NextSource Materials Inc. (TSX:NEXT, OTCQB:NSRCF) announced that it has finalized multiple term sheets with strategic investors to fund Phase 1 of its proposed Battery Anode Facility (BAF) in the Industrial City of Abu Dhabi, United Arab Emirates.
The company said the term sheets mark progress in its strategic financing process and support its path toward a final investment decision.
According to NextSource, the agreements were reached with several strategic investors, including local sovereign-linked entities and a Japanese strategic consortium that includes a diversified industrial trading group with experience in battery materials and infrastructure.
The company stated that the finalized term sheets follow the completion of the first stage of due diligence and an investor site visit on November 25, 2025, to the industrial building and site secured for the proposed facility in Abu Dhabi.
Under the proposed structure, the term sheets contemplate an equity investment at the project level, with new strategic partners potentially acquiring up to a 50% interest in the UAE Battery Anode Facility.
The investors would then fund their pro rata share of Phase 1 capital costs. NextSource said this structure is intended to limit dilution at the corporate level while introducing partners that may provide strategic and regional value to the project and the broader battery supply chain.
"The level and quality of funding interest we are seeing at the project level is a strong validation of our UAE BAF strategy,” NextSource CEO Hanré Rossouw said in a statement.
“These strategic investors recognize the importance of establishing secure, scalable, and geopolitically aligned anode supply chains outside of China. This process marks a significant first step toward funding our first commercial-scale BAF."
The company noted that the term sheets are non-binding and subject to customary conditions. NextSource said it is continuing technical, commercial, and legal due diligence while advancing discussions with the prospective investors, with the goal of finalizing a preferred funding structure and executing definitive agreements in the coming months.
NextSource added that it is advancing parallel workstreams to reach a final investment decision by the end of the first quarter of 2026, supported by progress in front-end engineering and design with its engineering partner, Stantec. Following a potential final investment decision and funding, the company said it would proceed with equipment procurement, installation, commissioning, and ramp-up in line with its phased development plan.
Shares of NextSource jumped on the update, adding almost 11% in early trade in Toronto.