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

Nouveau Monde Graphite Inc. filed an amended shelf prospectus to offer up to US$350 million in various securities to fund its graphite projects and general corporate purposes.

Summary

• Nouveau Monde Graphite Inc. (NMG) filed an amended shelf prospectus (Form F-10/A) to allow for the offering and issuance of up to US$350,000,000 in common shares, debt securities, subscription receipts, warrants, and units over a 25-month period.
• The proceeds from these sales are intended to fund the construction, commissioning, working capital, and reserves for the Matawinie Mine Project, the Battery Material Plants Project, and the Uatnan Mining Project, as well as for general corporate purposes.
• The 2025 Matawinie Mine Feasibility Study confirms the technical feasibility and economic viability of the Matawinie Mine, with an after-tax NPV (8% discount rate) of US$238 million and an after-tax IRR of 15.8% over a 25-year life of mine.
• Initial capital costs for the Matawinie Mine and Concentrator are estimated at US$421 million, with average annual operating costs of US$44.32 million (US$419/t concentrate).
• NMG is prioritizing the development of a 13 ktpy Battery Material Plant, with an estimated CAPEX of approximately US$213 million (accuracy range of -30%/+50% based on Q3 2025 costs).
• Commercial arrangements potentially cover almost 100% of the future flake graphite volumes from the Matawinie Mine, including agreements with the Government of Canada (GoC) for 15,000 tpy (take-or-pay) and Traxys North America LLC for 20,000 tpy (10,000 tpy take-or-pay).
• A multi-year binding offtake agreement with Panasonic Energy Co., Ltd. for 13,000 tpy of high-capacity active anode material from the 13 ktpy Battery Material Plant is in place.
• Negotiations are ongoing with a third-party anode manufacturer for up to 30,000 tpy of graphite concentrate from Matawinie, potentially supporting General Motors' (GM) needs. The previous supply and subscription agreements with GM were terminated, and GM's 12,500,000 warrants have expired.
• The company continues to experience negative cash flow from operating activities and anticipates this will continue until commercial production is achieved at its main projects.
• NMG is exploring various financing and commercial scenarios, including sequencing financing stages, and has received cumulative expressions of interest from potential lenders, customers, and institutional equity investors of approximately US$1.6 billion for project financing.

Sentiment

Score: 7

Explanation: The filing outlines significant progress in project development and commercial agreements, supported by positive feasibility study results for Matawinie and substantial expressions of interest for financing. However, it also highlights considerable capital requirements, ongoing negative cash flow, and specific risks related to securing sites and renegotiating agreements, which temper the overall positive outlook. The expiration of GM warrants is a notable negative.

Positives

• Registration of a US$350 million shelf prospectus provides flexibility for future capital raises.
• The 2025 Matawinie Mine Feasibility Study confirms technical feasibility and economic viability, with a positive after-tax NPV of US$238 million and IRR of 15.8% over a 25-year life of mine.
• Commercial arrangements potentially cover almost 100% of future flake graphite volumes from the Matawinie Mine.
• Binding offtake agreements are in place with the Government of Canada (15,000 tpy take-or-pay) and Traxys North America LLC (20,000 tpy, including 10,000 tpy take-or-pay) for Matawinie graphite concentrate.
• A binding multi-year offtake agreement with Panasonic Energy Co., Ltd. for 13,000 tpy of high-capacity active anode material from the 13 ktpy Battery Material Plant is secured.
• Cumulative expressions of interest for project financing total approximately US$1.6 billion.
• Hydro-Québec has secured an energy block for the Matawinie Mine, and permits to start construction have been granted.
• Basic and detailed engineering for the Matawinie Mine is estimated at 80% completion.
• The acquisition of the Uatnan Property (Lac Guéret graphite deposit) for a Phase-3 expansion, with a preliminary economic assessment (2023 Uatnan Mining Project Report) aiming for 500,000 tpy graphite production.
• The company was awarded a US$500,000 research grant from the MRNF to develop next-generation active anode material.
• The Matawinie Mine Project was referred to the Major Projects Office (MPO) by the Government of Canada, which aims to streamline federal regulatory approvals.

