SCHEDULE: Nouveau Monde Graphite: Canada Growth Fund Ups Stake

Canada Growth Fund Inc. has increased its investment in Nouveau Monde Graphite Inc. by agreeing to purchase an additional 44,452,460 common shares for approximately $81.8 million.

Summary

• Canada Growth Fund Inc. (CGF) has entered into a new subscription agreement with Nouveau Monde Graphite Inc. (NMG) to purchase an additional 44,452,460 common shares.
• This private placement is valued at approximately US$81,792,526.40 and is subject to NMG shareholder approval.
• This new investment represents approximately 27.7% of NMG's then-outstanding common shares, based on 160,761,539 shares outstanding as of December 31, 2025.
• CGF previously acquired 39,682,538 common shares through a private placement and warrant exercise for US$25,000,000, representing about 23.1% of outstanding shares at that time.
• Following this new agreement, CGF's total beneficial ownership, including shares issuable upon warrant exercise, will be 39,682,538, representing 22.0% of the class.
• CGF intends to monitor its investment and may adjust its holdings or strategy based on market conditions and other factors.
• CGF has rights to access NMG's books and records and has the right to appoint one board member and one board observer.
• CGF intends to nominate a director candidate for election at NMG's 2026 annual general meeting.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a positive development due to the significant capital injection and increased strategic interest from Canada Growth Fund, although the reliance on shareholder approval introduces a degree of uncertainty.

Positives

• Significant capital infusion of approximately $81.8 million into Nouveau Monde Graphite.
• Increased stake by Canada Growth Fund Inc. to 22.0% (including warrants), indicating strong confidence.
• CGF's intention to nominate a director suggests active engagement and potential for strategic influence.
• CGF's rights to information and board representation provide oversight and potential for value enhancement.

Negatives

• The transaction is subject to NMG shareholder approval, which could prevent the capital raise.
• The increased stake by a single investor could lead to concerns about concentrated ownership.
• The filing indicates CGF may increase or decrease its holdings, suggesting potential future selling pressure.

Risks

• The primary risk is the potential failure to obtain NMG shareholder approval for the private placement.
• Market conditions and other investment considerations could lead CGF to dispose of its securities.
• Potential for future dilution if NMG issues more shares.
• The company's strategy and future plans are subject to ongoing evaluation by CGF.

Future Outlook

Canada Growth Fund Inc. will continue to evaluate its investment in Nouveau Monde Graphite Inc. and may adjust its holdings or investment strategy based on market conditions, liquidity requirements, and other relevant investment considerations. CGF intends to nominate a director candidate for election at NMG's 2026 annual general meeting.

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 in NMG or may change their investment strategy as regards to NMG.
• The Reporting Persons intend to monitor and evaluate the investment on an ongoing basis and expect regularly to review and consider alternative ways of maximizing its return on such investment, depending on prevailing market conditions, other investment opportunities, liquidity requirements or other investment considerations the Reporting Persons deem relevant.
• 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 of NMG only to the extent such discussions do not create a 'group' within the meaning of Section 13(d)(3) of the Exchange Act.
• CGF has the right to appoint one member of the board and one board observer.
• CGF intends to nominate one director candidate to stand for election at NMG's 2026 annual general meeting of shareholders.

Industry Context

StockSavvy.ai notes that this filing reflects significant capital deployment into the graphite sector, a critical component for battery technologies and electric vehicles. Nouveau Monde Graphite is positioning itself as a key player in North American graphite production, and this substantial investment from Canada Growth Fund underscores the strategic importance and perceived potential of such ventures.

Management Changes

Corporate Governance

Stakeholder Impact

• Shareholders: Potential for increased share value if the capital raise is approved and leads to successful project development. Also, potential dilution if more shares are issued in the future. The nomination of a new director may influence corporate strategy.
• Employees: Increased capital could support project development, potentially leading to job creation and operational expansion.
• Creditors: Improved financial standing of NMG due to capital infusion may strengthen its ability to meet obligations.
• Suppliers: Potential for increased business opportunities if NMG expands its operations.

Next Steps

• Nouveau Monde Graphite shareholders will vote on the proposed private placement.
• Canada Growth Fund Inc. intends to nominate a director candidate for election at NMG's 2026 annual general meeting.
• CGF will continue to monitor and evaluate its investment in NMG.

Key Dates

Recommendation

The filing indicates a significant capital raise and increased stake by a strategic investor, which is positive. However, the transaction is contingent on shareholder approval, and the investor reserves the right to increase or decrease its holdings. This creates a degree of uncertainty, making a 'hold' recommendation appropriate until shareholder approval is confirmed and the strategic implications are clearer.

Keywords

Nouveau Monde Graphite, Canada Growth Fund, Schedule 13D, Private Placement, Common Shares, Investment, Shareholder Approval, Warrants, Graphite, Mining, SEC Filing