Nouveau Monde Graphite Inc. (“Nouveau Monde” or the “Company”)
(TSXV: NOU; OTCQX: NMGRF; Frankfurt: NM9) is pleased to announce
the completion of a Front-End Loading engineering analysis
(“FEL-1”) for Phase 2 of its large-scale commercial lithium-ion
anode material project in Bécancour, Québec, Canada as it continues
to execute its strategy of becoming the Western World’s largest
producer of high-quality anode materials to be used mainly in
batteries for electrical vehicles and renewable energy storage. As
it expands, Nouveau Monde preserves its firm commitment to carbon
neutrality.
Arne H Frandsen, Chairman of Nouveau
Monde, commented: “Nouveau Monde is firmly on its way to
become one of the world’s most important anode materials producers,
delivering high quality anode materials from our sophisticated
processing and beneficiation plants in Bécancour. Our successful
upstream integration with our Matawinie mineral project is designed
to ensure that we have access to the right quality feedstock for
decades to come. Thanks to Nouveau Monde’s team of local and
internationally acclaimed experts and professionals, we are
continuing to move forward at speed!”
Eric Desaulniers, President and CEO of
Nouveau Monde, added: “We founded Nouveau Monde in 2011
with the vision of developing the largest and best-in-class
graphite-based anode material supplier in North America. For the
past five years, we have specifically focused on developing the
processing know-how and skills internally. We have hired highly
qualified professionals from around the world, creating a
multifaceted team of anode materials experts. This team has in turn
engaged with multiple other local and international experts to
establish our technologies to produce high-quality lithium-ion
anode material on a large scale.
Today, we are proud to announce Phase 2 of our
effort, with a projected low operating cost profile. This next
phase will continue to comply with Nouveau Monde’s high ESG
standards and will benefit from Québec’s green and inexpensive
hydroelectricity as our exclusive energy source. Our significant
forecasted incremental annual operating profit potential is a
testimony that it is possible to embrace sustainable development
and profitability to the benefit of all stakeholders.
It is essential for North America to develop a
fully integrated supply chain of high-quality battery materials
that are produced at meaningful scale, with the lowest carbon
footprint, with strict traceability compliance while maintaining
cost competitiveness at all times.”
Figure 1: 3D rendering of Nouveau Monde's Bécancour VAP
projecthttps://www.globenewswire.com/NewsRoom/AttachmentNg/1dc39b48-7fc6-4501-b867-8875b397a849
Projected Capital and Operating Costs for Phase
2
The FEL-1 concludes that a production of 42,000
tpa of anode material and 3,000 tpa of purified flakes can be
achieved with the construction of a brand-new state-of-the-art
facility on Nouveau Monde’s industrial site of 200,000 m2 and
supported by its existing Phase 1 plant infrastructure. The FEL-1
includes a review of all environmental regulations and permits, the
project schedule, product specifications definition, stakeholders’
analysis, the capital expenditure budget and projected operating
costs. Nouveau Monde’s site in Bécancour is strategically situated
for large-scale anode material production, with proximity to
potential customers, access to key utilities (e.g., water,
hydropower, gas), adjacent to a chlor-alkali producer which
provides access to key consumables, a skilled workforce and an
adjacent deep-water international port on the St. Lawrence
River.
ANNUAL OPERATING METRICS |
45 ktpa FACILITY |
|
ktpa |
Processed natural graphite |
60 |
Anode material (CSPG) production |
42 |
Purified jumbo flakes production |
3 |
Micronised graphite by-product |
14 |
Chloride by-product |
1 |
Table 1: Annual operating metrics
CAPEX FINANCIAL METRICS |
45 ktpa FACILITY |
|
In M US$ |
IN US$ / tonne |
Direct cost |
359 |
7,988 |
Indirect cost |
103 |
2,280 |
Contingency |
83 |
1,848 |
Total CAPEX |
545 |
12,116 |
Table 2: Initial capital expenditure estimate (excluding Owner's
cost, provision for escalation and taxes & duties)
OPEX FINANCIAL METRICS |
45 ktpa FACILITY |
|
In M US$ |
IN US$ / tonnes |
Anode |
Revenue |
300 |
7,152 |
Material |
All-in
cost excluding |
91 |
2,167 |
(CSPG) |
raw material |
42 kt production |
Raw material |
23(1) |
77(2) |
544(1) |
1,841(2) |
|
Operating Margin |
186 |
132 |
4,440 |
3,144 |
Purified |
Revenue |
18 |
6,000 |
Jumbo |
All-in
cost excluding |
3 |
1,069 |
Flakes |
raw material |
3 kt production |
Raw material |
1(1) |
8(2) |
414(1) |
2,631(2) |
|
Operating Margin |
14 |
7 |
4,517 |
2,300 |
Total Operating Margin – 45 ktpa facility |
200 |
139 |
4,445 |
3,088 |
Table 3 :Projected operational expenditures
(1) Assumes a transfer pricing at Matawinie mineral
project FS 43-101 operating cost plus transportation cost to
Bécancour(2) Assumes a transfer pricing at Matawinie mineral
project FS 43-101 sales price plus transportation cost to
Bécancour
The Capex and Opex prepared for this FEL-1 are
based on a Class 4 type estimate as per the American Association of
Cost Engineers (“AACE”) International Practice 18R-97 with a target
accuracy between -30% to +40%. The Capex is estimated at US$545
million including the material, equipment, labour and freight
required for the plant, as well as all infrastructure and services
necessary to support the operation. The estimate excludes the
owner’s cost, provision for escalation and all duties and
taxes.
