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Northern Graphite Secures Non-Dilutive Royalty Financing on Bissett Creek Project
Ottawa, Ontario--(Newsfile Corp. - March 23, 2020) - Northern Graphite Corporation (TSXV: NGC...
About this update from Northern Graphite Corporation
[{"type":"text","content":"Northern Graphite Secures Non-Dilutive Royalty Financing on Bissett Creek ProjectOttawa, Ontario--(Newsfile Corp. - March 23, 2020) - Northern Graphite Corporation (TSXV: NGC) (OTCQB: NGPHF) (the \"Company\" or \"Northern\") announces that it has agreed to sell a one per cent gross revenue royalty (\"GRR\") on its Bissett Creek Project to Electric Royalties Ltd. (\"ERL\") for $500,000 in cash and two million common shares of ERL (of which half are subject to a 12 month hold period and half to an 18 month hold period) (the \"Consideration Shares\"). The transaction is subject to, among other things, regulatory approval, the completion of due diligence by ERL and ERL completing its going public transaction which will involve a financing of not less than $3.5 million. Under the terms of the agreement ERL also has a two-year option to acquire an additional half of one per cent GRR by paying $750,000, of which 25 per cent can be paid in ERL shares. Northern has the option to buy back half of one per cent of the initial GRR at any time after 12 months by returning the Consideration Shares or paying $1.5 million in cash.Gregory Bowes, CEO of Northern, commented that: \"Bissett Creek is a high margin project and the sale of a small royalty has very little effect on its economics. The proceeds will provide a non-dilutive source of liquidity that will enable the Company to continue waiting for a turnaround in graphite prices which it believes will come even if automobile manufacturers are only modestly successful at achieving their stated fleet electrification goals.\" He added that: \"We are happy to support ERL in bringing more attention to the electric metals/minerals space by selling a royalty on what we believe is one of the world's highest quality, undeveloped graphite projects.\"Benchmark Mineral Intelligence estimates that major automobile makers have committed over US$300 billion to developing electric vehicles (\"EVs\") and that there are over 100 lithium ion battery (\"LiB\") mega-factories in the pipeline. This will require annual world graphite production to more than double. Volkswagen has committed US$91 billion to electrifying its fleet and in doing so, its battery demand alone will increase to 300 gWh which will require an estimated 40 per cent increase in world graphite production. Daimler (Mercedes) has committed U...