Mason Graphite Inc (TSX-V:LLG, OTCQX:MGPHF) and Nouveau Monde Graphite (TSX-V:NOU) Inc have entered into an investment agreement to develop and operate the former’s Lac Guéret property in Quebec, according to a joint announcement.
As part of the deal, NMG will make a concurrent equity investment in Mason Graphite of up to C$5 million, conditional upon at least $10 million in expenditures from NMG on the property and the completion of an updated feasibility study based on estimated production of at least 250,000 tons of graphite concentrate per year. A previous feasibility study published by Mason Graphite is based on 51,900 tons per year.
NMG’s and Mason Graphite’s interest in the joint venture is expected to be 51% and 49% respectively, with NMG appointed as operator.
READ: Mason Graphite updates on developments related to partner Black Swan Graphene's intent to go public
The venture will have full access to NMG’s Phase-1 natural graphite flake concentrator plant currently in operation in Saint-Michel-des-Saints, Québec in order to accelerate the qualification and commercialization of its graphite, the companies said. To date, NMG has invested approximately C$30 million in the demonstration plant;
NMG currently employs nearly 100 full-time employees, most of whom are focused exclusively on advanced graphite materials.
The property has a total measured and indicated resource of 65.5 million tons grading 17.2% contained graphite (cg) with a proven and probable reserve totaling 4.7 metric tons grading 27.8 cg.
Both parties are located in Quebec and this deal could be big for the province, according to Quebec Minister of Economy and Innovation Pierre Fitzgibbon.
“The partnership announced today has the potential to propel Québec’s graphite industry on the world stage and consolidate its position as a leader in North America,” Fitzgibbon said in a statement. “... By combining the strengths of the two most advanced projects in North America, both of which located in Québec, we are solidifying our battery value chain. These projects contribute to our ambition to build an integrated value chain, from mining to recycling, and to position Québec at the forefront of electrification.”
Black Swan
Additionally, NMG entered into a non-binding letter of intent with Mason Graphite subsidiary Black Swan Graphene Inc to implement the latter’s graphene processing technology at NMG’s demonstration plant.
The plan is to use NMG’s ore (grading an average of 4.5% graphitic carbon) in order to create a fully-integrated producing facility from graphite ore, through graphite concentrate, and to graphene finished products.
In a separate update on Black Swan, Mason Graphite announced the subscription receipt financing pursuant to its listing process with Dragonfly Capital Corp, for gross proceeds of approximately $7 million, which was upsized from $5 million due to high demand. That provided a pro forma valuation of Mason Graphite’s investment in Black Swan of approximately $17.7 million, the company said.
Black Swan also executed a multi-year master distributorship agreement with Gerdau Grafeno Ltda, a wholly owned subsidiary of Gerdau S. A., which will buy products from Black Swan to market, promote and resell in the Americas;
“We couldn’t be more excited to see Black Swan Graphene progress so rapidly since its inception and the investment made by Mason Graphite in the latter half of 2021,” Black Swan CEO Simon Marcotte said. “The idea that we now have a clear path towards commercial production and a distribution partner is a testament of how burgeoning the graphene industry has become.”
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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