Nouveau Monde Graphite Inc. (“NMG“ or the “Company”) and Panasonic Energy Co., Ltd. , a wholly owned subsidiary of Panasonic Holdings Corporation, have entered into a binding offtake agreement pursuant to which NMG will supply 18,000 tonnes per annum (“tpa”) of its planned Phase-2 active anode material production to Panasonic Energy for an initial period of seven years.
In addition to the Offtake Agreement, NMG and Panasonic also entered into a subscription agreement (the “Subscription Agreement”) for Panasonic to make an initial US$25-million equity investment in NMG (the “Tranche 1 Investment”) to support the advancement of NMG’s Phase-2 operations – the Matawinie Mine and the Bécancour Battery Material Plant – in line with Panasonic Energy’s specifications refined during the qualification process and technical collaboration.
Arne H Frandsen, Chair of NMG, declared:“We have found in Panasonic Energy more than a long-term tier-1 customer, we have found a true partner who shares our vision for a decarbonized future and a striving North American integrated battery industry. This galvanizing offtake agreement, topped with a substantial investment strategy, is set to propel NMG through the last few steps before a final investment decision (“FID”). On behalf of the Board of Directors, I congratulate NMG’s team on the dedication, quality of work, technological optimization, and growth-oriented commercial mindset they have brought to this engagement process. The result is a successful partnership for years to come!”
Kazuo Tadanobu, President and CEO of Panasonic Energy, stated:“We are thrilled about Panasonic Energy’s strategic investment in NMG and the long-term offtake agreement, marking a significant milestone in our medium-to-long-term management goals aimed at strengthening the North American supply chain for EV batteries. This initiative aligns with our vision for sustainability, prioritizing locally sourced materials and leveraging NMG’s impressive vertically integrated supply chain. The bilateral partnership between Japan and Canada adds another layer of significance to our investment, and Panasonic Energy takes pride in contributing to the deepening ties and shared goals in advancing battery supply chains together with NMG.”
Eric Desaulniers, Founder, President, and CEO of NMG, reacted:“Youkoso–歓迎! We welcome Panasonic Energy as a shareholder in NMG and are excited to partner with them to supply carbon-neutral natural graphite extracted and transformed with the highest ESG standards of the industry. Today marks a momentous milestone for NMG, highlighting the progress made towards our Phase 2 and the Company’s sound business plan of becoming North America’s largest fully integrated active anode material producer to serve the booming Western battery and electric vehicles (“EV”) market.”
With a confirmed multiyear sales commitment from Panasonic Energy supplemented with the Tranche 1 Investment, and with the parallel General Motors Co. (“GM”) transaction, NMG has the means and technical parameters in hand to advance engineering of the Company’s Phase-2 Bécancour Battery Material Plant. The Offtake Agreement and the parallel GM transaction also provide greater bankability visibility to NMG’s potential lenders, strategic investors, and governments as part of the project financing linked to a positive FID decision for the Company’s integrated Phase-2 Matawinie Mine and Bécancour Battery Material Plan. Lenders’ input was provided throughout discussions with Panasonic Energy to facilitate successful financing at FID.
The binding Offtake Agreement covers the supply of a committed annual volume of 18,000 tonnes of active anode material by NMG to Panasonic Energy for an initial seven-year term from the commencement of the Company’s Phase-2 production. The sales price will be based on an agreed upon price formula linked to future prevailing market prices as well as a pricing mechanism to satisfy project financing ratios and ensure stable procurement for Panasonic Energy. The Offtake Agreement is subject to conditions precedent which are standard for a project of this nature, including among others, the successful start of commercial operation and final product qualification. The Offtake Agreement contains standard termination rights for an agreement of this nature.
Through this Offtake Agreement, Panasonic Energy is set to leverage NMG’s fully integrated North American production, carbon neutrality profile, and proactive ESG practices for the establishment of a reliable, local, and responsible battery manufacturing value chain. The Company’s active anode material complies with the U.S. Government’s Inflation Reduction Act battery material sourcing requirements for EV subsidies.
In connection with the Tranche 1 Investment, Panasonic has agreed to subscribe for 12,500,000 common shares in the capital of NMG (the “Common Shares”) and 12,500,000 common share purchase warrants (the “Warrants”) for aggregate proceeds ofUS$25 million. Such Warrants are generally exercisable in connection with the Tranche 2 Investment at FID in accordance with their terms. Each Warrant will entitle the holder thereof to acquire one Common Share (a “Warrant Share”) at a price per Warrant Share equal to the lower of (i) the amount in US$2.38 per Common Share and (ii) the amount in US Dollars per Common Share equal to the closing price of the Common Shares on the trading day immediately following the date on which the Tranche 1 Investment is announced. The exercise of the Warrants is subject to certain ownership limitations.
