Mason Graphite Inc (TSX-V:LLG, OTCQX:MGPHF) announced that two leading independent proxy advisory firms have recommended that its shareholders vote in favour of the option and joint venture agreement with Nouveau Monde Graphite (TSX-V:NOU) Inc.
Both Institutional Shareholder Services (ISS) and Glass Lewis advised that Mason Graphite shareholders also vote in favour of the change of business, according to a statement from Mason Graphite.
Earlier this year, Mason Graphite and Nouveau Monde struck an agreement to develop and operate the former’s Lac Guéret property in Quebec.
READ: Mason Graphite inks joint venture with Nouveau Monde Graphite to develop Lac Guéret property in Quebec
As part of the deal, Nouveau Monde 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.
Nouveau Monde’s and Mason Graphite’s interest in the joint venture is expected to be 51% and 49% respectively, with Nouveau Monde appointed as operator.
Additionally, Nouveau Monde and Mason Graphite inked a non-binding letter of intent with Mason Graphite subsidiary, Black Swan Graphene Inc, to implement the latter’s graphene processing technology at Nouveau Monde’s demonstration plant.
Mason Graphite said that the deal will leverage Nouveau Monde’s expertise and commercialization capabilities, which will also allow realizing the full potential of the Lac Guéret property by increasing its scope of production to a minimum of 250,000 tonnes per annum of graphite concentrate.
Shareholders should also benefit from access to Nouveau Monde’s demonstration plant necessary to advance the project – an estimated value of C$30 million, according to Mason Graphite.
'Strategic sense'
Supporting its recommendation that Mason Graphite shareholders vote for the joint venture agreement, ISS stated: "The joint venture arrangement makes strategic sense as it enables the company to act on the new company business model, while minimizing the costs associated with exploration and further development.”
“The company appears to have conducted a lengthy strategic alternative review and in light of there being no significant governance concerns, shareholder approval of this resolution is warranted,” it added.
As for the change of business, ISS said that the change of business will formally align the company with its already current business activities.
As of July 4, 2022, the total votes cast represent 12.98% of the total shares issued and outstanding and both resolutions are being supported by 99.7% of the vote cast.
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