F-10: Nouveau Monde Graphite Files $350M Shelf Prospectus

Nouveau Monde Graphite Inc. filed a shelf prospectus for up to $350 million in securities, detailing project advancements, commercial agreements, and financing efforts for its graphite and battery material projects.

Summary

• Filed a Form F-10 shelf prospectus to offer up to US$350 million in various securities (common shares, debt, subscription receipts, warrants, units) from time to time.
• The Matawinie Mine Project (Phase 2) is advancing towards a Final Investment Decision (FID) with a completed 2025 Feasibility Study, showing an after-tax NPV of $238 million and an IRR of 15.8% over a 25-year mine life.
• The Matawinie Mine is projected to produce a nominal 105,882 tonnes per year of graphite concentrate at an average operating cost of $419 per tonne.
• Commercial arrangements potentially cover almost 100% of the Matawinie Mine's future flake graphite volumes, including agreements with the Government of Canada (15,000 tpy take-or-pay, plus potential 15,000 tpy for allied countries) and Traxys North America LLC (20,000 tpy, including 10,000 tpy take-or-pay).
• The company is prioritizing the development of a 13 ktpy Battery Material Plant as an initial milestone, with a conceptual design and Class 5 cost estimate completed.
• A multiyear binding offtake agreement with Panasonic Energy Co., Ltd. aims to advance the production of 13,000 tpy of active anode material.
• Negotiations are ongoing with a third-party anode manufacturer for up to 30,000 tpy of graphite concentrate from Matawinie, potentially supporting General Motors' needs.
• General Motors' previous supply and subscription agreements were terminated, and GM will not proceed with a second tranche equity investment; a non-binding MOU is in place to evaluate future supply and potential warrant transfer.
• The Uatnan Mining Project (Phase 3) is targeted for future expansion, aiming for 500,000 tpy of graphite for anode material, with a feasibility study to be launched following a positive 2023 PEA.
• The company has received cumulative expressions of interest of approximately $1.6 billion for project financing from potential lenders, customers, and institutional equity investors.
• Cash and cash equivalents were $106,296 as of December 31, 2024, with negative cash flow from operating activities of $51,953 for the same year.
• Pallinghurst Graphite International Limited disposed of 3,213,313 Common Shares between October 1 and November 12, 2025, reducing its beneficial interest.

Sentiment

Score: 7

Explanation: The company has made substantial progress on project feasibility and commercial agreements, securing significant expressions of interest for financing. The Matawinie Mine shows solid economics. However, the termination of the GM agreement, the need to secure a site for the 13 ktpy plant, and the complexities of renegotiating other agreements for the Bcancour plant introduce notable uncertainties and potential delays. The overall sentiment is cautiously optimistic, reflecting the advanced stage of project development balanced against inherent execution and financing risks.

Positives

• Completion of the 2025 Feasibility Study for the Matawinie Mine Project, confirming technical feasibility and economic viability with an after-tax NPV of $238 million and an IRR of 15.8%.
• Secured commercial arrangements potentially covering almost 100% of the Matawinie Mine's future flake graphite volumes, including take-or-pay commitments from the Government of Canada and Traxys North America LLC.
• Binding multiyear offtake agreement with Panasonic Energy Co., Ltd. for 13,000 tpy of active anode material, with Panasonic Energy reiterating intent for additional equity investment.
• Cumulative expressions of interest for project financing totaling approximately $1.6 billion from potential lenders, customers, and institutional equity investors.
• Matawinie Mine Project referred to the Major Projects Office (MPO) for streamlined federal regulatory approvals, indicating government support.
• Ongoing R&D collaborations with universities and a $500,000 research grant from MRNF for next-generation anode material development.
• Uplisting of Common Shares to the Toronto Stock Exchange (TSX) effective January 20, 2025, enhancing market visibility.

Negatives

• Termination of previous supply and subscription agreements with General Motors, resulting in GM not proceeding with a second tranche equity investment.
• The 13 ktpy Battery Material Plant requires securing an existing site and building, with no assurance of success on commercially reasonable terms or at all, potentially impacting timing and feasibility.
• Development of the Bcancour Battery Material Plant requires a comprehensive review and potential termination or renegotiation of existing commercial offtake agreements, including the GoC Supply Term Sheet, which could impact the project if not successful.
• Anticipates continued negative cash flow from operating activities until commercial production is achieved at the Matawinie Mine Project and/or Battery Material Plants.
• The economic viability of the Matawinie Mine Project remains vulnerable to the USD/CAD exchange rate and future market prices.
• Pallinghurst Graphite International Limited reduced its beneficial interest in the company by disposing of 3,213,313 Common Shares.

