GRAPHITE: Nouveau Monde lands $20M financing with Pallinghurst

[caption id="attachment_1003740262" align="aligncenter" width="550"] Matawinie project Credit: Nouveau Monde[/caption] QUEBEC – Nouveau Monde Graphite (NMG) has announced a $20-million financing with the Pallinghurst Group to advance its Matawinie graphite property, as well as for general working capital purposes. The deal includes a $15-million convertible bond subscription agreement, accruing interest at 15% annually, starting in December 2020. The interest would be capitalized quarterly and paid annually in cash or shares. The principal amount, and any interest due, would be payable 36 months following issue. Pallinghust may convert the bond into Nouveau Monde shares, at 20¢ per share, in part or in full at any time. Alongside this bond, Nouveau Monde will issue 75 million warrants to Pallinghurst, allowing the group to purchase 75 million of its shares at 22¢ per share for 36 months. In addition, the company has entered into a royalty purchase agreement with Pallinghurst, with the investor agreeing to exchange the principal and accrued interest under an existing $5-million debt facility into a 3% net smelter return royalty on Matawinie. Nouveau Monde may buy back 1% of the royalty for three years following closing for approximately $1.3 million and any interest accrued at 9% per year from the closing date. “Through this financing solution, Nouveau Monde strengthens its balance sheet by approximately $20 million,” Eric Desaulniers, the company’s president and CEO, said in a release. “We are continuing to work with Pallinghurst, as partners, examining the best options to meet the full financing needs of NMG, for the benefit of all our shareholders.” Closing of the bond and royalty transactions is expected at the end of August. Pallinghurst currently holds 19.99% of Nouveau Monde’s shares. Nouveau Monde’s Matawinie graphite project is located 150 km north of Montreal. In October 2018, the company published a feasibility study for the Matawinie, which outlined an operation producing 100,000 tonnes of graphite concentrate per year over a 25-year mine life at an initial capital cost of $276 million. The associated project net present value estimate, at an 8% discount rate, came in at $751 million. For more information, visit www.NouveauMonde.ca.