Nouveau Monde Graphite Eyes Bécancour Decision as Matawinie Build Advances

Key Points

• Matawinie construction is advancing on schedule and budget, with commissioning targeted by the end of 2028 and planned annual production of 106,000 metric tons. The project has offtake support from Panasonic Energy, Traxys and the Canadian government.
• Nouveau Monde is targeting a final investment decision for its Bécancour battery-anode-material facility within the next few months. An adjacent brownfield acquisition could reduce capital costs and accelerate development, while Quebec’s low-cost hydroelectricity may support competitiveness with Chinese suppliers.
• The company reported CAD 461 million in cash and CAD 12.5 million in funded debt, saying Matawinie’s construction financing is secured. Longer term, its Uatnan project could offer up to five times Matawinie’s potential scale, but management remains focused on executing the initial integrated operation.

Nouveau Monde Graphite NYSE: NMG said it is advancing construction of its Matawinie graphite mine in Quebec while targeting a final investment decision for its Bécancour battery-anode-material facility within the next few months.

Marc Jasmin, the company’s director of investor relations, outlined the company’s strategy during a Virtual Investor Conferences presentation hosted by OTC Markets. Nouveau Monde is pursuing an integrated model that combines graphite mining with the processing of battery anode materials in Quebec.

The Matawinie mine, located roughly two hours north of Montreal, is designed for annual production of 106,000 metric tons, according to Jasmin. Construction began in May and is proceeding on schedule and budget, he said. The company aims to commission the mine by the end of 2028, followed by an expected six-month ramp-up period.

About 25% of Matawinie’s planned production is intended for processing at the company’s proposed Bécancour facility, which would produce battery anode material for Panasonic Energy’s De Soto, Kansas plant and potentially Panasonic’s operations associated with Tesla in Nevada, Jasmin said.

Offtakes and financing support construction plans

Jasmin said the Matawinie project is supported by offtake arrangements with Panasonic Energy, commodities trader Traxys and the Canadian government. Panasonic’s arrangement relates to battery anode material, while Traxys is associated with the refractory-brick market. The Canadian government’s agreement is intended to help serve smaller, higher-margin graphite customers across the G7, he said.

The company has also received strategic investments from Panasonic, Eni, the Canada Growth Fund and Quebec-related government entities. Eni invested $70 million in a May financing priced at $1.84 per share and holds about a 12% stake, Jasmin said. He added that Eni and Nouveau Monde signed a letter of intent to explore potential supply opportunities involving Eni’s battery-material joint ventures in Italy.

Jasmin said Nouveau Monde had CAD 461 million in cash as of June 31, while its funded debt totaled $12.5 million. He said the company had obtained the equity and committed debt required for Matawinie’s construction.

The company estimates Matawinie capital expenditures at CAD 421 million, with an additional CAD 53 million included for potential cost escalation at lenders’ request, according to Jasmin. He cited disclosed guidance of CAD 139 million in revenue, CAD 44 million in operating expenses and CAD 95 million in annual EBITDA once the mine reaches a 2029 run rate.

Battery materials plant and future expansion

Nouveau Monde is targeting a final investment decision for its Bécancour processing plant in the coming months. Jasmin said the company acquired an adjacent brownfield facility, which it believes could reduce capital costs and shorten development timing for the project.

He said Quebec’s low hydroelectric power costs could help the company compete with Chinese suppliers on operating costs, though he acknowledged that capital costs in North America and Europe are higher. The company has emphasized its potential role as a North American supply source as customers seek to diversify graphite procurement away from China.

China controls a substantial portion of global graphite mining and more than 95% of uncoated spherical graphite production used in lithium-ion batteries, Jasmin said. He argued that Nouveau Monde could gain a first-mover advantage if it becomes one of the first large-scale graphite producers in North America.

Jasmin also said the company is evaluating additional revenue opportunities from its tailings, including potential sulfur-related products. He characterized the work as preliminary and said third parties have expressed interest in potentially funding capital expenditures associated with such a project.

Uatnan project provides longer-term optionality

Beyond Matawinie, Nouveau Monde owns the Uatnan graphite project, acquired from Mason Graphite for $21 million on an enterprise-value basis. Jasmin said the asset was purchased both to support potential customer growth and to protect the company’s integrated North American business model from potential competitors.

He said Uatnan could ultimately be up to five times larger than Matawinie. The project was initially designed for production of 50,000 tons over 240 years, but Nouveau Monde has considered a larger 500,000-ton operation over 24 years to capture greater economies of scale.

For now, Jasmin said the company’s primary focus remains execution at Matawinie and progress toward a decision on Bécancour. He said Nouveau Monde plans to evaluate future expansion, including possible additional brownfield facilities in Canada or Europe, after establishing its initial integrated graphite operation.

About Nouveau Monde Graphite (NYSE:NMG)

Nouveau Monde Graphite Inc is a Canadian mining and advanced materials company developing an integrated source of graphite for the lithium-ion battery industry. The company is focused on producing graphite concentrate and value-added anode material for use in electric vehicles, energy-storage systems and other clean-technology applications.

Nouveau Monde's principal asset is the Matawinie graphite project near Saint-Michel-des-Saints, Quebec. The company is also developing a battery materials plant in Bécancour, Quebec, designed to process graphite concentrate into anode material, including purified, coated spherical graphite.

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