NMG Files Preliminary Economic Assessment for the Uatnan Mining Project Amidst Positive Market Conditions and Strengthens its Management Team
February 27 2023 - 07:00AM
+ Preliminary economic assessment of the Uatnan Mining Project demonstrates attractive economics with an indicative NPV of C$ 2,173 million for a targeted production of approximately 500,000 tonnes of graphite concentrate per annum over a 24-year life of mine, making it one of the world’s largest graphite projects in development.
+ As lithium-ion battery production points to 8 TWh of capacity by 2030, the Uatnan Mining Project provides NMG with a robust and sizeable expansion plan for its Phase 3 in line with the Company’s commercial discussions with EV and battery manufacturers.
+ NMG’s leadership team to engage with the marketplace and investment community via upcoming participation at BMO Global Metals, Mining & Critical Minerals Conference, PDAC 2023 Convention and the Annual ROTH Conference.
+ Jean Cayouette appointed as Vice President, Metallurgy & Process, complementing NMG’s technical team with over 30 years of experience in the mining industry looking after the design, start-up, and optimization of various mineral processing plants.
Following the publishing of results on January 10, 2023, Nouveau Monde Graphite Inc. (“NMG“ or the “Company”) (NYSE: NMG, TSX.V: NOU) has filed the preliminary economic assessment (“PEA”) for the Uatnan mining project (the “Uatnan Mining Project”) located in Québec, Canada, with the securities commissions and regulatory authorities in Canada and the U.S. The PEA, conducted by engineering firms BBA Inc. (“BBA”) and GoldMinds Geoservices Inc. (“GMG”) according to National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”), was carried out in collaboration with Mason Graphite Inc. (“Mason Graphite”) (TSX.V: LLG, OTCQX: MGPHF) as the Uatnan Mining Project leverages the Lac Guéret deposit wholly-owned by Mason Graphite and subject to an investment agreement and option and joint venture agreement with NMG.
The PEA shows strong economics for NMG’s updated operational parameters and production volumes targeting the production of approximately 500,000 tonnes of graphite concentrate per annum over a 24-year life of mine (“LOM”). The proposed Uatnan Mining Project is currently one of the largest projected natural graphite productions being developed in the world. Consistent with NMG’s vertical integration strategy, the Uatnan Mining Project’s contemplated production would serve as feedstock for battery materials advanced manufacturing, providing refining expansion opportunity, increasing potential margins, and enhancing the Company’s growth profile.
In today’s dynamic market, the Uatnan Mining Project aligns with NMG’s commercial engagement amidst electric vehicle (“EV”) adoption reaching unprecedented levels with 10.3 million vehicles sold in 2022 (Rho Motion, February 2023). With 7,940 GWh of global lithium-ion battery production capacity projected by 2030, demand for advanced materials is set to increase up to fivefold, with graphite outpacing the other battery metals (Benchmark, January 2023) at 10,363,000 tonnes per annum for that market segment alone.
Arne H Frandsen, Chair of NMG, declared: “The market is actively searching for alternative sources of graphite, in significant volumes, to reduce its dependence on Chinese-controlled supply chains. NMG’s integrated operating model, from ore to battery materials, caters to western world’s EV and battery manufacturers with a turnkey, scalable, and ESG-driven production. The Uatnan Mining Project fits perfectly into the Company’s development plan, providing a large resource to complement our Phase-2 Matawinie Mine and Bécancour Battery Material Plant. Now more than ever, NMG is demonstrating its leadership in striving to establish North America’s largest natural graphite production to serve the energy transition.”
PEA Results: The Potential of the Uatnan Mining Project
NMG and its consultants revisited the fundamentals for the property development with a view to aligning the Uatnan Mining Project with today’s market opportunity. Design of the Uatnan Mining Project has been tailored to the needs of the battery and EV market, orienting production volumes for beneficiation in order to produce active anode material.
The Uatnan Mining Project optimizes the Mineral Resources (see Table 2) and aims to expand the original mining project tenfold by targeting the production of approximately 500,000 tonnes of graphite concentrate per annum. It would be operated as a conventional open pit with a concentrator near the deposit. In line with NMG’s responsible mining approach, plans include considerations for high standards in term of tailings management, progressive site closure with backfilling of the pit and a transition to fleet electrification. Québec’s affordable clean hydropower underpins the Uatnan Mining Project’s economic structure and supports NMG’s undeterred carbon-neutrality commitment.