Risks

• New Mining and Industrial Operations: Risks associated with establishing or expanding new mining and transformation operations, including timing and cost of construction, availability of skilled labor and equipment, obtaining governmental approvals, potential opposition from local groups, and increases in construction/operating costs.
• 13 ktpy Battery Material Plant Specific Risks: Inability to secure a suitable existing site and building on commercially reasonable terms, technical/operational challenges with retrofitting, regulatory/permitting hurdles, physical limitations of the site, and impact on operational efficiency.
• Bcancour Battery Material Plant Capacity Risks: Inability to successfully renegotiate or terminate existing offtake agreements (e.g., GoC Supply Term Sheet) on favorable terms, or conclude new agreements in a timely manner, which could materially impact the project.
• Economic Assessment Disclosure: Reliance on assumptions in feasibility studies and PEAs, with no assurance of accuracy; vulnerability to future product prices, production costs, inflation, labor shortages, supply chain disruptions, and global economic conditions.
• Dependence on Matawinie Mine and Battery Material Plants: Any adverse condition affecting these projects or their revenues/costs could materially impact financial performance and require additional financing.
• Uncertainty Relating to Future Production Estimates: Actual production may vary from estimates due to factors like graphite grade, tonnage, dilution, metallurgical characteristics, revisions to mine plans, mining hazards, natural phenomena, labor shortages, and community opposition.
• Risks Related to Future Sale of Graphite Products: No assurance of securing additional sales agreements or that contract counterparties will purchase production at agreed prices/quantities. Conditions precedent in existing agreements (GoC, Traxys, Panasonic Energy) may not be satisfied, leading to termination.
• GM Warrants Transfer: No assurance that regulatory approvals will be obtained to amend the expiry date of the 12,500,000 warrants previously issued to GM, which could prevent their transfer to a third-party supplier and adversely affect strategic arrangements.
• Potential Loss of Investment: Investment is speculative due to the early stage of projects and no assurance of commercial production or revenues.
• No Market for Debt Securities, Subscription Receipts, Warrants or Units: No assurance of an active or liquid trading market for these securities, potentially affecting pricing and liquidity.
• Discretion in Use of Proceeds: Broad discretion over the use of net proceeds from offerings, which may not align with investor expectations or increase market value.
• No Current Plans to Pay Cash Dividends: Investors may only receive returns through share price appreciation.
• Market Price Fluctuations: Share price subject to various factors, including financial condition, market interest, public float size, and potential delisting.
• Prevailing Interest Rates: Market price/value of debt securities will decline as interest rates rise.

Future Outlook

The company aims to become an integrated producer of carbon-neutral graphite concentrate and anode material for EVs and energy storage. It plans to advance the Matawinie Mine Project to FID and launch construction within approximately 31 months, while prioritizing the 13 ktpy Battery Material Plant as an initial milestone for battery material production. The Uatnan Mining Project is targeted as a Phase-3 expansion to further scale graphite production. The company anticipates continued negative cash flow from operating activities until commercial production is achieved at its key projects.

Management Comments

• "The Corporation aims to become an integrated company developing responsible mining and advanced processing operations to supply the global economy with carbon-neutral graphite concentrate and anode material to power electric vehicles (EV) and energy storage systems."
• "The Corporation is carrying out a phased-development plan for its Matawinie Mine and its Battery Material Plants... to derisk its projects and advance towards FID in view of commercial operations."
• "The Corporation intends to prioritize, as an initial milestone for the Battery Material Plants, the development of the 13 ktpy Battery Material Plant."
• "The Corporation is now preparing for either a combined FID encompassing the Matawinie Mine and the 13 ktpy Battery Material Plant or for a sequenced FID starting with the Matawinie Mine and followed by the 13 ktpy Battery Material Plant, subject to their respective technical, commercial and financing parameters."
• "The QPs of the 2025 Matawinie Mine Feasibility Study consider that, within their expertise, the Matawinie Mine is sufficiently robust to warrant moving to the development phase."

Industry Context

The company positions itself to serve the growing demand for lithium-ion battery components in electric vehicles, energy storage, and other technology applications. Its focus on green and sustainable graphite, carbon-neutral operations, and supply chain traceability aligns with increasing industry and consumer demand for ESG-compliant materials in the Western World. The development of a local, traceable supply chain in Quebec, Canada, addresses geopolitical risks and supply chain diversification efforts in the battery materials sector.

