Mr. Arne Frandsen reports

NMG AND PANASONIC ENERGY ANNOUNCE BINDING OFFTAKE AGREEMENT AND US$25 MILLION PRIVATE PLACEMENT TO SECURE THE SUPPLY OF ACTIVE ANODE MATERIAL FOR NORTH AMERICAN BATTERY PRODUCTION

Nouveau Monde Graphite Inc. and Panasonic Energy Co. Ltd., a wholly owned subsidiary of Panasonic Holdings Corp., have entered into a binding offtake agreement, pursuant to which Nouveau Monde will supply 18,000 tonnes per annum of its planned phase 2 active anode material production to Panasonic Energy for an initial period of seven years. In addition to the offtake agreement, Nouveau Monde and Panasonic also entered into a subscription agreement for Panasonic to make an initial $25-million (U.S.) equity investment in Nouveau Monde (the tranche 1 investment) to support the advancement of Nouveau Monde's phase 2 operations -- the Matawinie mine and the Becancour battery material plant -- in line with Panasonic Energy's specifications refined during the qualification process and technical collaboration.

Arne H. Frandsen, chair of Nouveau Monde, declared: "We have found in Panasonic Energy more than a long-term Tier 1 customer; we have found a true partner who shares our vision for a decarbonized future and a striving North American integrated battery industry. This galvanizing offtake agreement, topped with a substantial investment strategy, is set to propel NMG through the last few steps before a final investment decision (FID). On behalf of the board of directors, I congratulate NMG's team on the dedication, quality of work, technological optimization and growth-oriented commercial mindset they have brought to this engagement process. The result is a successful partnership for years to come."

Kazuo Tadanobu, president and chief executive officer of Panasonic Energy, stated: "We are thrilled about Panasonic Energy's strategic investment in NMG and the long-term offtake agreement, marking a significant milestone in our medium-to-long-term management goals aimed at strengthening the North American supply chain for EV [electric vehicle] batteries. This initiative aligns with our vision for sustainability, prioritizing locally sourced materials and leveraging NMG's impressive vertically integrated supply chain. The bilateral partnership between Japan and Canada adds another layer of significance to our investment, and Panasonic Energy takes pride in contributing to the deepening ties and shared goals in advancing battery supply chains together with NMG."

Eric Desaulniers, founder, president and chief executive officer of Nouveau Monde, reacted: "Youkoso. We welcome Panasonic Energy as a shareholder in NMG and are excited to partner with them to supply carbon-neutral natural graphite extracted and transformed with the highest ESG [environmental, social and governance] standards of the industry. Today marks a momentous milestone for NMG, highlighting the progress made towards our phase 2 and the company's sound business plan of becoming North America's largest fully integrated active anode material producer to serve the booming Western battery and electric vehicles (EV) market."

With a confirmed multiyear sales commitment from Panasonic Energy, supplemented with the tranche 1 investment, and with the parallel General Motors Co. (GM) transaction, Nouveau Monde has the means and technical parameters in hand to advance engineering of the company's phase 2 Becancour battery material plant. The offtake agreement and the parallel GM transaction also provide greater bankability visibility to Nouveau Monde's potential lenders, strategic investors and governments as part of the project financing linked to a positive FID for the company's integrated phase 2 Matawinie mine and Becancour battery material plant. Lender input was provided throughout discussions with Panasonic Energy to facilitate successful financing at FID.

Offtake agreement

The binding offtake agreement covers the supply of a committed annual volume of 18,000 tonnes of active anode material by Nouveau Monde to Panasonic Energy for an initial seven-year term from the commencement of the company's phase 2 production. The sales price will be based on an agreed-upon price formula linked to future prevailing market prices as well as a pricing mechanism to satisfy project financing ratios and ensure stable procurement for Panasonic Energy. The offtake agreement is subject to conditions precedent that are standard for a project of this nature, including, among others, the successful start of commercial operation and final product qualification. The offtake agreement contains standard termination rights for an agreement of this nature.

Through this offtake agreement, Panasonic Energy is set to leverage Nouveau Monde's fully integrated North American production, carbon neutrality profile and pro-active ESG practices for the establishment of a reliable, local and responsible battery manufacturing value chain. The company's active anode material complies with the U.S. government's Inflation Reduction Act battery material sourcing requirements for EV subsidies.

