MONTREAL, Dec. 17,
2024 /CNW/ - Canada Growth Fund Inc. ("CGF") is
pleased to announce that it has entered into a definitive agreement
with respect to a ~C$35.6 million
private placement with Nouveau Monde Graphite Inc. (TSXV: NOU)
(NYSE: NMG) ("NMG"), a Québec-based integrated graphite mining and
processing company. With operations in Saint-Michel-des-Saints and Bécancour, NMG is
developing an integrated value chain to transform natural graphite
into active anode material, a critical component of lithium-ion
batteries. NMG's Phase-2 Matawinie Mine and Bécancour Battery
Material Plant represent one of the most advanced integrated
critical minerals opportunities in Canada and will support North America's efforts to build more
resilient supply chains to the benefit of their domestic
economies.
In connection with the investment, CGF will subscribe to
~19.8 million common shares of NMG at a share price of
~C$1.80/share. In addition, CGF will
receive an equal number of common share purchase warrants, which
can be exercised upon the occurrence of a positive Final Investment
Decision ("FID") to acquire additional common shares of NMG at a
price of US$2.38 per share. CGF's
investment will be alongside an investment by Investissement Québec
under the same terms as CGF's investment, for aggregate proceeds to
NMG of ~C$71million.
CGF has a mandate to capitalize on Canada's abundance of natural resources and
strengthen critical supply chains to support the country's
long-term economic and environmental prosperity. Critical minerals,
such as graphite, are used in the development of many technologies
that are essential to the global energy transition. CGF's flexible
and innovative mandate enables it to invest in projects and
companies that advance the development of new or existing supply
chains of critical minerals, including through direct equity and
debt investments, co-investments and primary fund commitments in
mining activities and related infrastructure, including processing,
manufacturing, and recycling.
"Investors and policymakers alike recognize the strategic
importance of securing a stable supply of critical minerals, which
are essential for high-tech industries, from defence to renewable
energy and batteries," said Patrick
Charbonneau, President and Chief Executive Officer of Canada
Growth Fund Investment Management Inc., the exclusive manager of
CGF. "CGF is pleased to invest in NMG and looks forward to
supporting the company in its journey to create the largest fully
integrated natural graphite production facility in North America."
With its first direct investment in Québec and in the mining
sector, CGF is fuelling economic growth and job creation, while
also strengthening the supply chain of key materials for
Canada and its trading partners.
CGF is investing capital at an important stage in NMG's development
where CGF's capital, alongside Investissement Québec's
capital, enable the company to advance its mine and processing
facility to a FID.
"As a project developer, NMG requires credible financial
partners to share risks and unlock value in this strategic and
geopolitically important sector," explained Eric Desaulniers, Founder, President and CEO of
NMG. "This investment by Canada Growth Fund and Investissement
Québec will enable our team to make tangible advancements and place
strategic orders in preparation for our project execution. We are
committed to delivering high-performing and reliable active anode
materials to the North American battery and electric vehicle ("EV")
markets, contributing to a local, sustainable and reliable supply
chain."
As previously-disclosed by NMG, Panasonic Energy Co., Ltd.
("Panasonic Energy"), a wholly owned subsidiary of Panasonic
Holdings Corporation ("Panasonic") (TYO: 6752), and General Motors
Holdings LLC, a wholly owned subsidiary of General Motors Co.
(collectively, "GM") (NYSE: GM), have entered into multi-year
offtake agreements for NMG's active anode material, representing
approximately 85% of NMG's planned Phase-2 integrated production.
As announced in February 2024,
Panasonic and GM have made respective initial US$25M investments, alongside their respective
offtake agreements. Upon a positive FID decision and meeting of
established conditions, Panasonic and GM, directly or through an
affiliate, or together with potential co-investors, would
participate in future funding for a total amount valued at
approximately US$275 million. See
NMG's press release dated February 15,
2024.
Closing of CGF's and Investissement Québec's investments is
subject to standard closing conditions, including the approval of
the TSX Venture Exchange and the New York Stock Exchange.
Highlights
- It is expected that NMG will raise ~C$71
million to fund expenditures to reach an FID, currently
targeted for 2025.
- Capital will be funded equally by CGF and Investissement
Québec, an existing investor in the company.
- CGF's investment will be made through the subscription to
common shares of NMG.
- As part of the transaction, CGF will obtain the option to
invest additional funds at FID. A portion of said investment would
be in the form of warrants secured with the transaction.
- NMG has received a ministerial decree authorising the Matawinie
Mine and key permits to support preliminary infrastructure work on
both sites.
- On December 12, 2024, NMG and the
Conseil des Atikamekw de Manawan, representing the Atikamekw
Nehirowisiw First Nation of Manawan, announced they had concluded
an Impact Benefit Agreement with respect to the Matawinie mining
project.
- In January 2020, the Municipality
of Saint-Michel-des-Saints and NMG
signed a collaboration and benefit-sharing agreement with respect
to the Matawinie mining project.
About the Canada Growth Fund
CGF is a $15 billion arm's length
public investment vehicle that helps attract private capital to
build Canada's clean economy by
using investment instruments that absorb certain risks, in order to
encourage private investment in low carbon projects, technologies,
businesses, and supply chains.
Further information on CGF's mandate, strategic objectives,
investment selection criteria, scope of investment activities, and
range of investment instruments can be found on www.cgf-fcc.ca.
About CGF Investment Management
In Budget 2023, the Government of Canada announced that PSP Investments, through
a wholly-owned subsidiary, would act as the asset manager for CGF.
Canada Growth Fund Investment Management Inc. has been incorporated
to act as the independent and exclusive asset manager for CGF.
Advisors
Davies Ward Phillips &
Vineberg LLP, TD Securities Inc., Global Graphite Advisory LLC and
Wood Mackenzie acted as advisors to CGF and Canada Growth Fund
Investment Management Inc. in connection with CGF's investment.
SOURCE Canada Growth Fund Inc.