Table 1: Operational Parameters of the Uatnan Mining Project
OPERATIONAL PARAMETERS
LOM
24 years
Nominal annual processing rate
3.4 M tonnes
Stripping ratio (LOM)
1.3:1
Average grade (LOM)
17.5% Cg
Average graphite recovery
85%
Average annual graphite concentrate production (LOM)
500,000 tonnes
Finished product purity
94% Cg
Cautionary Note: Graphite is expressed in graphitic carbon (“Cg”). The PEA is preliminary in nature and includes Inferred Mineral Resources, considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the PEA will be realized. Mineral resources that are not mineral reserves have not demonstrated economic viability. Additional trenching and/or drilling will be required to convert inferred mineral resources to indicated or measured mineral resources. There is no certainty that the resources development, production, and economic forecasts on which this PEA is based will be realized.
Table 2: Current Pit-Constrained Mineral Resource Estimate
IN-PIT CONSTRAINED MINERAL RESOURCES
Tonnes (Mt)
Grade (% Cg)
Cg (Mt)
Measured 5.75% < Cg < 25%
15.65
15.2
2.38
Measured Cg > 25%
3.35
30.6
1.02
Total Measured
19.02
17.9
3.40
Indicated 5.75% < Cg < 25%
40.29
14.6
5.89
Indicated Cg > 25%
6.33
31.6
2.00
Total Indicated
46.62
16.9
7.89
Indicated + Measured 5.75% < Cg < 25%
55.94
14.8
8.27
Indicated + Measured Cg > 25%
9.70
31.2
3.03
Total Measured + Indicated
65.64
17.2
11.30
Inferred 5.75% < Cg < 25%
15.35
14.9
2.28
Inferred Cg > 25%
2.47
31.8
0.79
Total Inferred
17.82
17.2
3.07
Notes :
The Mineral Resources provided in this table were estimated by M. Rachidi P.Geo., and C. Duplessis, Eng., (QPs) of GoldMinds Geoservices Inc., using current Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Reserves, Definitions and Guidelines.
Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, market or other relevant issues. The quantity and grade of reported Inferred Mineral Resources are uncertain in nature and there has not been sufficient work to define these Inferred Mineral Resources as indicated or Measured Mineral Resources. There is no certainty that any part of a Mineral Resource will ever be converted into Mineral Reserves.
The Mineral Resources presented here were estimated with a block size of 3mE x 3mN x 3mZ. The blocks were interpolated from equal-length composites (3 m) calculated from the mineralized intervals.
The Mineral Resource estimate was completed using the inverse distance to the square methodology utilizing three runs. For run 1, the number of composites was limited to ten with a maximum of two composites from the same drillhole. For runs two and three the number of composites was limited to ten with a maximum of one composite from the same drillhole.
The Measured Mineral Resources classified using a minimum of four drillholes. Indicated resources classified using a minimum of two drillholes. The Inferred Mineral Resources were classified by a minimum of one drillholes.
Tonnage estimates are based on a fixed density of 2.9 t/m3.
A pit shell to constrain the Mineral Resources was developed using the parameters presented in the PEA. The effective date of the current Mineral Resources is January 10, 2023.
Mineral Resources are stated at a cut-off grade of 5.75% C(g).
Estimates currently being at the market's peak as influenced by inflationary trends, NMG and its consulting firms have refined design, engineering, and construction parameters to enable cost optimization and competitive pricing.
Table 3: Economic Highlights of the Uatnan Mining Project
ECONOMIC HIGHLIGHTS
Uatnan Mining Project
Pre-tax NPV (8% discount rate)
C$ 3,613 M
After-tax NPV (8 % discount rate)
C$ 2,173 M
Pre-tax IRR
32.6%
After-tax IRR
25.9%
Pre-tax payback
2.8 years
After-tax payback
3.2 years
Initial CAPEX
C$ 1,417 M
Sustaining CAPEX
C$ 147 M
LOM OPEX
C$ 3,236 M
Annual OPEX
C$ 135 M
OPEX per tonne of graphite concentrate
C$ 268/tonne
Concentrate selling price
US$ 1,100/tonne
Annual revenues from Uatnan production
US$ 550,000,000
All costs are in Canadian dollars with the exception of the graphite sale price which is provided in US dollars.
