NOUVEAU MONDE GRAPHITE INC. (TSX-V: NOU) (OTCQX: NMGRF) (FRANKFURT: NM9) is pleased to announce that it has completed a private placement of 42,345,213 common shares in the capital of the Corporation at a price of C$0.235 per Share for aggregate gross proceeds of C$9,951,125. The Private Placement forms part of the financing strategy of the Corporation announced on April 3, 2019.

The Corporation also announces that it has closed an unsecured financing with Pallinghurst Graphite Limited for an aggregate amount of C$2,000,000, which minimises shareholder dilution and bears interest at a rate of 9% per year. The capital and the accrued interest shall be repaid at the latest on June 27, 2020.

Together with the proceeds of the private placement announced on April 3, 2019 and the Financing, the proceeds of the Private Placement are expected to provide Nouveau Monde with sufficient funding for its next stage of development of the Matawinie project. Specifically, the proceeds from the Combined Equity Raise will be used to:

• Fund the continued operation of the existing graphite flake plant, allowing product qualification purposes with end customers and process optimisation prior to full commercial operation;
• The construction of a demonstration plant for value-added products, for the growing lithium-ion battery and expandable graphite markets; and
• For working capital and general corporate purposes.

The following insiders, directors and officers, showing strong support for the Corporation, subscribed for a total of 33,090,320 Shares in the Private Placement amounting to C$7,776,225, as follows: cornerstone shareholder, Pallinghurst, subscribed for 8,525,000 Shares (for an amount of C$2,003,375) to maintain its 19.99% ownership interest; the Government of Québec, through its agent Ressources Québec Inc., subscribed for 20,000,000 Shares (for an amount of C$4,700,000); Charles-Armand Turpin subscribed for 4,255,320 Shares (for an amount of C$1,000,000); Éric Desaulniers subscribed for 50,000 Shares (for an amount of C$11,750); Charles-Olivier Tarte subscribed for 50,000 Shares (for an amount of C$11,750); Karl Trudeau subscribed for 50,000 Shares (for an amount of C$11,750) and Patrice Boulanger subscribed for 75,000 Shares (for an amount of C$17,625).

The Shares issued in the context of the Private Placement are subject to a four months plus one day statutory hold period ending on October 28, 2019.

The Private Placement to insiders and the Financing with Pallinghurst constitute “related party transactions” within the meaning of Regulation 61-101 respecting Protection of Minority Security Holders in Special Transactions and TSXV Corporate Finance Policy 5.9 – Protection of Minority Security Holders in Special Transactions. The directors of the Corporation have determined that the exemptions from formal valuation and minority approval requirements provided for respectively under subsections 5.5(a) and 5.7(1)(a) of Regulation 61-101 can be relied on as neither the fair market value of the Shares issued to the insiders, together with the value of the Financing, nor the fair market value of the consideration paid exceed 25% of the Corporation’s market capitalization. None of the Corporation’s directors has expressed any contrary views or disagreements with respect to the foregoing. The Corporation did not file a material change report 21 days prior to the expected closing date of the Private Placement and the Financing as the details of the participation of the related parties of the Corporation had not been confirmed at that time.

The Corporation paid brokerage, investment banking or similar fees of only C$18,000 to Pareto Securities Ltd. and C$18,000 to Platinum Broking Company Limited for services rendered in connection with a portion of the Private Placement.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful. The securities have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the United States Securities Act of 1933, as amended, and applicable state securities laws.

About Nouveau Monde Graphite

In 2015, Nouveau Monde discovered a major and high-quality graphite deposit on its Matawinie property, located in Saint-Michel-des-Saints, 150 km North of Montréal. The Corporation completed a Feasibility Study, which revealed strong economics with projected high-quality graphite concentrate production level of 100,000 tonnes per year over a 26-year period. Nouveau Monde will operate its demonstration plant until 2020. During this period, the Corporation expects the production of 2,000 tonnes of concentrated flake graphite to qualify its products with North American and international clients.

Moreover, in a vertical integration and sustainable development perspective, Nouveau Monde is planning the establishment of a large-scale graphite downstream transformation facility, catering the needs of the booming lithium-ion battery and expandable graphite markets.

With over 60 years of experience in the world of graphite, Nouveau Monde’s team develops its project with the utmost respect of neighbouring communities, while favouring a minimal ecological footprint. Nouveau Monde’s project is privileged by direct access to the workforce and infrastructure needed to operate its mining project, and it can also rely on an abundant, affordable and renewable source of hydroelectricity.