveau Monde
Graphite” paragraph and elsewhere in the press release which essentially describe the
Company’s outlook and objectives, constitute “forward-looking information” or “forward-
looking statements” (collectively, “forward-looking statements”) within the meaning of
Canadian and United States securities laws, and are based on expectations, estimates and
projections as of the time of this press release. Forward-looking statements are necessarily
based upon a number of estimates and assumptions that, while considered reasonable by the
Company as of the time of such statements, are inherently subject to significant business,
economic and competitive uncertainties and contingencies. These estimates and assumptions
may prove to be incorrect. Moreover, these forward-looking statements were based upon various
underlying factors and assumptions, including the current technological trends, the business
relationship between the Company and its stakeholders, the ability to operate in a safe and
effective manner, the timely delivery and installation of the equipment supporting the production,
the Company’s business prospects and opportunities and estimates of the operational
performance of the equipment, and are not guarantees of future performance.
Forward-looking statements are subject to known or unknown risks and uncertainties that may
cause actual results to differ materially from those anticipated or implied in the forward-looking
statements. Risk factors that could cause actual results or events to differ materially from current
expectations include, among others, delays in the scheduled delivery times of the equipment, the
ability of the Company to successfully implement its strategic initiatives and whether such
strategic initiatives will yield the expected benefits, the availability of financing or financing on
favorable terms for the Company, the dependence on commodity prices, the impact of inflation
on costs, the risks of obtaining the necessary permits, the operating performance of the
Company’s assets and businesses, competitive factors in the graphite mining and production
industry, changes in laws and regulations affecting the Company’s businesses, political and
social acceptability risk, environmental regulation risk, currency and exchange rate risk,
technological developments, the impacts of the global COVID-19 pandemic and the
governments’ responses thereto, and general economic conditions, as well as earnings, capital
expenditure, cash flow and capital structure risks and general business risks. A further
description of risks and uncertainties can be found in NMG’s Annual Information Form dated
March 22, 2022, including in the section thereof captioned “Risk Factors”, which is available
on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. Unpredictable or unknown
factors not discussed in this Cautionary Note could also have material adverse effects on
forward-looking statements.
Many of these uncertainties and contingencies can directly or indirectly affect, and could cause,
actual results to differ materially from those expressed or implied in any forward-looking
statements. There can be no assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ materially from those anticipated in
such statements. Forward-looking statements are provided for the purpose of providing
information about management’s expectations and plans relating to the future. The Company
disclaims any intention or obligation to update or revise any forward-looking statements or to
explain any material difference between subsequent actual events and such forward-looking
statements, except to the extent required by applicable law.
The market and industry data contained in this press release is based upon information from
independent industry publications, market research, analyst reports and surveys and other
publicly available sources. Although the Company believes these sources to be generally
reliable, market and industry data is subject to interpretation and cannot be verified with
complete certainty due to limits on the availability and reliability of raw data, the voluntary
nature of the data-gathering process and other limitations and uncertainties inherent in any
survey. The Company has not independently verified any of the data from third-party sources
referred to in this press release and accordingly, the accuracy and completeness of such data is
not guaranteed.
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 release.
Further information regarding the Company is available in the SEDAR database
(www.sedar.com), and for United States readers on EDGAR (www.sec.gov), and on the
Company’s website at: www.NMG.com
This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall
there be any sale of the securities in any state in which such offer, solicitation or sale would be
unlawful. The securities being offered have not been, nor will they be, registered under the
United States Securities Act of 1933, as amended (the "U.S. Securities Act") and may not be
offered or sold to, or for the account or benefit of, persons in the United States or U.S. persons
absent registration or an applicable exemption from the registration requirements of the U.S.
Securities Act and applicable state securities laws. "United States" and "U.S. person" are as
defined in Regulation S under the U.S. Securities Act.
Contacts
MEDIA
Julie Paquet
VP Communications & ESG Strategy
+1-450-757-8905 #140
INVESTORS
Marc Jasmin
Director, Investor Relations
+1-450-757-8905 #993