Nouveau Monde and Shinzoom partner to take on the NA Li-Ion battery anode material market
Nouveau Monde Graphite Inc. (TSXV: NOU | OTCQB: NMGRF) “Nouveau Monde” has signed a non-binding letter of intent (or “LOI”) with Hunan Zhongke Shinzoom Co. Ltd. “Shinzoom“, a Chinese lithium-ion battery anode producer and developer (the “Parties”).
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The purpose of the proposed collaboration between Nouveau Monde and Shinzoom is to tackle the growing needs of the North American Li-Ion battery anode material market. Under the developing agreement, the Parties seek to form a new corporation to be owned 51% by Shizoom and 49% by Nouveau Monde and which will exclusively market Shinzoom’s anode materials to lithium battery manufacturers in North America.
The Parties will also evaluate the feasibility of manufacturing Shinzoom’s anode material products (natural graphite, artificial graphite and composite graphite) in the Province of Quebec, where the cost of electricity and the quality of the infrastructure makes the project alluring.
The manufacturing of anode material products in the Province of Quebec would be developed through yet another new corporation which would be owned 51% by Nouveau Monde and 49% by Shinzoom.
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Éric Desaulniers, President and CEO of Nouveau Monde stated: “Shinzoom is a well-respected and established anode material producer in Asia. The collaboration between Shinzoom and Nouveau Monde, if realized by the execution of the definitive agreements, would provide North American battery makers with much needed high-quality and competitively-priced anode materials. This strategy would allow Nouveau Monde to become more vertically integrated and initiate a dialogue with customers. Mr. Desaulniers continued, “Our graphite project is not covered in the non-binding LOI, but anodes require graphite and in the event of potential manufacturing of Shinzoom’s anode material products in Quebec it would obviously be beneficial for Nouveau Monde’s graphite products. The signing of this non-binding LOI paves a way for Nouveau Monde to actively engage customers today as well as develop its Matawinie graphite project, with a goal of maximizing downstream graphite market exposure.”
Nouveau Monde is now evaluating its Matawinie graphite project discovered in 2015 with the objective of becoming the largest graphite mine in North America.The company published a Preliminary Economic Assessment, completed according to NI 43-101 guidelines, in June of 2016. (see press release dated June 22, 2016)
The project is located in the Saint-Michel-des-Saints area, some 120 km north of Montreal, Quebec, Canada. It has direct access to all needed infrastructure, labor as well as green and affordable hydroelectricity. NMG is developing its project with the highest corporate social responsibility standards while targeting a low environmental footprint with a net zero carbon emission operation.The project highlights are as follows:
- Pre-tax Net Present Value (NPV) of $403.7 million at an 8% discount rate;
- After-tax NPV of $237.0 million at an 8% discount rate;
- Pre-tax Internal Rate of Return (IRR) of 31.2%;
- After-tax IRR of 24.7%;
- Life of Mine (LOM) of 25.7 years;
- Mine Pay Back estimated at 2.9 years (Pre Tax);
- Mine Pay Back estimated at 3.5 years (After Tax);
- LOM Revenue of $2,430.9 million (Life of Mine revenue);
- LOM Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) of $1,586.7 million;
- Initial Capital Costs (Capex) of $144.5 million (including contingency of $22.4 million);
- Operating Expenditures (Opex) of $32.95 million per year or $660 per tonne of concentrate;
- Average sales price of graphite concentrate at $1,492 USD per tonne;
- USD$/CAD conversion rate of 1.28.
- Annual average full production of 49,921 tonnes of graphite concentrate;
- 48% Cg average grade LOM graphite content contained in the mineralization;
- Graphite milling recovery above 89.5%;
- Finished product/ concentrate purity >97.1% Cg;
- Stripping ratio (LOM) of 0.94:1.
Hunan Zhongke Shinzoom Co., Ltd. is a hi-tech enterprise specializing in the R&D and production of LiB anode materials in China. Taking the R&D of power LiB anode materials as its cardinal direction, its products have also covered multi-fields of individual consumer LiB like Aluminum-can Type, Cylindrical Type, Polymer Type, etc. It’s one of the anode material suppliers for E-buses used in Beijing Olympic 2008, Shanghai World Expo 2010 and Shenzhen Universiade 2011 held in China, and had gained a high reputation and a profound influence in the industry.
Dr. Luc C. Duchesne is a Speaker and Author with a PhD in Biochemistry. With three decades of scientific and business experience, he has published ... <Read more about Dr. Luc Duchesne>