Nano One Materials Corp (TSX:NANO, OTC:NNOMF) shares rallied early Monday on news that Sumitomo Metal Mining Co. (SMM) will make a strategic equity investment in the company of almost C$16.9 million as part of a collaboration agreement.
Shares of the clean technology company added 15% to C$3.03 shortly before midday in Toronto.
Under the agreement, Nano One said the two companies will work together to accelerate the commercial production of lithium iron phosphate (LFP) cathode active materials (CAM) and nickel-rich CAM chemistries, such as lithium nickel manganese cobalt oxide. SMM will invest C$16,879,949.85 in a non-brokered placement in return for 5,498,355 Nano One common shares at C$3.07 each.
Nano One said the proceeds will be used mostly to fund the conversion of its existing Candiac LFP manufacturing facility to a One-Pot production scale pilot plant, nickel- and manganese-rich engineering, and piloting activities, and for working capital.
The company noted that SMM has a 400-year-plus history of mining, smelting, refining, and processing metals with a large and diverse customer base that includes nickel-rich cathode materials for lithium-ion battery and electric vehicle producers in recent years.
In 2022, it expanded its CAM product portfolio to include LFP and has partnered with Nano One to accelerate its efforts.
"This announcement builds on years of technology development and CAM production by both Sumitomo Metal Mining and Nano One Materials and it expresses our joint ambitions to develop and lead world-class battery ecosystems and long-term partnerships in the production of LFP and NMC cathode materials,” commented Nano One CEO Dan Blondal.
“Sumitomo Metal Mining is a world-class leader, having pioneered nickel-rich cathode active materials for long-range electric vehicle battery applications. We are proud to be partnered with such a reputable and deeply experienced organization and to be jointly addressing emerging market demand in Japan, North America and other global regions.”
Nano One said it plans to build its first commercial LFP plant adjacent to its existing production scale pilot facility in Candiac, Québec and is nearing completion of a Front-End Loading Pre-Feasibility Study that will help determine key factors including costs, production line size, total capacity and timing.
With LFP becoming more important to the electric vehicle (EV) battery market, the company said it can be produced responsibly and cost-effectively in North America, Japan, and other jurisdictions using technology and know-how from both organizations.
“Nano One has proven LFP production experience and has demonstrated that their latest technology works at scale, their materials perform, and their costs are competitive,” added Katsuya Tanaka, managing executive officer and general manager of SMM’s battery material division.
“Nano One is also aligned with our belief that less waste and energy-intensive CAM production technology is one of the most important keys to contribute to developing EV markets. This is particularly important in Japan, North America, and other emerging markets where the race to meet net-zero goals and establish battery supply chains is just beginning.”
~Updated with share price movement~
Contact the author at stephen.gunnion@proactiveinvestors.com