Slide 1: Molo Graphite Project
Molo Graphite Project MADAGASCAR The only project with graphite. TSX : NEXT OTCQB : NSRCF
Slide 2: Qualified person & forward looking statements
Qualified person & forward looking statements Mr. Craig Scherba, P.Geo., President and CEO of NextSource Materials, is the qualified person who reviewed and approved the technical information provided in this presentation. Safe Harbour: This presentation contains statements that may constitute “forw
Slide 3: Flake graphite market = ~650,000 tonnes per annum
Flake graphite market = ~650,000 TONNES PER ANNUM (Tpa) REFRACTORIES BATTERIES GRAPHITE FOILS #1 #2 #3 ~450,000 Tpa ~130,000 Tpa ~65,000 Tpa Majority of demand tied Experiencing largest growth Fastest growing segment to traditional steel market Source: Roskill, Benchmark 3 3 © NextSource Materials I
Slide 4: The graphite market is opaque
The graphite market is opaque. Lots of misinformation. Need to do your homework. 4 4 © NextSource Materials Inc.
Slide 5: We have done our homework
We have done our homework Management has had extensive face-to-face interaction with global traders and end-buyers in order to fully understand the graphite market. Refmin China Ltd. Panasonic Posco Chemtech Imerys SGL Carbon USA Hans Capital Hitachi Chem Seah Holdings Sibelco Superior Graphite Guan
Slide 6: Molo flake graphite project in Fotadrevo, Madagascar
Molo flake graphite project in Fotadrevo, Madagascar Mozambique Madagascar NO STRANGER TO MINING $+8 Billion Ambatovy Nickel & Cobalt Project (Sherritt, Sumitomo, KORES) Shipping Ports: ★ Tulear & Soalara ★ Rio Tinto $1 Billion Mineral MOLO Sands Project ★ Graphite Fort Dauphin Shipping Port (Taolag
Slide 7: Ideally located to key demand markets
Ideally located to key demand markets South Korea EU Japan China India MOLO IS LOCATED WITHIN THE HUB OF TOP PURCHASING AND PROCESSING MARKETS FOR FLAKE GRAPHITE. Molo Deposit Madagascar 7 7 © NextSource Materials Inc.
Slide 8: Molo graphite project
Molo graphite project We are seeking US$24M to enter production within 1 year. Construction-ready with first mover advantage. • Feasibility stage project with positive economics • 40-year Mining & Environmental permits in place for a large area • Detailed Engineering and Front End Engineering and De
Slide 9: A very large resource
A very large resource 100.37 million tonnes (MT) measured & indicated Combined Measured & Indicated resource @ 6.3% C, above a 2% C cut-off 40.91 MT inferred Inferred resource @ 5.8% C, above a 2% C cut-off RESOURCES; above a 2% C cut-off RESERVES; above a 4.5% C cut-off • 23.62 Mt) Measured @ 6.32%
Slide 10: Low cost and easy extraction
Low cost and easy extraction • Graphite immediately at surface • Negligible waste-to-ore ratio (0.53:1) • Low population density • Low environmental impact 10 10 © NextSource Materials Inc.
Slide 11: Low environmental impact
Low environmental impact All technical studies were undertaken/completed in accordance and partnership with: • Equator Principles • World Bank & IFC requirements • South African and Malagasy environmental consultancy firms, • GCS Water and Environment Ltd. • AGETIPA (set up by World Bank) ! Source:
Slide 12: Extensive community involvement & acceptance
Extensive community involvement & acceptance Engaged in a multitude of community outreach programs. • Training on how to improve agricultural yields • Distribution and training of agricultural equipment selected by communities • Training on how to effectively use organic fertilizers • Establishment
Slide 13: Phased buildout plan
Phased buildout plan A phased buildout using a modular design Phase 3 allows for easy expansion as market demand requires. • Expansion • Supply refractory industry Phase 2 • Supply expandable industry • Supply Li-ion industry • 45,000 tpa total production • Value-add processing • Adds 2 additional m
Slide 14: Lowest CAPEX of any competing project
Lowest CAPEX of any competing project $24M US is the total CAPEX, including 3 months working capital, for Phase 1 (17,000 tpa) $60M US is the total CAPEX, including 3 months working capital, for Phase 1 & 2 (45,000 tpa) Source: 2019 Molo FS 14 14 © NextSource Materials Inc.
Slide 15: Competitive with lowest quartile operating costs
Competitive with lowest quartile operating costs Phase 1 OPEX: $566/T FOB Mada Port Phase 2 OPEX: $515/T FOB Mada Port • Lowest quartile OPEX • Competitive with Chinese pricing Port d'Ehola at Fort Dauphin 15 15 © NextSource Materials Inc.