Comparison to Industry Standards

• The company's financial statements are prepared in accordance with IFRS Accounting Standards, which may not be comparable to U.S. GAAP.
• Mineral reserve and resource estimates are prepared in accordance with Canadian NI 43-101 standards, which differ from SEC disclosure requirements for U.S. companies.
• The company's proposed chemical purification process for battery-grade graphite is a "prevalent chemical purification technology" and "similar process flowsheets are used by several battery material producers in North America and in China."
• The company aims for ESG-oriented operations at its Matawinie Mine, integrating "industry's latest technological innovations, best practices to reduce GHG emissions, sustainable design of infrastructure."
• The company is a member of the Global Battery Alliance, participating in the development of the Battery Passport, indicating alignment with global sustainability and traceability initiatives.

Corporate Governance

Related Party Transactions

• Equity investment of US$50 million by Canada Growth Fund Inc. and the Government of Qubec (via its agent Investissement Qubec) on February 3, 2025.
• Accrued interests owed to Investissement Qubec for the second quarter of 2025 will be paid by the issuance of 178,531 Common Shares at US$1.64 per share.
• Accrued interests owed to Investissement Qubec for the third quarter of 2025 will be paid by the issuance of 106,161 Common Shares at US$2.79 per share.
• Pallinghurst Graphite International Limited, which holds a 2.0% net smelter return (NSR) royalty on the Matawinie Property, disposed of 3,213,313 Common Shares between October 1 and November 12, 2025, at an average price of USD$3.62 per share.

Stakeholder Impact

• Shareholders: Potential dilution from future securities offerings, impact of project development success/delays on share price, no current plans for cash dividends.
• Employees: Mine workforce for Matawinie Mine to peak at 78 employees in full production; concentrator and administration personnel amount to 66, totaling 144 full-time employees.
• Customers: Commercial agreements with GoC, Traxys, and Panasonic Energy aim to secure long-term supply of graphite products and active anode material.
• Local Communities/First Nations: Collaborative agreement with the Municipality of Saint-Michel-des-Saints and an Impact and Benefit Agreement (IBA) with the Atikamekw First Nation of Manawan for Matawinie Mine. A Monitoring Committee is in place for environmental and social surveillance.
• Creditors/Lenders: Project financing efforts with potential lenders, with expressions of interest totaling $1.6 billion.
• Suppliers: Master Fleet Services Agreement with Caterpillar for mining equipment.

Next Steps

• Advance detailed engineering, construction planning, and procurement activities for the Matawinie Mine Project.
• Progress project financing structure with financial stakeholders to reach a Final Investment Decision (FID) for the Matawinie Mine Project.
• Continue optimizing processes, products, and operational practices for battery material production using Phase-1 demonstration plants and third-party facilities.
• Refine environmental performance and operational parameters of chemical purification technology.
• Advance engineering and project financing activities for the 13 ktpy Battery Material Plant to reach FID and launch construction.
• Secure an existing site and building for the 13 ktpy Battery Material Plant.
• Undertake a comprehensive review of existing commercial offtake agreements for the Bcancour Battery Material Plant, potentially amending or terminating some.
• Launch a feasibility study for the Uatnan Mining Project.
• Seek necessary regulatory approvals to amend the expiry date of the 12,500,000 warrants previously issued to GM to facilitate potential transfer to a third-party supplier.
• Formalize participation of financial partners in project financing based on the 2025 Matawinie Mine Feasibility Study and AACE Project Cost Estimates.

Key Dates

Recommendation

The company is at a critical juncture, transitioning from development to commercial operations for its Matawinie Mine and advancing its Battery Material Plants. The completed feasibility study for Matawinie shows positive economics, and the company has secured substantial commercial interest and expressions of financing. However, the termination of the GM agreement and the need to secure a site for the initial 13 ktpy Battery Material Plant introduce significant execution risks and uncertainties. While the long-term potential in the EV battery market is strong, the immediate future involves substantial capital expenditure, complex project execution, and reliance on successful financing and regulatory approvals. A "hold" recommendation reflects the balance between the promising project fundamentals and the considerable risks and uncertainties that need to be navigated before commercial production and sustained profitability are achieved. Investors should monitor progress on FID, financing, and site acquisition closely.

Keywords

Graphite, Battery Materials, SEC Filing, F-10, Nouveau Monde Graphite, Matawinie Mine, Battery Material Plants, Uatnan Mining Project, Lithium-ion Batteries, Electric Vehicles, Mining, Mineral Resources, Feasibility Study, Offtake Agreements, Project Financing, ESG, Canada, Quebec, SEC, Shelf Prospectus