SCHEDULE: Canada Growth Fund Increases Stake in NMG to 24.1%

Canada Growth Fund Inc. has increased its beneficial ownership in Nouveau Monde Graphite Inc. to 24.1% following the issuance of private placement shares.

Summary

• Canada Growth Fund Inc. (CGF) now beneficially owns 84,134,998 common shares of Nouveau Monde Graphite Inc. (NMG).
• This ownership represents a 24.1% stake in the company.
• The increase follows the issuance of 44,452,460 common shares from a private placement approved by shareholders on May 13, 2026.
• CGF maintains the right to appoint one member to the Board of Directors and one Board observer.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a positive development for the company's liquidity and long-term strategic stability, despite the dilutive impact on existing shareholders.

Positives

• Successful completion of a US$81.79 million private placement, strengthening the company's capital position.
• Strong institutional backing from the Canada Growth Fund, a federal investment vehicle.
• Formalized board representation with the election of Hubert T. Lacroix as a director.

Negatives

• Significant dilution of existing shareholders due to the issuance of over 44 million new shares.
• Increased concentration of ownership in a single institutional investor.

Risks

• Market volatility affecting the value of the investment.
• Potential for future changes in investment strategy by the reporting persons.
• Regulatory and compliance risks associated with maintaining a 24.1% stake in a publicly traded entity.

Future Outlook

The reporting persons intend to monitor their investment on an ongoing basis and may increase or decrease their holdings based on market conditions, liquidity requirements, or other strategic considerations.

Management Comments

• The Reporting Persons will evaluate their investment in NMG from time to time and may at any time, based on such evaluation, market conditions and other circumstances, increase or decrease their security holdings.
• The Reporting Persons may engage in discussions with management, the board of directors of NMG, other shareholders of NMG and other relevant parties concerning the business, operations, Board composition, management, strategy and future plans.

Industry Context

StockSavvy.ai notes that this transaction highlights the ongoing trend of government-backed investment funds taking significant equity positions in critical mineral projects to secure domestic supply chains for the energy transition.

Comparison to Industry Standards

• The 24.1% stake is a significant 'cornerstone' investor position, common in junior mining companies seeking to de-risk large-scale infrastructure projects.
• The inclusion of board representation and observer rights is standard for institutional investors providing large-scale capital to pre-production mining firms.

Management Changes

Corporate Governance

Stakeholder Impact

• Shareholders: Experience dilution but benefit from the infusion of capital into the company.
• Management: Gains a strategic partner with board representation.
• Creditors: Likely benefit from the strengthened balance sheet.

Next Steps

• Ongoing monitoring of NMG's business and operations by CGF.
• Potential future adjustments to shareholdings based on market conditions.
• Participation in board-level governance through the appointed designee, Hubert T. Lacroix.

Key Dates

Recommendation

The significant capital injection is a positive signal for project viability, but the high level of dilution and the concentration of ownership warrant a cautious 'hold' until further operational milestones are met.

Keywords

Nouveau Monde Graphite, NMG, Canada Growth Fund, Private Placement, Shareholder Dilution, Graphite Mining, Institutional Investment