Nemaska Lithium Inc. (“
Nemaska Lithium” or the
“
Corporation”) (TSX: NMX) (OTCQX: NMKEF)
(Frankfurt: N0T) today provides an update on the progress of its
Whabouchi Project as well as the constructive continuation of the
financing discussions with The Pallinghurst Group
(“
Pallinghurst”). This update is carried out
following the filing, on September 30th, of its Annual Financial
Statements, Annual Information Form and Management Discussion and
Analysis (MD&A) for the year ended June 30, 2019, and the
signing of an agreement with Pallinghurst which extends until
December 31, 2019, the exclusivity of the period to complete the
financing from Pallinghurst. The Corporation’s President and CEO,
Mr. Guy Bourassa, its Chief Financial Officer, Mr. Steve
Nadeau, as well as Pallinghurst Co-Founder and Managing Partner,
Mr. Arne H. Frandsen, will be hosting an online conference
call today, October 8, 2019, at 11:00 AM EDT. The instructions
to access the call are indicated below.
“Our focus for the past weeks has been to work
assiduously with Pallinghurst on its investment proposal.
Discussions are progressing well, and we have every reason to
believe that we have met all their requirements from a technical
due diligence standpoint. We are working closely with our advisors
to help Pallinghurst complete its entire review in a timely manner
to reach an agreement that will satisfy all parties, including our
shareholders. This is why we have accepted to extend to December
31, 2019, the exclusivity period for negotiation and closing of
their investment” said Guy Bourassa, President and CEO of Nemaska
Lithium. “In the meantime, I am very proud of the work done by our
teams in the field. Even at a reduced pace of work, progress at the
Whabouchi mine has been significant and demonstrates the quality
and effectiveness of our Construction and Operations teams. In
Shawinigan, detailed engineering is on schedule, and the
Phase 1 plant steadily delivers to potential clients as our
team continues to improve our processes in preparation for the
commercial phase. The dedication of our team to make a great
success out of this project remains unwavering.”
Nemaska Lithium and Pallinghurst Making
Progress Towards Reaching an Agreement
Since the acceptance by Nemaska Lithium of an
investment proposal of up to CAD 600 M by Pallinghurst on
July 19, 2019, productive discussions have taken place between both
groups’ specialists in order to complete the due diligence and to
advance the negotiations with the aim of reaching an agreement that
will satisfy both parties, in a timely manner, in respect of a
transaction to be implemented under a court approved plan of
arrangement under the Canada Business Corporations Act subject to
shareholder approval. Exclusive negotiations will continue with a
view of closing the investment before December 31, 2019, in order
to give all parties, the time and flexibility to conscientiously
complete this exercise and provide additional details to
shareholders as soon as available.
“We are pleased and impressed by our review of
Nemaska Lithium thus far and satisfied with the progress of
discussions between our teams. We remain fully committed to
continue working cooperatively with Nemaska Lithium in pursuing our
proposed investment and, furthermore, are open to explore with the
Corporation’s largest shareholders an additional capital injection
to potentially substitute certain elements of the current financing
structure,” declared Arne H. Frandsen, Co-Founder and Managing
Partner of Pallinghurst.
Mr. Frandsen continued, “We appreciate the
constructive and open dialogue we have had with Mr. Bourassa
and his team. Based on our due diligence review thus far, we
continue to believe that Nemaska Lithium has a world-class
spodumene deposit, a proven lithium salts patented process, as well
as a highly qualified workforce. These assets positions Nemaska
Lithium as a key player in the rapidly growing lithium-ion battery
and energy storage industry. We continue to focus on developing key
strategic partnerships across the different battery materials, and
we believe that, for lithium, Nemaska Lithium is the right partner
with whom this strategy should be pursued.”
Mr. Bourassa added, “We are working closely
with our partners and advisors to examine the best options on the
table to ensure the Corporation’s sustainability and maximize the
use of cash on hand pending financing. We are confident that we
have the right partners in place to complete a more favorable
capital structure for the project that will allow us to bring it to
commercial production in time to benefit from the market expansion
anticipated in the years to come. As the development of a local
lithium-ion battery industry is more than ever promoted by
governmental authorities around the world, we are convinced that
Nemaska Lithium’s promising project is still in the best position
to catalyze a value chain for this industry in Québec and
Canada.”
Financials Highlights
On September 30, 2019, Nemaska Lithium filed its
annual financial statements, Annual Information Form and Management
discussion and analysis (MD&A) on SEDAR. As at June 30, 2019,
the Corporation had on hand CAD 128M in unrestricted cash and cash
equivalents to finance its current activities, plus restricted cash
and cash equivalents of CAD 40M placed in a cost overrun
account.
As at June 30, 2019, cumulative incurred capital
investment totalled CAD 361M on a total Whabouchi Project
budget of CAD 1.269B, including contingency. Although advancing the
Whabouchi Project at an adjusted pace since February 2019, the
Corporation has incurred approximately 53% of the expenditures at
the Whabouchi site, and approximately 15% of the expenditures at
the Shawinigan site.
