Eric Desaulniers, President, and CEO of NMG, recaps the highlights of today’s parallel announcements in a short video captured at the Company’s battery material laboratory: https://youtu.be/kRkK3pPbqn4. 

A Solid Commercial Backing

The multiyear offtake agreements cover the supply of a committed combined annual volume of 36,000 tonnes of active anode material by NMG to the Anchor Customers, representing approximately 85% of the Company’s Phase-2 production. With agreed upon pricing formula linked to future prevailing market prices and project financing ratio requirements, NMG can now demonstrate strong long-term bankability underpinnings to lenders, investors, and shareholders.

In parallel, the Company maintains intensive commercial discussions and continued product qualification with other tier-1 battery manufacturers for the balance of its Phase-2 production. Current market dynamics in North America, reflecting recent Chinese graphite exportation limitations and stringent U.S. sourcing requirements for battery materials, favorably position NMG’s local production. The Company’s recent acquisition of the Uatnan Mining Project for its Phase-3 expansion also provide an attractive supply opportunity for Western EV and battery manufacturers looking to secure and grow active anode material volumes as their production increases.

Map of NMG’s integrated extraction and advanced manufacturing routes to supply Panasonic Energy and GM.

Strategic Participation into NMG’s Business Plan

The Anchor Customers, directly or through an affiliate, have each agreed to make an initial US$25 million equity investment in NMG subject to certain conditions (the “Tranche 1 Investment”), for a total of US$50 million, to support the advancement of NMG’s Phase-2 operations – the Matawinie Mine and the Bécancour Battery Material Plant – aligned with their respective battery specifications.

In line with the previously announced framework agreement between NMG, Panasonic Energy and Mitsui, the Company’s strategic partner Mitsui supports the attainment of this milestone and further development efforts towards a final investment decision (“FID”) by investing US$25 million, subject to regulatory approvals and the requirements of MI 61-101 (as defined below), pursuant to which Mitsui has agreed to subscribe for 12,500,000 Common Shares in the capital of NMG (the “Common Shares”) and 12,500,000 warrants on the same pricing and other terms as the Tranche 1 Investment, such proceeds to be used to repurchase Mitsui’s convertible note dated November 8, 2022, as amended and restated (the “Mitsui Convertible Note”). NMG will also enter into an investor rights agreement (the “Investor Rights Agreement”) and registration rights agreement with Mitsui at the closing of their investment. Pursuant to the Investor Rights Agreement, Mitsui will be required to “lock-up” its securities for a period of 12 months from the date of their investment. The Investor Rights Agreement also provides Mitsui with certain rights relating to its investment in NMG, namely certain board nomination and anti-dilution rights. Mitsui will be subject to a standstill limitation whereby it will not be able to increase its holdings beyond 20% of the issued and outstanding NMG Common Shares for a period of three years.

Long-time strategic investor Pallinghurst has also agreed to participate via a US$12.5-million investment, also subject to regulatory approvals and the requirements of MI 61-101, pursuant to which Pallinghurst has agreed to subscribe to 6,250,000 Common Shares and 6,250,000 warrants on the same pricing and other terms as the Tranche 1 Investment, such proceeds to be used to repurchase Pallinghurst’s convertible note dated November 8, 2022, as amended and restated (the “Pallinghurst Convertible Note” and together with the Mitsui Convertible Note, the “Notes”). NMG will also enter into a registration rights agreement with Pallinghurst at the closing of their investment.

Such warrants are generally exercisable in connection with the Tranche 2 Investment at FID in accordance with their terms. Each warrant will entitle the holder thereof to acquire one Common Share (a “Warrant Share”) at a price per Warrant Share equal to the lower of (i) the amount in US$2.38 per Common Share and (ii) the amount in US Dollars per Common Share equal to the closing price of the Common Shares on the trading day immediately following the date on which the investments described above are announced. The exercise of the warrants is subject to certain ownership limitations.

Upon a positive FID, the parties’ commercial relationship is also intended to expand through further investments into NMG as part of the construction financing. The Anchor Customers, directly or through an affiliate, together with potential co-investors, intend to participate in future funding of a total amount valued at approximately US$275 million, subject to certain conditions and a maximum ownership threshold agreed between the relevant parties. Assisted by its financial advisors, the Company continues to advance financing efforts, including with its other convertible noteholder, and is engaged with export credit agencies, governments, and strategic investors, in addition to customers to frame a robust capital structure that leverages international debt, government funding and equity. BMO Capital Markets is acting as financial advisor to the Company in connection of certain of the transactions described herein.

