Hydro-Québec (HQ) and Nouveau Monde Graphite (NMG) have signed a license and a research and development agreements respecting the processing of graphite for use in lithium-ion batteries. The partners hope that this collaboration will enable NMG to commercialize battery material technologies developed by HQ over the past 30 years.

The agreement provides for HQ to assist NMG in setting up a small-scale process in its demonstration plant in Saint-Michel-des-Saints, starting by the end of this year. The success of this small-scale process will lead NMG to eventually build an anode material fabrication plant with a capacity of up to 100,000 tonnes per year. This anode material fabrication plant is in addition to and complements NMG’s mining project.

NMG will support in part the needs for graphite of the anode material fabrication plant. To support these projected 100,000 tonnes per year, NMG intends to enter into supply agreements with other graphite suppliers. Some high-level samples testing are already being conducted to determine the compatibility of graphite coming from another supplier, further sampling testing will be done.

License and R&D agreements. The deal between HQ and NMG includes a license and a Research and development agreement respecting the processing of graphite for use in lithium-ion batteries. The agreements will enable NMG to use HQ’s patented technologies for the micronization, spheronization, purification and natural graphite coating to serve the lithium-ion battery market.

The partnership’s objectives are as follows:

• HQ and NMG will develop a functional and cost-effective process to transform flake graphite into high-quality graphite products suitable for lithium-ion batteries.

• HQ will assist NMG in its material qualification processes with leading lithium-ion battery manufacturers.

• HQ will assist NMG in the small-scale industrialization of its process in its demonstration plant in Saint-Michel-des-Saints.

• Any new intellectual property developed from this partnership will be jointly owned by HQ and NMG on a 50/50 basis.

NMG’s financing. In connection with these agreements, NMG has closed a non-brokered private placement of 6,666,667 units in the capital of the Corporation, at a price of $0.30 per unit for an aggregate gross proceeds of $2,000,000. Each Unit consists of one common share and one half of one common share purchase warrant. Each full warrant will entitle its holder to subscribe one common share of NMG at a price of $0.40 for a period of 24 months following the closing of the Offering.

The securities issued pursuant to the Offering are subject to a restricted period of four months and a day, from the date of issuance under applicable Canadian securities legislation.

NMG expects to be able to file shortly all required documentation to satisfy the conditional acceptance of the TSX Venture Exchange.

In 2015, Nouveau Monde Graphite discovered a major and high-quality graphite deposit on its Matawinie property, located in Saint-Michel-des-Saints, 150 km (93 miles) north of Montreal, Quebec. The discovery led to the announcement of a pre-feasibility study on 25 October 2017. The pre-feasibility study results reveal projected graphite concentrate production levels of 52,000 tonnes per year over a 27-year period. In the summer of 2018, NMG will be launching its first tonnes of concentrated graphite flake manufactured in demonstration plant. NMG’s Demonstration plant as a production capacity of 2000 tonnes of concentrated flake graphite for a two-year period.

The company is planning to establish a large-scale graphite secondary transformation facility, catering the needs of the lithium-ion battery market.