Bécancour VAP Project Financing
Strategy
The Company’s strategy is to finance the
Bécancour VAP project with a structure involving approximately two
thirds comprised of non-dilutive financial instruments and the
remaining one third of equity financing. The non-dilutive financial
instruments that are contemplated by the Company are a combination
of bank loans, structured debt, forward payments on production and
royalty streams. The Company’s largest shareholder, The
Pallinghurst Group, is fully supportive of the Bécancour VAP
project. No assurance can be given that any such additional
financing will be available or that, if available, it can be
obtained on terms favourable to the Company. The failure to obtain
additional financing on favourable terms, or at all, could have a
material adverse effect on the ability of the Company to complete
the construction of the Bécancour VAP project.
Project Timeline
Given the strong economics revealed in the
FEL-1, Nouveau Monde has commenced a FEL-2 pre-feasibility study,
based on the results from the demonstration modules, which is
expected to be completed in the first half of 2022. The FEL-1
evaluated various strategies to optimise the deployment of the
project, including advancing directly to an enhanced FEL-2 program
that includes detailed engineering of certain portions of the
project and a modular construction and commissioning sequence
enabling an initial production capacity to be available earlier,
while construction activities are being completed. The project
development pathway beyond detailed design and initiation of the
construction phase will be determined by financial partnerships and
end-customer commitments. It is currently anticipated by management
that the first production lines of the Phase 2 Bécancour VAP
project will commence their commissioning in Q1 2025.
Figure 2: Bécancour VAP Project prospective
timetablehttps://www.globenewswire.com/NewsRoom/AttachmentNg/0bcd81c4-ffa4-48dc-bdaa-7933b1e614a7
De-Risking by Building Significant Phase
1 Plant and Strategic R&D
The production of purified, coated spherical
graphite used as anode material in lithium-ion battery involves
three major process steps, namely: shaping, purification and
coating. Since 2016, the Company has committed approximately US$27
million in process development and de-risking by running
large-scale bench test and building demonstration units. Since
early 2020, Nouveau Monde has been operating two commercial scale
shaping units in which it processed nearly 1,000 batches to confirm
the optimised process parameters and equipment performance profile
to be implemented to produce systematically within customers’
specifications. Significant equipment improvements and
modifications were implemented on-site to achieve an optimum
operating throughput and overall yield while maintaining constant
in-specs quality material. Ongoing internal R&D programs on the
shaping process are targeting manufacturing excellence by the
enhancement of fundamental understanding of fluid dynamics and air
flows by using as-built scan, numerical modelling and adoption of
advanced automation and artificial intelligence technologies.
As for the Phase 1 purification sector of the
facility, Nouveau Monde developed its proprietary thermochemical
process that is currently being deployed at a 1,500 tpa nameplate
capacity in Olin’s facility adjacent to the Company’s industrial
site, with a commissioning scheduled to start in the first half of
2021 (Construction Commenced of Phase 1 Purification Facility for
Lithium-Ion Battery Material in Bécancour and the Land for Phase 2
Expansion Is Now Successfully Acquired).
The final process step to produce anode material
consists of coating the purified spherical graphite with a
carbon-based material to minimise the surface area and enhance the
stability of the solid electrolyte interface. Nouveau Monde is
currently in the detailed engineering phase and has initiated the
procurement to build the first module of the Phase 1 2,000 tpa
capacity plant that is scheduled to be commissioned early in 2022
(Nouveau Monde Advances its 2,000-Tonne Coated Spherical Graphite
Production Facility – Commissioning Set for Q1 Next Year). Nouveau
Monde is of the view that its strategy of de-risking the process by
investing in a rapid deployment of a first scalable-complete module
will allow a faster product qualification with lithium-ion battery
cell makers and more efficient and reliable engineering
development.