The PEA shows that the Uatnan Mining Project is technically feasible as well as economically viable. With natural flake graphite expected to enter a structural deficit in 2023 due to the continued growth of the lithium-ion battery sector (Benchmark Mineral Intelligence, December 2022), market perspectives and NMG’s active commercial discussions indicate favorable conditions for commercializing the Uatnan Mining Project production.
On the basis of these positive results, NMG intends to launch an updated feasibility study in compliance with the option and joint venture agreement signed with Mason Graphite.
NMG is committed to extending its approach of open and proactive engagement with Indigenous Peoples and local stakeholders to the Uatnan Mining Project. The Company plans to maintain a transparent dialogue with the Innu First Nation of Pessamit as it advances the project development to ensure the respect of their rights, their culture, way of life and spirituality, the inclusion of their perspective and traditional knowledge, as well as the protection of the environment. NMG also pledges to expand its relationships with stakeholders from all horizons to foster mechanisms for collaboration and shape a project generating shared value.
The PEA entitled “NI 43-101 Technical Report – PEA Report for the Uatnan Mining Project”, with an effective date of January 10, 2023, was filed on SEDAR at www.sedar.com, on EDGAR at www.sec.gov and on NMG’s website. PEA results as outlined in this press release were issued on January 10, 2023.
Scientific and technical information presented in this press release was reviewed and approved by André Allaire, P.Eng. (BBA), Jeffrey Cassoff, P.Eng. (BBA), Vera Gella, P.Eng. (BBA), Claude Duplessis, P.Eng. (GoldMinds Geoservices), and Merouane Rachidi, P.Geo. (GoldMinds Geoservices) Qualified Persons as defined under NI 43-101.
Jean Cayouette
NMG appointed earlier this month Mr. Jean Cayouette, Eng., Vice President, Metallurgy and Process in replacement of Alain Dorval, who recently retired. A graduate of Laval University in mining and metallurgical engineering, Mr. Cayouette has over 30 years of experience in the mining industry. The design, start-up and optimization of various mineral processing plants have contributed to his technical and management experience in the fields of metallurgy, operations, maintenance, and environment. He is an accomplished corporate leader in operational optimization, mine site reclamation as well as sustainable development initiatives.
Eric Desaulniers, Founder, President and CEO of NMG, added: “The Uatnan PEA results are extremely positive for our shareholders, our potential customers and stakeholders in the Manicouagan region. NMG is now shifting gears as it progresses rapidly on a multi-lane expressway, advancing all three phases of its business strategy simultaneously to capture a historical market opportunity. Bringing on expertise and depth such as Jean’s provides our technical teams with solid backup to migrate Phase 1 operations into Phase 2 commercial production, while informing the next stages of development for the Uatnan Mining Project. I’m delighted to see another talented leader joining Team Nouveau Monde in our quest to drive sustainability into the battery/EV space. Bienvenue Jean! Happy retirement Alain!”
NMG Engagement with the Marketplace and Investment Sector
Critical minerals, the energy transition and NMG’s robust business strategy are gaining attention both in the marketplace and within investment circles. The Company’s leadership team is participating in BMO Global Metals, Mining & Critical Minerals Conference until March 1, 2023, to position NMG’s attractive integrated production model and associated opportunities.
Executives will join some 30,000 attendees at PDAC 2023 Convention in Toronto, Canada, from March 5 to 8, 2023, a world-renowned mineral exploration and mining event. NMG leaders will be at booth IE2830 and engage in a number of special events. Eric Desaulniers, President & CEO, will also present at the Critical Metals: Battery Materials Processing session on Tuesday, March 7, 2023, at 3:40 p.m.
And from March 12-14, 2023, NMG representatives will participate in the 35th Annual ROTH Conference in California, an event dedicated to targeted growth companies.
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 low-cost operations and 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
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