Nouveau Monde Graphite Inc. (TSX.V: NOU; OTCQX: NMGRF; Frankfurt: NM9): Developing the Largest Graphite Operation in the Western World; Interview with Eric Desaulniers, President and CEO; PDAC Booth 2830
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By Dr. Allen Alper, PhD Economic Geology and Petrology, Columbia University, NYC, USA
on 2/20/2020
Nouveau Monde Graphite Inc. (TSX.V: NOU; OTCQX: NMGRF; Frankfurt: NM9) is developing the Matawinie graphite mining project, located in Saint-Michel-des-Saints, 150 km north of Montréal, QC, and it is the largest graphite operation projected in the Western world. The 2018 Feasibility Study revealed strong economics, with projected graphite concentrate production of 100,000 tons per year, with an average concentrate purity of 97%, over a 26-year period. We learned from Eric Desaulniers, President and CEO of Nouveau Monde, that they are targeting the steel making industry market and the lithium-ion battery market. Currently, Nouveau Monde operates a demonstration plant, where it produces concentrated flake graphite, which is being sent to potential North American and international clients for the qualification of its products. Nouveau Monde is planning a large-scale secondary graphite transformation facility, for perspective vertical integration, within the electrical vehicle market. According to Mr. Desaulniers, 2020 will be a pivotal year, as the Company receives commercial scale permits and begins construction of the mine and concentrator in the fall. Dedicated to high standards of sustainability, the Matawinie graphite project will be the first of its kind to operate as an all-electric, low-carbon mine.
Nouveau Monde demonstration plant
Dr. Allen Alper: This is Dr. Allen Alper, Editor-in-Chief of Metals News, interviewing Eric Desaulniers, who is Founder, President and CEO of Nouveau Monde Graphite. Could you, Eric, give our readers/investors an overview of your Company?
Eric Desaulniers: Our Company is developing the Matawinie Graphite Project. We discovered the deposit in 2015 and now we are construction ready. During the summer we are starting the construction, once we receive all the permitting. It is the largest graphite operation projected in the Western world. It's one of the largest deposit in the world as well, in a very interesting market, obviously.
Dr. Allen Alper: Could you tell us a bit more about the project? What makes it so interesting?
Eric Desaulniers: There are three segments of the market that we're tapping into, with our project. We are currently selling graphite, within our demonstration project, based on the Matawinie Project as well. So we are producing 1,000 tons of product this year in three segments.
The first, the big one, is the refractory market, the big bricks that they are using to line the furnaces in the steel making industry. That's a big traditional market for the graphite. The other major market, on which we're working, is the lithium ion battery market. Graphite is the largest component of a lithium ion battery, and we are starting to produce value-added products from our concentrate, the spherical graphite, to serve that specific market. The other segment is all the specialty graphite, so the foil for iPhones, the lubricants, carbon brushes, a lot of different, smaller applications, but high-margin, lower volumes tonnage.
Dr. Allen Alper: Oh, that sounds great! Could you tell our readers/investors your goals for 2020?
Eric Desaulniers: 2020 for us is pivotal. We are in the middle of the permitting process this spring. This summer we'll receive the permits, for our commercial scale operations. We’ll start construction of the mine and concentrator this fall. On the value-added project, to transform our flake into spherical graphite, they are commissioning our demonstration project, to be able to start sending tons of product to our customer, probably in Q2.
The two main projects, the mining concentrator and the value-added project, are advancing well, thanks to our experienced team and demonstration projects. Being located in Quebec, a stable, mining-friendly jurisdiction, we are leveraging the clean, affordable and renewable hydroelectricity by designing an all-electric mine, the first of its kind in the world. We are hoping to position our high-purity, zero-emission anode material in the booming battery market that is actively seeking ethically and sustainably sourced minerals.
Dr. Allen Alper: It sounds very good. Could you tell our readers/investors a little bit about your background and your Board?
Eric Desaulniers: I'm a geophysicist, with a Master degree in Geophysics. I started the Company, with the idea that graphite is an easy commodity for a geophysicist to discover. We surveyed over 20,000 square kilometers in the southernmost area of Quebec. All around there, the only producing graphite mine is owned by Imerys. Finally, in 2015, we discovered a project.
Then since 2015, we hired a lot of the experts that were working at key mining projects, including Imerys. Now that team of experts is leading our project. So, I went from grassroots explorer to starting a company.
Dr. Allen Alper: Well, that sounds excellent! Could you tell us a little bit more about some of the other members of your Board of Directors?
Eric Desaulniers: Our largest shareholder is the Pallinghurst Group from London. With two Board seats, they are very involved partners. They have deployed over $2 billion in the mining space in the last 12 years. It's one of the very effective mining investors in the world. So that's one of the partners.
Our CFO was working for six years at Imerys. He understands the product, mining investment and market. We have a lot of graphite experts in our Company, like our VP R&D and Marketing, with 20 years' experience in graphite and our Operations management team
Dr. Allen Alper: Oh, that sounds excellent. Could you tell our readers/investors a bit more about your products and how they'll fit into the market?
Eric Desaulniers: That's at the center of our project. We decided to do a demonstration project. So now, since 2018, we're running a demonstration project to be able to sell our product, well in advance, before the commercial scale. We already have a book of sales and we are qualifying our product and numerous customers in significant quantities. It will reduce significantly the risk of penetrating the market, when we'll be at the commercial scale.
Dr. Allen Alper: That's very good. Could you tell our readers/investors about your share structure?
Eric Desaulniers: Currently we have 261 million shares out. It's 50% owned by insiders, who own more than 10%, and management. The rest is the float, probably around 8,000 different retail shareholders. Our biggest shareholders are The Pallinghurst Group, Quebec government, Caisse de Dépôt et Placement du Québec, which is a very big pension fund in Quebec, and FTQ, which is a big union fund in Quebec as well. So those are really our main shareholders.
Dr. Allen Alper: Could you tell our readers/investors the primary reasons they should consider investing in your Company?
Eric Desaulniers: I don't know if you follow the Tesla. Today I think it touched over $900 a share. Companies like Tesla that are executing on their business plan, need the product. That's the major component of a lithium ion battery. Since the last few years we have carefully developed our project to be ready to serve those customers like Tesla, Volkswagen, Mercedes, BMW, everyone that's going all electric. If you want to invest in the EV revolution, it's either you buy Tesla at 900 bucks or you buy the raw material provider that is essential to their business case. I think it's a very good value proposition to invest in the juniors that will be needed to serve that market.
Dr. Allen Alper: Sounds excellent! Is there anything else you'd like to add, Eric?
Eric Desaulniers: Just to thank you, Al. Interviewing Nouveau Monde Graphite Inc. for Metals News is very appreciated. I’d invite readers to check out our special campaign to draw Elon Musk’s attention to our product: it was lots of fun to make and we heard a ton of positive feedback from the quarter million viewers so far: www.GotGraf.ca
Dr. Allen Alper: You are very welcome. Your project is very impressive. I‘ve enjoyed learning more about it. We’ll publish your press releases as they come out so our readers/investors can follow your progress.
http://nouveaumonde.ca/en/
Christina Lalli
Director, Investor Relations
438-399-8665
clalli@nouveaumonde.ca
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