Slide 16: 9-month build time
All-modular build approach Actual representation of the all-modular Molo mine. 9-month build time Source: 2019 Molo FS • Established and proven modular plant solutions fabricator currently supplying major CPG firms • Entire plant is 35 modules • Constructed off-shore (6 months) – at contracted price
Slide 17: Feasibility Study Results - Phases 1 & 2
Feasibility Study Results - Phases 1 & 2 • Assumes expansion from 17,000 T/yr to 45,000 T/yr in third year of production • 30 year mine life • Assumes NO gearing Pre-tax Post-tax NPV: 8% discount US$237.1M US$184.3M IRR: 43.1% 36.2% Payback: 3.4 years 3.8 years Year 1-3 Year 3 Onward Annual Producti
Slide 18: Commissioning within 10 months from CAPEX financing
Commissioning within 10 months from CAPEX financing Phase 1 timeline* 2020 2021 Oct Dec Jan Mar May July Sept Nov Site Prep & Sectoral Permitting Capex Raise CAPEX Financing Site Preparation 3D Design Completion Design Detailed Fabrication Design Procurement & Fabrication Assembly Assembly Factory A
Slide 19: Molo has been verified for all demand markets
Molo has been verified for all demand markets • 98% carbon (C) purity achieved with simple flotation • Excellent thermal expansion (>500x) for graphite foil applications • Easily upgraded to 99.97% C (battery grade) • Verified by end users for ALL top demand markets for graphite 20 20 © NextSource M
Slide 20: Graphite pricing explained
VEIN 99% JUMBO FLAKE (90-99%) 98% Graphite pricing explained 32 97% 96% 50 95% LARGE FLAKE 94% Two factors at play: flake SIZE and flake PURITY (carbon 80 They can move together Two main parameters determine price: mesh size and carbon content. FLAKE content)of one another. or independent (85-97%) 9
Slide 21: A very high-quality concentrate
A very high-quality concentrate • 13 tonnes of flake graphite produced in full-scale pilot plant • Almost 50% is premium large (+80mesh) & jumbo (+48mesh) flake • 97%C-98%C achieved with simple flotation Distribution Grade 46.4% large/jumbo flake Mesh Size % Distribution % Carbon (t) +48 (jumbo flak
Slide 22: Off-Takes in place for Phase 1 and Phase 2
Off-Takes in place for Phase 1 and Phase 2 1) Primary graphite supplier to Japan’s #1 EV anode producer Terms • 2,000 tonnes Phase 1 • +18,000 in Phase 2 • 10-year period • FOB China pricing (floating) • FOB Madagascar port delivery 2) Finalizing offtake with major European steel maker and trader Te
Slide 23: Vertical integration strategy
Vertical integration strategy NEWS RELEASE – Toronto, April 9, 2020 NextSource Materials Signs Letter of Intent with Japanese Offtake Partner and Prominent Graphite Anode OEM Processor to Collaborate on Battery Anode Plant 24 24 © NextSource Materials Inc.
Slide 24: Lithium ion battery construction
Lithium ion battery construction Source: Electronic Component News; AmericanEnergy Technologies 25 25 © NextSource Materials Inc.
Slide 25: Graphite leading the demand for battery minerals
Graphite leading the demand for battery minerals 26 26 © NextSource Materials Inc.
Slide 26: Value-add steps in natural graphite processing
Value-add steps in natural graphite processing • 100% of all anode material is processed in China, creating a supply security “choke point” • USA imports 100% of all graphite feedstock and anode material Coating Coated SG 0% 67% Purification SG Spherical Purified $ Graphite 0% 100% Spheroidization D
Slide 27: Battery anode facility collaboration & plan
Battery anode facility collaboration & plan • 3-way collaboration on construction and operation of battery anode plant to produce spheronized and purified graphite (SG) for OEMs with; • Japanese offtake partner who supplies all Japanese OEMs (except Nissan) • Leading Chinese-based graphite SG proces
Slide 28: Partnered with heavy hitters in OEM anode processing & sales
Partnered with heavy hitters in OEM anode processing & sales PARTNER MINE SOURCE OEM SALES ANODE FACILITY ANODE (SG) PROCESSING IP PARTNER 29 29 © NextSource Materials Inc.
Slide 29: Project timeline with funding partners in anode plan
Project timeline* with funding partners in anode plan Phase 1 Phase 2 US $25m CAPEX +US $43.5m CAPEX 17,000 tpa +28,000 tpa Verification of product for refractory and LiB markets 2020 2021 2022 2023 2024 SPG Plant +US $20m CAPEX *Timeline is subject to change and entirely 20,000 tpa of SPG based on
Slide 30: NextSource also 100% owns Green Giant vanadium deposit
NextSource also 100% owns Green Giant vanadium deposit One of the largest delineated vanadium deposits in the world • Separate from graphite resource • Sedimentary deposit (i.e. NO magnetite) • At surface • Expandable as delineated over 50km trend Vanadium flow batteries competitive for grid-scale e
Slide 31: Strong mine operations team with extensive African experience
Strong mine operations team with extensive African experience Craig Scherba Oliver Peters President and Chief Executive Officer P.Geo. Sr. Consultant, Process Engineering PrEng • Discovered both the graphite and vanadium deposits as former • Head process engineer at SGS Minerals Canada (Lakefield) h
Slide 32: The only project with graphite.
The only project with graphite. 33