Negatives

• The company has a history of negative cash flow from operating activities (US$51,953k in 2024, US$39,515k in 2023, US$44,881k in 2022) and expects this to continue until commercial production.
• General Motors (GM) terminated its previously announced supply and subscription agreements, and its 12,500,000 warrants have expired, resulting in the loss of a potential second tranche equity investment.
• The 13 ktpy Battery Material Plant project requires securing an existing site and building, with no assurance of success on commercially reasonable terms or at all, which could materially impact timing and feasibility.
• Development of the Bcancour Battery Material Plant requires a comprehensive review and potential termination/renegotiation of existing commercial offtake agreements (e.g., with GoC) to align with updated production strategy.
• The 13 ktpy Battery Material Plant Estimate is a Class 5 AACE estimate with a wide accuracy range of -30% to +50%, indicating significant cost uncertainty.
• The Matawinie Mine Project's viability is vulnerable to the USD/CAD exchange rate and future market prices.
• The company has no history of revenues from operating activities.
• Pallinghurst Graphite International Limited and Pallinghurst Bond Limited, significant shareholders, disposed of 3,213,313 Common Shares between October 1 and November 12, 2025, reducing their beneficial interest from 15.49% to 13.46% (partially diluted basis).

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 and permits, potential opposition from non-governmental organizations/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.
• AACE Project Cost Estimates: Estimates are based on management expectations and assumptions which may vary, are not NI 43-101 compliant technical reports, and results should not be relied upon for investment decisions due to wide accuracy ranges (-30%/+50% for 13 ktpy plant).
• Bcancour Battery Material Plant Capacity: Need to review, amend, or terminate existing commercial offtake agreements (e.g., GoC Supply Term Sheet) to align with updated production strategy, with no assurance of successful renegotiation or timely new agreements.
• Economic Assessment Disclosure: Assumptions used in feasibility studies and PEAs may not prove accurate, and project viability is vulnerable to the USD/CAD exchange rate and future market prices, inflation, labor shortages, supply chain disruptions, and changes in global economic conditions.
• Dependence on Matawinie Mine Project and Battery Material Plants Project: Any adverse condition affecting these projects or their revenues/costs could materially impact the company's financial performance and require additional financing.
• Uncertainty Relating to Future Production Estimates: Actual production may vary from estimates due to varying graphite grades, mine plan revisions, mining hazards, natural phenomena, labor shortages, and local community opposition.
• Risks Related to Future Sale of Graphite Products: No assurance of favorable terms for future sales agreements, conditions precedent in existing agreements (Traxys, Panasonic, GoC) may not be satisfied, and termination of these agreements would have a material adverse impact.
• Potential Loss of Investment: Investment is speculative, with no assurance of building projects, commencing operations, or achieving revenues.
• No Market for Debt Securities, Subscription Receipts, Warrants or Units: No active or liquid trading market may develop for these securities, affecting their prices.
• Discretion in the Use of Proceeds: Management has broad discretion over proceeds, and ultimate use may vary from planned use, potentially not increasing market value.
• No Current Plans to Pay Cash Dividends: Investors may only see returns through share price appreciation.
• Market Price Fluctuations: Share price is subject to various factors, including financial condition, market interest, public float size, and potential delisting.
• Prevailing Interest Rates: The market price or value of Debt Securities will decline as prevailing interest rates for comparable debt instruments rise and increase as they decline.

Future Outlook

The company aims to become an integrated, carbon-neutral graphite concentrate and anode material supplier for EVs and energy storage. It plans to achieve Final Investment Decision (FID) for the Matawinie Mine and the 13 ktpy Battery Material Plant, with construction expected to take approximately 24 months and ramp-up to full capacity within 36 months post-FID. The Uatnan Mining Project is targeted as a Phase-3 expansion. The company anticipates continued negative cash flow from operating activities until commercial production is achieved.

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 believes that the market and economic data presented throughout this Prospectus, and in the documents incorporated by reference herein, is accurate as of the date of publication and, with respect to data prepared by the Corporation or on behalf of the Corporation, that estimates and assumptions are currently appropriate and reasonable, but there can be no assurance as to the accuracy or completeness thereof."
• "Although the Corporation has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that may cause results not to be as anticipated, estimated or intended."
• "The Corporation believes that securities analysts, investors and other interested parties frequently use non-IFRS financial measures in the evaluation of issuers."
• "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 batteries in electric vehicles, energy storage solutions, and consumer technology, as well as niche applications in traditional, specialized, and defense industries. It emphasizes its ESG standards and aims to establish a local, carbon-neutral, and traceable turnkey supply of graphite for the Western World, aligning with global trends towards sustainable and secure supply chains for critical battery materials. The Bcancour Battery Material Plant is noted as part of a new battery industrial hub in Quebec.