Related Party Disclosure

Currently, Mitsui may have beneficial ownership of, or control or direction over, directly or indirectly, the Mitsui Convertible Note that can be converted into units comprising an aggregate of 5,000,000 Common Shares and 5,000,000 Common Share purchase warrants (the “Mitsui Warrants”), as well as 1,052,695 Common Shares issuable in connection with accrued interest under the Mitsui Convertible Note, which in the aggregate represent approximately 14.14% of the issued and outstanding Common Shares on a diluted basis (assuming conversion of the Mitsui Convertible Note and exercise of the Mitsui Warrants). In connection with the Mitsui investment described above, Mitsui is expected to acquire 12,500,000 Common Shares and 12,500,000 Common Share purchase warrants (the “Mitsui Tranche 1 Warrants”). Following the completion of the investments by GM, Panasonic, Mitsui, and Pallinghurst and the repayment of the Mitsui Convertible Note, Mitsui is expected to have beneficial ownership of, or control or direction over, directly or indirectly, an aggregate of 13,552,695 Common Shares and 12,500,000 Mitsui Tranche 1 Warrants, which in the aggregate will represent approximately 20.85% of the issued and outstanding Common Shares on a partially diluted basis (assuming exercise of the Mitsui Tranche 1 Warrants).

Currently, Pallinghurst may have beneficial ownership of, or control or direction over, directly or indirectly, 11,541,013 Common Shares and the Pallinghurst Convertible Note that can be converted into units comprising an aggregate of 2,500,000 Common Shares and 2,500,000 Common Share purchase warrants (the “Pallinghurst Warrants”), as well as 526,348 Common Shares issuable in connection with accrued interest under the Pallinghurst Convertible Note, which in the aggregate represent approximately 23.50% of the issued and outstanding Common Shares on a diluted basis (assuming conversion of the Pallinghurst Convertible Note and exercise of the Pallinghurst Warrants). In connection with the Pallinghurst investment described above, Pallinghurst is expected to acquire 6,250,000 Common Shares and 6,250,000 Common Share purchase warrants (the “Pallinghurst Tranche 1 Warrants”).  Following the completion of the investments by GM, Panasonic, Mitsui, and Pallinghurst and the repayment of the Pallinghurst Convertible Note, Pallinghurst is expected to have beneficial ownership of, or control or direction over, directly or indirectly, an aggregate of 18,317,361 Common Shares and 6,250,000 Pallinghurst Tranche 1 Warrants, which in the aggregate will represent approximately 20.70% of the issued and outstanding Common Shares on a partially diluted basis (assuming exercise of the Pallinghurst Tranche 1 Warrants).

Mitsui and Pallinghurst are “interested parties” in respect of the transactions described herein, and their investment as well as the repayment of the Notes each constitutes a “related party transaction” (collectively, the “Related Party Transactions”) within the meaning of Regulation 61-101 respecting Protection of Minority Security Holders in Special Transactions (“MI 61-101”) and the TSX Venture Exchange Policy 5.9 – Protection of Minority Security Holders in Special Transactions.

The independent directors of the Company, determined in accordance with MI 61-101, are responsible for (i) evaluating the applicability of MI 61-101 to the Related Party Transactions; (ii) considering whether any exemptions from any formal valuation and/or minority approval requirements of MI 61-101 determined to be applicable would be available to NMG in connection with the Related Party Transactions or whether to seek regulatory exemptive relief in respect thereof; and (iii) if required or advisable, determining and confirming whether a formal valuation pursuant to MI 61-101 is required in connection with the Related Party Transactions and, if required or advisable, determining the terms of such valuator’s engagement (including the fees to be paid to such valuator) and supervising the preparation of such valuation.

The Related Party Transactions are conditional on compliance with the requirements of MI 61-101 or NMG receiving exemptive relief from the requirements of MI 61-101. A material change report in respect of the Related Party Transactions will be filed by NMG.