Product Offering and
Marketing
The anode material flowsheet developed by
Nouveau Monde is designed to produce anode material of various
particle sizes varying between 8 and 20 µm with flexibility to
serve various lithium-ion battery applications. Roskill’s Fall 2020
issue reported 2019 average Chinese sales prices of US$ 7,157/tonne
for CSPG with specifications similar to the anode material that is
expected to be produced by Nouveau Monde. The Company is of the
view that this is a fair and prudent estimate of the projected
sales price for the Bécancour VAP project. Moreover, the Company
and its experienced graphite marketing team is actively developing
value-added opportunities for the 1 and 8 µm micronised graphite
representing a valuable anode material process by-product
potentially serving multiple niche applications.
In their latest February 2021 Lithium-ion
Battery Megafactory assessment report, Benchmark Mineral
Intelligence forecasts 562 GWh in 2025 and 937 GWh in 2030 of
battery capacity in North America and Europe combined with
associated graphite anode demand of 674,000 tpa and 1,124,000 tpa,
respectively.
Best in Class in Reducing Supply Chain
Carbon Footprint; Fully Committed to Carbon Neutrality
Nouveau Monde seeks to contribute to the
decarbonisation of the economy by producing graphite materials, a
required input for the production of low-carbon products, with the
smallest greenhouse gas (“GHG”) footprint possible. In addition to
pushing the science and technology development in order to mine and
transform graphite in a sustainable and low GHG-emitting manner,
the Company has pledged to offset all GHG emissions from sources it
either has direct control over or may significantly influence
(i.e., the Company’s Scope 1, Scope 2 and portion of Scope 3
emissions). Based on the FEL-1, the Bécancour VAP projected GHG
emissions are detailed in table 4.
EMISSIONS IN METRIC TONNES CO2 EQUIVALENT (T CO2 EQ) |
|
Source |
Total GHG |
Scope 1 |
Stationary combustion |
N/A |
- |
Mobile combustion |
N/A |
- |
Fugitive emissions |
N/A |
- |
Process emissions |
partial oxidation of carbon from the furnace packing material
(calcined petroleum coke) |
5,760 |
partial oxidation of carbon from petroleum pitch in the coating
process |
1,975 |
Total Scope 1 |
|
7,735 |
Scope 2 |
Stationary combustion |
electricity production |
300 |
Total Scope 2 |
|
300 |
Scope 3 |
Stationary combustion |
combustion of pitch-derived residual (condensed) material |
4,608 |
Mobile combustion |
transport of calcined petroleum coke |
260 |
transport of petroleum pitch |
255 |
Process emissions |
production of calcined petroleum coke |
3,842 |
Total Scope 3 |
|
8,965 |
GRAND TOTAL |
|
17,000 |
Table 4: Projected carbon footprint of the Bécancour VAP
project
The offsetting costs are estimated at US$ 11.86/
t CO2 eq per tonne of CSPG produced and represent approximately US$
202,000 annually. On a per product basis, this represents
approximately US$ 3.83 per tonne of CSPG product and US$ 2.01 per
tonne of by-product.
The forecasted GHG footprint for the Bécancour
VAP project is derived from the FEL-1, its associated energy and
mass balances, and the most likely procurement scenario for process
inputs such as calcined petroleum coke and petroleum pitch. Nouveau
Monde envisions developing and producing the cleanest anode-grade
graphite material possible and is continuously striving for
excellence in minimising GHG emissions and climate impact.
Nouveau Monde has ongoing R&D programs in
place with professor Philippe Ouzilleau, PhD, from McGill
University in Montréal to find alternate carbon sources to the
petroleum-based product currently being used in the coating process
with the objective of significantly reducing its carbon
emissions.
Nouveau Monde also remains fully committed to
achieving carbon neutrality at the Company’s level, including the
Matawinie mine and concentrator in Saint-Michel-des-Saints and the
Bécancour VAP project.
