Governments inject US$50M into Nouveau Monde Graphite for ore-to-battery plans

Nouveau Monde Graphite (NYSE: NMG; TSX.V: NOU) announced a US$50 million equity investment by the Canada Growth Fund (CGF) and the Quebec government – via its agent Investissement Québec – to support the company’s second stage ore-to-battery-material graphite operations. Shares rose.

The investment will advance NMG’s Matawinie mine and Bécancour battery material plant, both of which are within 150 km of Montréal, Que., the company said Tuesday.

“Rounding up 2024 marked by significant progress in our business plan, we are setting our sights on the remaining milestones to reach a final investment decision,” NMG founder and CEO Eric Desaulniers said in a release. “We are committed to delivering high-performing and reliable active anode materials to the North American battery and electric vehicle markets, contributing to a local, sustainable, and reliable supply chain.”

Nouveau Monde shares gained 8.7% to $1.99 apiece on Tuesday afternoon in Toronto, valuing the company at $223.1 million. Its shares traded in a 52-week range of $1.70 to $4.14.

The investment – with capital shared equally between both governments – enables progress on detailed engineering, orders of key long-lead items and support to critical-path activities. NMG’s integrated second-stage production of active anode material is destined for the North American battery and EV markets. Both levels of government made the strategic investment because NMG’s business model and recognized environmental, social and governance (ESG) profile align with the critical mineral strategy and battery value chain actively promoted by governments.

The support from Investissement Québec and the Canada Growth Fund strengthens the company’s backing of key institutional investors and provides a favourable roadmap to project financing upon a positive final investment decision. The Canada Growth Fund is a $15-billion independent and arm’s length public fund of the federal government to help attract private investors for green projects. 

Nouveau Monde is still awaiting a final investment decision, pending remaining regulatory approvals. It’s also finalizing an updated feasibility study as part of its second stage operations.

In preparation for a final investment decision, NMG recently signed an impact and benefit agreement with the Atikamekw First Nation of Manawan with respect to the Metawinie mine. Prior to that, NMG received a provincial ministerial decree authorizing the Matawinie mine and key permits to support preliminary infrastructure work on both sites. In January 2020, the Municipality of Saint-Michel-des-Saints and NMG signed a collaboration and benefit-sharing agreement for the Matawinie project.

Nouveau Mondre Graphite is continuing its integrated second stage operations to optimize production parameters, engineering, and cost projections.