NextSource Materials Announces Positive Study Results and Strategic Partner Process for Saudi Battery Anode Facility
TORONTO, ON / ACCESSWIRE / June 27, 2024 – NextSource Materials Inc. (TSX:NEXT)(OTCQB:NSRCF) (“NextSource” or the “Company”) has provided an update on its global anode expansion strategy. The company reported positive findings from a technical and economic study (the “Study”) for the construction of a proposed Battery Anode Facility (BAF) in the Kingdom of Saudi Arabia (KSA). NextSource has also initiated a strategic partner process to consider funding expressions of interest for the battery anode facilities in the Middle East and globally.
As disclosed in February 2023, NextSource aims to systematically establish multiple BAFs worldwide in critical jurisdictions to produce commercial-scale graphite anode active material for electric vehicle (EV) lithium-ion batteries. The planned BAFs will utilize proprietary anode processing technology currently supplying major EV automotive manufacturers.
Key regions under evaluation for potential BAF expansions include Madagascar, the KSA, the United Arab Emirates, and North America. The study highlights include:
- Production Capacity: The proposed KSA BAF will produce 20,000 tonnes per annum (tpa) of Coated Spheronized Purified Graphite (CSPG).
- Timeline: Full production achievable within 16 months from construction start.
- Economic Metrics: Post-tax Net Present Value (NPV8%) of US$677.0 million and an Internal Rate of Return (IRR) of 20.3%.
- Costs and Revenues: Capital costs are projected at US$280 million, with working capital of US$12 million funded through equity. Annual revenue forecasts are $230.1 million, with an EBITDA of $128.5 million.
The KSA BAF design will be based on NextSource’s technology partner’s established anode processing technology. Site visits within the KSA have already been concluded. The company intends to develop an anode processing hub with a total production capacity of 100,000 tpa of CSPG over five years.
Saudi Arabia has identified graphite and anode processing as key battery materials, integral to its “Vision 2030” plan, which aims to reduce the country’s reliance on oil and diversify its economy. The KSA offers significant funding and operational incentives for in-country processing facilities, including an expedited permitting and development process.
Craig Scherba, President and CEO of NextSource, stated:
“NextSource’s vision is to become a global supplier of critical battery materials. We are exploring potential locations for BAFs as part of our global strategy. Developing a BAF in Saudi Arabia would enable us to leverage the Kingdom’s strategic infrastructure and supportive business environment. Our alignment with Saudi Arabia’s Vision 2030 allows us to contribute to the country’s development while delivering value to our shareholders and stakeholders.”
Strategic Partner Process and Funding
NextSource is engaged in discussions with offtake partners and financiers in the Middle East interested in funding the construction of the KSA BAF. The company is also applying for various private and government funding opportunities.
Following site selection and the completion of a Feasibility Study, including front-end engineering and design (FEED) and the Environmental and Social Impact Assessment (ESIA) permitting, commercial production could potentially be achieved in 16 months from the start of construction.
Economic Results and Future Expansion
Based on the technical study conducted by Stantec, the capital costs are estimated at US$292.0 million. The post-tax economic results show an NPV of US$677.0 million and an IRR of 20.3%. At a full capacity of 20,000 tpa, annual revenues are expected to reach $230.1 million, with an EBITDA of $128.5 million.
NextSource plans to expand the initial 20,000 tpa facility to a total production capacity of 100,000 tpa of CSPG, resulting in an NPV of US$3,322.6 million and an IRR of 23.7%. The incremental capital costs to achieve this capacity are estimated at $864.8 million.
About NextSource and Stantec
NextSource Materials Inc., headquartered in Toronto, Canada, aims to be a global supplier of battery materials through the mining and processing of graphite and other minerals. Its Molo Graphite Mine in Madagascar, known for its high-quality SuperFlake® graphite, is currently ramping up production.
Stantec is a globally recognized engineering and design consultancy headquartered in Edmonton, Canada, with over 30,000 employees worldwide. The company provides sustainable and innovative design solutions.
For more information about NextSource Materials, please visit NextSourceMaterials.com
Source: NextSource Materials Inc.