Co-Existence of the Matawinie Mineral
Project and the Bécancour VAP Project
The FEL-1 does not impact nor alter the National
Instrument 43-101 (“NI 43-101”) feasibility study filed on December
10, 2018 with regards to the Matawinie mineral project. While
Nouveau Monde is of the view that there are obvious operational and
financial benefits to developing a fully controlled and integrated
business model, both the Matawinie mineral project and Bécancour
VAP project should be considered independently from each other with
regards to their economic viability. To this end, it is the
intention of the Company to sell opportunistically the high-purity
jumbo and large flakes produced at the Matawinie mineral project
directly into third party traditional and speciality graphite
markets, while the Bécancour VAP project intends to source its
products, comprised of intermediate and fine flakes, from multiple
sources. As a reference, the FEL-1 is based on a graphite
concentrate feedstock pricing identical to a weighted average
between the intermediate and fine flakes expected sales price shown
at table 19.3 of the Matawinie NI 43-101 feasibility study. It is
Nouveau Monde’s intention to prioritise the use of the feedstock
produced at the Matawinie mineral project; however, the Company
intends to source raw material from other graphite suppliers from
time to time should market, or operational, conditions so
justify.
Due to its modular structure, upon Phase 2 of
the Bécancour VAP project successfully reaching name plate
capacity, we believe it will likely be possible for Nouveau Monde
to expand its capacity further. Such Phase 3 expansion is currently
being analysed by management, but its implementation has not been
agreed to and is entirely speculative at this point in time.
The Company will inform its stakeholders of
material developments with regards to the Bécancour VAP project as
required by its continuous disclosure obligations set out in
Regulation 51-102.
About Nouveau MondeNouveau
Monde is striving to become a key element in the sustainable energy
revolution. The Company is working towards developing a
fully-integrated source of green battery anode material in Québec,
Canada. Targeting full-scale commercial operations by 2023, the
Company is developing advanced carbon-neutral graphite-based
material solutions for the growing lithium-ion and fuel cell
markets. With low-cost operations and high ESG standards, Nouveau
Monde aspires to become a strategic supplier to the world’s leading
battery and auto manufacturers, ensuring robust and reliable
advanced material, while guaranteeing supply chain
traceability.
Media |
Investors |
Julie Paquet Director,
Communications+1-450-757-8905 #140jpaquet@nouveaumonde.ca |
Christina Lalli Director,
Investor Relations +1-438-399-8665clalli@nouveaumonde.ca |
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Cautionary Note Regarding
Forward-Looking Information All statements, other than
statements of historical fact, contained in this press release
including, but not limited to (i) the timetable and the operating
metrics of the Bécancour VAP project, (ii) the financial metrics of
the Bécancour VAP project, including capital and operating costs,
(iii) the financing strategy of the Bécancour VAP project, (iv) the
benefits of the Company’s de-risking strategy, (v) the results of
the carbon neutrality initiatives, (vi) the positive impact of the
foregoing on project economics, (vii) the intended results of the
initiatives described above, (viii) the intended project output
capacity, (ix) future market supply and demand, (x) future mineral
prices and (xi) Nouveau Monde’s mission and strategy and the “About
Nouveau Monde” paragraph which essentially describe the Company’s
outlook and objectives, constitute “forward-looking information” or
“forward-looking statements” within the meaning of certain
securities laws, and 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 Company 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.
Moreover, these forward-looking statements were based upon various
underlying factors and assumptions, including the timely delivery
and installation of the equipment supporting the production, the
Company’s business prospects and opportunities and estimates of the
operational performance of the equipment, and are not guarantees of
future performance.
Forward-looking information and statements are
subject to known or unknown risks and uncertainties that may cause
actual results to differ materially from those anticipated or
implied in the forward-looking information and statements. Risk
factors that could cause actual results or events to differ
materially from current expectations include, among others, delays
in the scheduled delivery times of the equipment, the ability of
the Company to successfully implement its strategic initiatives and
whether such strategic initiatives will yield the expected
benefits, the availability of financing or financing on favourable
terms for the Company, the dependence on commodity prices, the
impact of inflation on costs, the risks of obtaining the necessary
permits, the operating performance of the Company’s assets and
businesses, competitive factors in the graphite mining and
production industry, changes in laws and regulations affecting the
Company’s businesses, political and social acceptability risk,
environmental regulation risk, currency and exchange rate risk,
technological developments, the impacts of the global COVID-19
pandemic and the governments’ responses thereto, and general
economic conditions, as well as earnings, capital expenditure, cash
flow and capital structure risks and general business risks.
Unpredictable or unknown factors not discussed in this Cautionary
Note could also have material adverse effects on forward-looking
statements.
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
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Forward-looking statements are
provided for the purpose of providing information about
management’s expectations and plans relating to the future. The
Company 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.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
Further information regarding Company is
available in the SEDAR database (www.sedar.com) and on the
Company’s website at: www.NouveauMonde.group
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