Nouveau Monde (NMG) Stock Surges On Supply Deal News

Today, early trade showed a 20.48% increase in the price of Nouveau Monde Graphite Inc. (NYSE: NMG) shares, bringing them to $2.51. This spike coincided with the news of a big supply agreement.

The agreement is between Nouveau Monde (NMG) and General Motors Holdings LLC, a division of General Motors Co. (NYSE: GM), and calls for the supply contract to be signed upon the Tranche 1 Investment’s conclusion. This deal states that, once it reaches full production, NMG will supply GM with 18,000 tonnes per year of its anticipated Phase-2 active anode material production for a first six-year term.

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In conjunction with the Supply Agreement, NMG and GM have also entered into a subscription agreement. This agreement stipulates that GM will make a substantial equity investment of US$150 million in NMG to support the development of what is anticipated to be the first fully integrated natural graphite active anode material project in North America.

The agreement positions Nouveau Monde to become a local, carbon-neutral, reliable, and substantial source of natural graphite, aligning with environmental, social, and governance (ESG) principles. GM’s initial investment of US$25 million (Tranche 1 Investment) will bolster NMG’s Phase-2 operations, including the Matawinie Mine and the Bécancour Battery Material Plant, tailored to GM’s battery specifications.

An additional US$125 million equity subscription is earmarked upon the fulfillment of certain prerequisites and a favorable final investment decision (“FID”). The significance of this collaboration is underscored by the pivotal role graphite plays in EV battery production, with over 95% of anode components comprising this material.

The responsibly sourced natural graphite from NMG’s Matawinie Mine will be processed at the Bécancour Battery Material Plant before integration into GM’s EV batteries. With GM’s long-term commitment and financial backing, Nouveau Monde is poised to advance its Phase-2 Bécancour Battery Material Plant, positioned adjacent to GM’s and POSCO Future M’s Cathode Active Material processing facility.

This development enhances NMG’s standing with potential lenders, strategic investors, and governments, bolstering project financing prospects linked to a favorable FID decision for its integrated Phase-2 Matawinie Mine and Bécancour Battery Material Plant. Collaborative efforts with lenders have been instrumental in navigating the financing process, ensuring alignment with GM’s objectives and project viability.