As at August 31, 2019, cumulative incurred
capital investment totalled CAD 377M on a total Whabouchi
Project budget of CAD 1.269B, including contingency. Although
advancing the Whabouchi Project at an adjusted pace since
February 2019, the Corporation has incurred approximately 55%
of the expenditures at the Whabouchi site, and approximately 16% of
the expenditures at the Shawinigan site.
The Corporation has fully paid the cumulative
required CAD 9.2M deposit in respect of its obligation related to
the estimated Whabouchi site restoration costs under the Mining
Act.
Construction Report Selected Information on
Expenditures All amounts are in Canadian
dollars (CAD in millions, including contingency) |
Incurred and Remaining CAPEX as at June 30, 2019,
per NI 43–101 Technical Report estimate, July 2019 |
|
Total |
Incurred
as at June 30, 2019 |
Remaining as at June 30, 2019 |
Whabouchi: |
448 |
238 |
210 |
Plant: |
821 |
123 |
698 |
Total: |
1,2691 |
361 |
908 |
Incurred and Remaining CAPEX as at August 31,
2019, per NI 43–101 Technical Report estimate, July
2019 |
|
Total |
Incurred as at
August 31, 2019 |
Remaining as at August 31, 2019 |
Whabouchi: |
448 |
247 |
201 |
Plant: |
821 |
130 |
691 |
Total: |
1,2691 |
377 |
892 |
1The Total CAPEX includes amounts for corporate
owners’ costs, which are ≈CAD 42 M for Whabouchi and
≈CAD 29 M for the Plant.
Project Update
Construction at the Whabouchi mine continued per
the adapted pace of the recent months. Critical earthworks and
concrete foundations are substantially completed. Crushing area
structural steel installation is also substantially completed, and
conveyor installation has begun. Most of the process equipment has
been received, and whenever possible it has been installed or
appropriately stored.
Mine employees have been actively working since
May on pre-production activities such as overburden removal,
drilling and blasting to generate the aggregate material required
for roads, storage areas and other works necessary for the
development of the mine infrastructures. The Corporation is pleased
to report that, as of October 7, 2019, there has been no recordable
incident for the first 161 days worked at the Whabouchi mine.
Readers are invited to click here to view our Mine Construction
photo gallery.
In Shawinigan, now that the updated NI 43–101
Technical Report has been filed, detailed engineering for the
commercial electrochemical plant is on schedule and our team
continues working with the independent engineering firms involved.
Meanwhile, the Phase 1 plant continues to produce high-quality
lithium hydroxide at a sustained pace, and the product continues to
be of great interest to potential customers across the world. The
extension of the demonstration plant's activities, until December
2019, will allow for continued improvement to Nemaska Lithium's
patented and proven process, providing opportunities to de-risk
operations processes in anticipation of the commercial plant
start-up.
Conference Call
Nemaska Lithium will host a conference call on
October 8, 2019, at 11:00 AM EDT. The Corporation’s President
and CEO, Mr. Guy Bourassa, and Chief Financial Officer, Steve
Nadeau, and Co-founder and Managing Partner of Pallinghurst,
Mr. Arne H. Frandsen, will discuss the announcement. The call
can be accessed at the following:
Online
https://edge.media-server.com/mmc/p/i7vkjwzz
Dial information
US/CANADA Participant Toll-Free Dial-In
Number: (866) 353-6129 US/CANADA
Participant International Dial-In
Number: +1 (409) 217-8084
Conference ID: 6139128
About Nemaska Lithium
Nemaska Lithium Inc. is a developing chemical
company whose activities will be vertically integrated, from
spodumene mining to the commercialization of high-purity lithium
hydroxide. This lithium salt is mainly destined for the
fast-growing lithium-ion battery market, which is driven by the
increasing demand for electric vehicles and energy storage
worldwide. With its products and processes, the Corporation intends
to facilitate access to green energy, for the benefit of
humanity.
The Corporation will be operating the Whabouchi
mine in Québec, Canada, one of the richest lithium spodumene
deposits in the world, both in volume and grade. The spodumene
concentrate produced at the Whabouchi mine will be processed at the
Shawinigan plant using a unique membrane electrolysis process for
which the Corporation holds several patents.
The Corporation is a member of the S&P/TSX
SmallCap Index, S&P/TSX Global Mining Index, S&P/TSX Global
Base Metals Index, S&P/TSX Equal Weight Global Base Metals
Index, and the MSCI Canada SmallCap Index. For more information,
visit www.nemaskalithium.com.
About The Pallinghurst Group
The Pallinghurst Group is a London-based leading
strategic investor in the global metals and mining sector with
significant development, operational and financial expertise in
mining. For the past 12 years, Pallinghurst has put USD 2B of
equity capital to work in a number of mining projects. As a
hands-on investor, Pallinghurst seeks to act as a catalyst for
developing and unlocking value for the benefit of all stakeholders.
Pallinghurst’s investors consist of blue-chip family offices,
sovereign wealth funds as well as specialized mining investors.