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 selected chemical purification technology for battery material plants is 'prevalent' and 'proven internationally' and 'currently being effectively used to produce purified graphite at industrial scale' by several battery material producers in North America and in China.
• Chinese reference index prices for high-capacity active anode material are projected to range from approximately US$6,884 per tonne to US$8,154 per tonne over the 2025-2035 period, while North American prices are projected to range from approximately US$7,512 per tonne to US$9,357 per tonne for the same period, indicating a premium for North American supply.

Corporate Governance

Related Party Transactions

• Accrued interests owed to Investissement Québec for the second quarter of 2025 (US$292,791) will be paid by issuing 178,531 Common Shares upon maturity, conversion, or redemption of notes.
• Accrued interests owed to Investissement Québec for the third quarter of 2025 (US$296,189) will be paid by issuing 106,161 Common Shares upon maturity, conversion, or redemption of notes.
• Pallinghurst Graphite International Limited and Pallinghurst Bond Limited disposed of 3,213,313 Common Shares between October 1, 2025, and November 12, 2025, for total gross proceeds of US$11,641,415.

Stakeholder Impact

• Shareholders: Potential dilution from future capital raises, speculative investment due to development stage, no current plans for cash dividends, and exposure to market price fluctuations.
• Employees: The Matawinie Mine workforce, including concentrator and administration personnel, is expected to total 144 full-time employees once in full production.
• Customers: Binding offtake agreements with the Government of Canada, Traxys, and Panasonic Energy secure future supply of graphite products, enhancing supply chain stability for these partners.
• Local Communities (Saint-Michel-des-Saints, Atikamekw First Nation of Manawan): Collaborative agreements and an Impact and Benefit Agreement (IBA) are in place, along with a Monitoring Committee for environmental and social surveillance.
• Government (Canada, Quebec): Equity investment from Canada Growth Fund Inc. and Investissement Québec, referral of the Matawinie Project to the Major Projects Office for streamlined approvals, and a research grant from the MRNF demonstrate government support and partnership.

Next Steps

• Convert expressions of interest into formal project financing for Matawinie Mine and Battery Material Plants.
• Reach Final Investment Decision (FID) for Matawinie Mine and the 13 ktpy Battery Material Plant (either combined or sequenced).
• Advance detailed engineering for the 13 ktpy Battery Material Plant by completing Class 3 AACE estimates and finalizing engineering packages.
• Secure key procurement contracts for the 13 ktpy Battery Material Plant prior to FID.
• Obtain all necessary regulatory approvals, permits, and authorizations for the 13 ktpy Battery Material Plant.
• Secure an existing site and building to house the 13 ktpy Battery Material Plant.
• Commence construction of the 13 ktpy Battery Material Plant (expected 24 months post-FID), followed by a 12-month ramp-up period.
• 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.
• Continue R&D projects in advanced graphite materials, new precursors, coating technologies, and eco-friendly processes.
• Seek necessary regulatory approvals to amend the expiry date of warrants (though GM's have already expired).
• Continue environmental monitoring activities as described in the Decree and by government authorities.
• Carry out progressive reclamation of the Co-disposal Facility (CDF) starting in Year 4 of mine operation.
• Conduct annual noise measurement campaigns during construction and operation.

Key Dates

Recommendation

The filing presents a mixed bag of strong progress and significant challenges. The positive feasibility study for Matawinie and the secured offtake agreements are strong indicators of future potential. However, the company is still in a pre-revenue development stage, requires substantial additional financing, faces execution risks for its battery material plants (especially securing a site for the 13 ktpy plant), and the termination of the GM agreements with expired warrants is a notable setback. The disposition of shares by a major shareholder (Pallinghurst) also adds a cautious note. Given the high degree of risk associated with new mining and industrial operations and the need for substantial capital, a 'hold' recommendation is appropriate for investors who are already exposed, awaiting further clarity on financing and project execution, particularly for the 13 ktpy Battery Material Plant. New investors should approach with caution, recognizing the speculative nature.

Keywords

Graphite, Anode Material, Electric Vehicles, EV, Battery Materials, Mining, Matawinie Mine, Bcancour Battery Material Plant, Uatnan Mining Project, Shelf Prospectus, Capital Raise, SEC Filing, NMG, Nouveau Monde Graphite, Quebec, Canada, Lithium-ion Batteries, ESG, Critical Minerals