Settlement of Accrued Interests

Upon the approval of the TSX Venture Exchange and the New York Stock Exchange (the “Exchanges”), the accrued interest owed to Pallinghurst and Mitsui (together, the “Holders”) under the Notes for the period from January 1, 2024, until the date of their respective subscription agreements, will satisfy as follows. 232,191 Common Shares at a price of US$2.07, representing an aggregate amount of US$480,637, will be issued and share certificates will be delivered to the Holders upon the repurchase of the Notes. The issuance of Common Shares is subject to the approval of the Exchanges and, when issued, will be subject to a hold period of four (4) months and one day.  Upon repurchase of the Notes, previously announced reserved but unissued Common Shares in respect of accrued interest will be issued and delivered to the Holders.

Complementary Information

Shareholders and analysts are invited to attend a webcast Investor Briefing this morning, Thursday, February 15, 2024, at 10:30 a.m. ET. Hosted by President and CEO Eric Desaulniers with the participation of NMG’s Management Team, the briefing will entail a technical presentation followed by a question-and-answer session. Registration should be completed prior to the start of the briefing at: https://us06web.zoom.us/webinar/register/WN_VmhZvajOQJ2yICWrk9ySzQ.

Members of the media may download high-resolution files of the brief interview with Eric Desaulniers on this announcement at https://we.tl/t-t9Nwt9RiQR and make additional interview or information requests to Julie Paquet, Vice President, Communications & ESG Strategy at NMG.

Completion of the transactions described herein remains subject to customary regulatory approvals, including approval of the TSX Venture Exchange and NYSE, and other customary closing conditions. Copies of the referenced subscription, offtake, investor rights and registration rights agreements will be available on the Company’s page on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov, and the summary of the such agreements contained herein is qualified in its entirety by the reference to such documents.

About Nouveau Monde Graphite

Nouveau Monde Graphite is striving to become a key contributor to the sustainable energy revolution. The Company is working towards developing a fully integrated source of carbon-neutral battery anode material in Québec, Canada, for the growing lithium-ion and fuel cell markets. With enviable ESG standards, NMG aspires to become a strategic supplier to the world’s leading battery and automobile manufacturers, providing high-performing and reliable advanced materials while promoting sustainability and supply chain traceability. www.NMG.com

About Panasonic Energy

Panasonic Energy established in April 2022 as part of the Panasonic Group’s switch to an operating company system, provides innovative battery technology-based products and solutions globally. Through its automotive lithium-ion batteries, storage battery systems and dry batteries, the company brings safe, reliable, and convenient power to a broad range of business areas, from mobility and social infrastructure to medical and consumer products. Panasonic Energy is committed to contributing to a society that realizes happiness and environmental sustainability, and through its business activities the company aims to address societal issues while taking the lead on environmental initiatives. For more details, please visit www.Panasonic.com/global/energy

About GM

General Motors (NYSE:GM) is a global company focused on advancing an all-electric future that is inclusive and accessible to all. At the heart of this strategy is the Ultium battery platform, which will power everything from mass-market to high-performance vehicles. General Motors, its subsidiaries and its joint venture entities sell vehicles under the Chevrolet, Buick, GMC, Cadillac, Baojun and Wuling brands. More information on the company and its subsidiaries, including OnStar, a global leader in vehicle safety and security services, can be found at www.gm.com.

About Mitsui

Mitsui & Co., Ltd. (TYO: 8031.JP) is a global trading and investment company with a diversified business portfolio that spans approximately 63 countries in Asia, Europe, North, Central & South America, The Middle East, Africa and Oceania.

Mitsui has about 5,500 employees and deploys talent around the globe to identify, develop, and grow businesses in collaboration with a global network of trusted partners. Mitsui has built a strong and diverse core business portfolio covering the Mineral and Metal Resources, Energy, Machinery and Infrastructure, and Chemicals industries.

Leveraging its strengths, Mitsui has further diversified beyond its core profit pillars to create multifaceted value in new areas, including innovative Energy Solutions, Healthcare & Nutrition and through a strategic focus on high-growth Asian markets. This strategy aims to derive growth opportunities by harnessing some of the world’s main mega-trends: sustainability, health & wellness, digitalization and the growing power of the consumer.

Mitsui has a long heritage in Asia, where it has established a diverse and strategic portfolio of businesses and partners that gives it a strong differentiating edge, provides exceptional access for all global partners to the world’s fastest growing region and strengthens its international portfolio.

For more information on Mitsui & Co’s businesses visit, www.Mitsui.com