To learn more about Pallinghurst : www.pallinghurst.com
Cautionary Statement on Forward-Looking
Information
All statements, other than statements of
historical fact, contained in this press release including, but not
limited to, those relating to (A) the additional capital required
to enable the Corporation to complete the Project’s construction,
(B) the eventual conclusion of a definitive agreement with
Pallinghurst and closing of the investment, (C) the estimated CAPEX
for completing the construction of the Whabouchi mine and the
Shawinigan plant, (D) the expected resumption of construction and
commissioning, and (E) the possibility of an additional capital
injection to substitute certain elements of the current financing
structure to be effected by Pallinghurst cooperatively with the
Corporation’s largest shareholders, constitute “forward-looking
information” and “forward-looking statements” within the meaning of
certain securities laws and are based on expectations and
projections as of the date of this press release. Certain important
assumptions by the Corporation in making forward-looking statements
include, but are not limited to, reaching a definitive agreement
with Pallinghurst in a timely manner and satisfying all closing
conditions before December 31, 2019, and the obtaining of the
additional capital required to fulfill the conditions precedent to
receive the remaining proceeds from the Project financing being the
second tranche payment under the Orion Streaming facility.
Forward-looking statements contained in this
press release include, without limitation, those related to (i) the
Corporation having met Pallinghurst’s requirement from a technical
due diligence standpoint, (ii) the eventual definitive agreements
to implement Pallinghurst’s investment proposal and closing of the
investment under a court approved plan of arrangement, (iii) the
Corporation having a solid plan for the future and a strong team to
resume construction once financing is in place, (iv) the expected
increased level of operational efficiency and de-risking of the
Project, (v) the CAPEX estimates, (vi) the Corporation reaching an
agreement with Pallinghurst that will satisfy all parties,
including its own shareholders, (vii) the continuing improvement of
the Corporation’s processes towards the commercial phase, (viii)
the closing of the Pallinghurst’s investment before December 31,
2019, (ix) the Corporation to be positioned as a key player in the
rapidly growing lithium-ion battery and energy storage industry,
(x) the Corporation being the right partner with whom Pallinghurst
should pursue its strategy, (xi) the Corporation to eventually be
in position to restart construction work quickly when financing is
completed, and (xii) generally, the above “About Nemaska Lithium”
paragraph which essentially describes the Corporation’s outlook.
Forward-looking statements are based on expectations, estimates and
projections as of the time of this press release. Forward-looking
statements are necessarily based upon a number of estimates and
assumptions that, while considered reasonable by the Corporation as
of the time of such statements, are inherently subject to
significant business, economic and competitive uncertainties and
contingencies. These estimates and assumptions may prove to be
incorrect.
Many of these uncertainties and contingencies
can directly or indirectly affect, and could cause, actual results
to differ materially from those expressed or implied in any
forward-looking statements. There can be no assurance that the
Pallinghurst investment will close or that other funding /
strategic alternatives can be available, that the Corporation will
meet conditions under the Streaming Agreement and that the
Whabouchi mine and/or the electrochemical plant in Shawinigan will
be commissioned and will begin production, as future events could
differ materially what is currently anticipated by the Corporation.
In addition, there can be no assurances that the CAPEX estimates
will prove accurate.
By their very nature, forward-looking statements
involve inherent risks and uncertainties, both general and
specific, and risks exist that estimates, forecasts, projections
and other forward-looking statements will not be achieved or that
assumptions do not reflect future experience. Forward-looking
statements are provided for the purpose of providing information
about management’s expectations and plans relating to the future.
Readers are cautioned not to place undue reliance on these
forward-looking statements as a number of important risk factors
and future events could cause the actual outcomes to differ
materially from the beliefs, plans, objectives, expectations,
anticipations, estimates, assumptions and intentions expressed in
such forward-looking statements. All of the forward-looking
statements made in this press release are qualified by these
cautionary statements and those made in our other filings with the
securities regulators of Canada including, but not limited to, the
cautionary statements made in the “Risk Factors” section of the
Corporation’s Annual Information Form dated September 30, 2019, and
the “Risk Exposure and Management” section of the Corporation’s
most recent Management Discussion & Analysis. The Corporation
cautions that the foregoing list of factors that may affect future
results is not exhaustive, and new, unforeseeable risks may arise
from time to time. The Corporation disclaims any intention or
obligation to update or revise any forward-looking statements or to
explain any material difference between subsequent actual events
and such forward-looking statements, except to the extent required
by applicable law.
Further information regarding Nemaska Lithium is
available in the SEDAR database (www.sedar.com) and on the
Corporation’s website at: www.nemaskalithium.com.
FOR FURTHER INFORMATION, PLEASE
CONTACT:
Victor CantoreInvestor
Relations514 831-3809victor.cantore@nemaskalithium.com |
Wanda Cutler Investor Relations416 303-6460
wanda.cutler@nemaskalithium.com |
Gabrielle TellierMedia
Relations514 348-0466gabrielle.tellier@nemaskalithium.com