NextSource Materials Announces US$20M Credit Facility with Vision Blue Resources

Rhea-AI Summary

NextSource Materials (NSRCF) has secured a US$20 million drawdown credit facility from Vision Blue Resources The non-dilutive facility will support the Company's Battery Anode Facility strategy, Molo mine ramp-up, and working capital needs.

The facility is structured in four equal tranches of US$5 million, with the initial tranche expected by January 2025 end. The loan carries a 15% annual interest rate, is repayable on demand after June 30, 2025, and is secured by company assets. NextSource can repay the facility without penalties.

Vision Blue, holding 47.7% of NextSource's shares, makes this a related party transaction. The company is exempt from minority shareholder approval as the facility terms are commercially reasonable and non-convertible to equity.

Positive

• Secured US$20M non-dilutive credit facility
• Flexible drawdown structure in four US$5M tranches
• Option for early repayment without penalties
• Strengthens working capital position for operations and growth

Negative

• High interest rate at 15% per annum
• Short-term nature with repayment possible after June 30, 2025
• Requires company assets as collateral

TORONTO, ON / ACCESS Newswire / January 30, 2025 / NextSource Materials Inc. (TSX:NEXT)(OTCQB:NSRCF) ("NextSource" or the "Company") announces that it has secured a drawdown credit facility (the "Facility") of up to US$20 million with Vision Blue Resources Limited ("Vision Blue"). The proceeds of the Facility, which is non-dilutive to shareholders, will be used as needed to progress the Company's Battery Anode Facility strategy, support the continued ramp-up and growth of Molo, and for general working capital purposes.

Hanré Rossouw, President and CEO commented,

"The funding from Vison Blue enables us to complete the ramp-up and growth of the Molo Graphite Mine while also continuing to advance our plans to develop Battery Anode Facilities. The recent commencement of commercial sales of graphite concentrate and the strengthening of our management team demonstrate the progress we have already made. With the continued support from Vision Blue, we are making meaningful progress towards our vision of becoming a leader in sustainably produced battery materials."

The Company may draw down on the Facility in four equal tranches and anticipates that it will draw down the initial US$5 million tranche under the Facility prior to the end of January 2025. Subsequent drawdowns will be determined based on the financial requirements of the Company and the continued availability of the Facility. Interest will accrue on the amount drawn down under the Facility at a rate of 15% per annum. The Facility is repayable on demand after June 30, 2025 and is secured by the assets of the Company. NextSource may fully repay the Facility at any time without penalty or bonus.

Related Party Transaction

Vision Blue holds 47.7% of the Company's issued and outstanding shares (47.7% on a partially diluted basis). Accordingly, the Facility constitutes a "related party transaction" as defined under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101").

The Company is not required to obtain a formal valuation in respect of the Facility. The Company is exempt from the need to obtain minority shareholder approval per subsection 5.7(1)(f) of MI 61-101, as the Facility is on reasonable commercial terms that are not less advantageous to the Company than if the Facility were obtained from a person dealing at arm's length with the Company and the Facility is not convertible, directly or indirectly into equity of the Company or a subsidiary of the Company. The Board of Directors of NextSource, with the exception of Sir Mick Davis (being a Director of Vision Blue) who declared his interest and recused himself, unanimously approved the Facility.

About NextSource Materials Inc.

NextSource Materials Inc. is a battery materials development company based in Toronto, Canada that is intent on becoming a vertically integrated global supplier of battery materials through the mining and value-added processing of graphite and other minerals.

The Company's Molo graphite project in Madagascar is one of the largest known and highest-quality graphite resources globally, and the only one with SuperFlake® graphite. The Molo mine has begun production, with Phase 1 mine operations currently being optimized to reach its nameplate production capacity.

The Company is also developing a significant downstream graphite value-add business through the staged rollout of Battery Anode Facilities capable of large-scale production of coated, spheronized and purified graphite for direct delivery to battery and automotive customers, outside of existing Asian supply chains, in a fully transparent and traceable manner.

NextSource Materials is listed on the Toronto Stock Exchange (TSX) under the symbol "NEXT" and on the OTCQB under the symbol "NSRCF".

For further information about NextSource please visit our website at www.nextsourcematerials.com or contact us:

Investors:

Brent Nykoliation, Executive Vice President +1 416 364 4911 brent@nextsourcematerials.com or Hanré Rossouw, President & CEO hanre@nextsourcematerials.com

Media:

Michael Oke/Andy Mills +44 207 321 0000 nextsource@aura-financial.com

Cautionary Note

This press release contains statements that may constitute "forward-looking information" or "forward-looking statements" within the meaning of applicable Canadian and United States securities legislation. Readers are cautioned not to place undue reliance on forward-looking information or statements. Forward looking statements and information are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", "potential", "possible" and other similar words, or statements that certain events or conditions "may", "will", "could", or "should" occur. Forward-looking statements include any statements regarding, among others, the use of proceeds for the Facility, the timing of the draw down, the continued availability of the Facility, progress in respect of the Company's Battery Anode Facility strategy and the Molo project, and timing of commercial sales, commissioning and achievement of nameplate capacity the rollout of Battery Anode Facilities including the capabilities and the timing thereof. These statements are based on current expectations, estimates and assumptions that involve a number of risks, including risks related to operations and ramp up issues at the Molo project, risks related to the Company's Battery Anode Facility strategy, as well as those risks identified in the Company's Annual Information Form and MD&A which could cause actual results to vary and, in some instances, to differ materially from those anticipated by the Company and described in the forward-looking statements contained in this press release.

No assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur or, if any of them do so, what benefits the Company will derive there from. The forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the forward-looking statements, whether because of new information, future events or otherwise, except as may be required by applicable securities laws. Although the forward-looking statements contained in this news release are based on what management believes are reasonable assumptions, the Company cannot assure investors that actual results will be consistent with them. These forward-looking statements are made as of the date of this news release and are expressly qualified in their entirety by this cautionary statement. Subject to applicable securities laws, the Company does not assume any obligation to update or revise the forward-looking statements contained herein to reflect events or circumstances occurring after the date of this news release.

SOURCE: NextSource Materials Inc.

View the original press release on ACCESS Newswire

FAQ

What are the terms of NSRCF's US$20M credit facility with Vision Blue?

The facility includes four US$5M tranches, 15% annual interest rate, repayable on demand after June 30, 2025, secured by company assets, and can be repaid early without penalties.

How will NSRCF use the US$20M credit facility funds?

The funds will be used for Battery Anode Facility strategy, Molo mine ramp-up and growth, and general working capital purposes.

When will NSRCF draw down the first tranche of the credit facility?

NextSource anticipates drawing down the initial US$5M tranche before the end of January 2025.

Why doesn't NSRCF need minority shareholder approval for the Vision Blue facility?

The facility is exempt as it's on reasonable commercial terms, not less advantageous than arm's length deals, and isn't convertible to equity.

What percentage of NSRCF does Vision Blue own?

Vision Blue holds 47.7% of NextSource's issued and outstanding shares, both on actual and partially diluted basis.