NextSource shares storm forward on profitable Molo graphite plant testing

Stated CEO Craig Scherba: “2021 was a transformative 12 months for the corporate, and we’re very happy to start the New 12 months with the profitable completion of the manufacturing unit acceptance testing of our Molo processing plant. We are able to now shift our focus to attaining our subsequent main milestones for this 12 months, which embody finishing website works, and the supply, set up and commissioning of the processing plant.”

The processing plant is able to processing 240,000 tonnes every year of ore to provide on common 17,000 tonnes of the corporate’s patented high-quality SuperFlake graphite focus focused on the battery sector.

In accordance with the corporate, manufacturing unit acceptance testing was the ultimate validation step after the fabrication and meeting of the processing plant gear. It was accomplished by an engineering, procurement and development contractor of their off-shore meeting facility beneath the supervision of SGS, a world chief in course of plant testing, inspection, and course of certification.

Part 1 of the Molo graphite mine is totally funded and, when commissioned, will grow to be one of many few working graphite mines outdoors of China.

Main milestones

NextSource has been ticking off main progress milestones in establishing the unbiased Molo graphite mine in Madagascar by way of 2021.

In November, it introduced a contract to unbiased energy producer CrossBoundary Vitality for the long-term provide of photo voltaic and thermal era to energy the operations. The contract is for a 20-year time period and has been designed to scale with the manufacturing output of the Molo mine, the place supply of energy will improve in lockstep with all future growth capability necessities.

In November, the corporate additionally introduced it had signed a binding, amended and restated collaboration settlement with important processors of anode materials throughout the Tesla provide chain to include a proprietary and established graphite coating course of to its battery anode facility.

The power entails a three-way collaboration between NextSource’s Japanese offtake associate and the Japanese associate’s Chinese language spheronized and purified graphite processing associate.

The Japanese Accomplice is a outstanding Japanese buying and selling firm that could be a vital SPG provider for anode materials in lithium-ion batteries for EV and HEV functions. It at the moment provides graphite anode materials to most Japanese automotive OEMs and the Tesla provide chain.

This collaboration is a part of NextSource’s downstream development plan. It companions the corporate with outstanding and established processors and suppliers of graphite anode materials to the Tesla provide chain and different international automotive OEMs. NextSource is positioning to be a big strategic provider of high-quality flake graphite to main battery anode clients globally whereas concurrently gaining a right away foothold into the high-growth markets for EVs and the burgeoning power storage market that will probably be reliant on graphite anode materials.

In Might of 2021, NextSource introduced it had secured an offtake settlement with Germany-based thyssenkrupp Supplies Buying and selling to produce as much as 35,000 tonnes per 12 months of its branded SuperFlake graphite merchandise.

The settlement offers a minimal of seven,300 tonnes per 12 months to be shipped when the primary development section is accomplished in 2022.

Expertise acquisition

Maybe most significantly, NextSource was in 2021 capable of appeal to world-class expertise to the board. NextSource hit international headlines after former Xstrata boss Sir Mick Davis threw his weight behind the battery metals sector. His funding car, referred to as Blue Imaginative and prescient Sources, endorsed the Molo mission with a $29.5 million funding, totally funding the mission’s development.

The corporate mentioned on the time the funds can be enough to place the massive flake graphite deposit into manufacturing as early because the second quarter of 2022. Sir Davis additionally turned the corporate’s chairman.

In July, the corporate attracted one other former Xstrata Nickel govt with the appointment of Ian Pierce to the board of administrators. Earlier than main Xstrata Nickel, Pierce was the previous COO of Falconbridge Restricted, which Xstrata Plc acquired in 2006. Xstrata Plc’s acquisition of Falconbridge was one of many largest mining takeovers globally and one of many largest takeover bids in Canadian historical past.

An up to date feasibility research launched in September 2019 outlined a phased growth strategy. The primary section will produce 17,000 tonnes of graphite a 12 months over the primary two years and a second section starting in 12 months three of 45,000 tonnes per 12 months. The research outlined a mine lifetime of 30 years and preliminary capex for section certainly one of $21 million and section two of $39.1 million. (Capex and dealing capital mixed to convey the primary section estimate to about $25 million.)

The deposit comprises 100.4 million measured and indicated tonnes grading 6.3% carbon (graphite) for six.3 million tonnes of graphite and inferred sources of 40.9 million tonnes grading 5.8% carbon for two.4 million tonnes of graphite. The useful resource estimate used a cut-off grade of two%.

NextSource shareholders have been on a white-knuckle journey over the previous 12 months, seeing the fairness commerce between C90c and C$5.30 apiece. Regardless of the volatility, at C$4.49 on Thursday, the fairness remains to be up 400% over the 12-month body, capitalizing it at C$294.68 million ($236 million).


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