Strategic investment and investor rights agreement

In connection with the tranche 1 investment, Panasonic has agreed to subscribe for 12.5 million common shares in the capital of Nouveau Monde and 12.5 million common share purchase warrants for aggregate proceeds of $25-million (U.S.). Such warrants are generally exercisable in connection with the tranche 2 investment at FID in accordance with their terms. Each warrant will entitle the holder thereof to acquire one common share at a price per warrant share equal to the lower of: (i) the amount in $2.38 (U.S.) per common share; and (ii) the amount in U.S. dollars per common share equal to the closing price of the common shares on the trading day immediately following the date on which the tranche 1 investment is announced. The exercise of the warrants is subject to certain ownership limitations.

Nouveau Monde will use the net proceeds from the tranche 1 investment for the development of the phase 2 Matawinie mine and Becancour battery material plant.

Nouveau Monde will also enter into an investor rights agreement and registration rights agreement with Panasonic at the closing of the tranche 1 investment. Pursuant to the investor rights agreement, the Panasonic securities will be subject to a lock-up for a period of 18 months from the date of its investment. The investor rights agreement also provides Panasonic with certain rights relating to its investment in Nouveau Monde, including certain board nomination and anti-dilution rights. Copies of the subscription agreement, the offtake agreement, the investor rights agreement and the registration rights agreement will be available on the company's page on SEDAR+ and on EDGAR, and the summary of such agreements contained herein is qualified in its entirety by the reference to such documents.

In addition, Panasonic will be subject to a standstill limitation, whereby it will not be able to increase its holdings beyond 20 per cent of the issued and outstanding Nouveau Monde common shares for a period of three years.

Nouveau Monde's active anode material

Thanks to active technical engagement between the parties, active anode material produced at Nouveau Monde's phase 1 facilities has been tested, enhanced and integrated within Panasonic Energy's battery prototype production line. Detailed engineering for Nouveau Monde's phase 2 facilities leverages these live technological data as well as Panasonic Energy's distinct specifications and quality standards.

Nouveau Monde's active anode material has demonstrated industry-leading environmental footprint in an ISO-compliant (International Organization for Standardization) life-cycle assessment thanks to the company's planned all-electric operations powered by renewable energy combined with clean processing technologies. Nouveau Monde has also been identified as industry leading in Benchmark Mineral Intelligence's natural graphite sustainability index, the only producer to have been qualified in the category following a comprehensive examination of ESG practices, transparency and engagement.

Decarbonization efforts, trade regulations and recent geopolitical developments reaffirm the importance of establishing of a local, resilient and ESG-compliant supply chain of graphite to support battery and EV production. Nouveau Monde is targeted to become the largest natural graphite producer in North America, fully integrated from ore to active anode material and with demonstrated sustainability performance.

Complementary information

Nouveau Monde has also announced having agreed to enter a multiyear offtake agreement and a private placement with General Motors. Other strategic investors have also concurrently committed to an investment of $37.5-million (U.S.) in Nouveau Monde through a private placement. Additional information regarding such transactions is available on the company's website, on SEDAR+ and on EDGAR.

Shareholders, analysts and members of the media are invited to attend a webcast investor briefing on Thursday, Feb. 15, 2024, at 10:30 a.m. ET. Hosted by president and chief executive officer Eric Desaulniers with the participation of Nouveau Monde's management team, the briefing will entail a technical presentation followed by a question-and-answer session. Registration should be completed on-line prior to the start of the briefing.

A brief interview with Mr. Desaulniers on this announcement is also available for viewing on-line. Members of the media may download high-resolution files on-line and make additional interview or information requests to Julie Paquet, vice-president, communications and ESG strategy, at Nouveau Monde.

Completion of the tranche 1 investment remains subject to customary regulatory approvals, including approval of the TSX Venture Exchange and the New York Stock Exchange and other customary closing conditions. Copies of the subscription agreement, the offtake agreement, the investor rights agreement and the registration rights agreement will be available on the company's page on SEDAR+ and on EDGAR.

About Nouveau Monde Graphite Inc.

Nouveau Monde is striving to become a key contributor to the sustainable energy revolution. The company is working toward developing a fully integrated source of carbon-neutral battery anode material in Quebec, Canada, for the growing lithium-ion and fuel cell markets. With enviable ESG standards, Nouveau Monde aspires to become a strategic supplier to the world's leading battery and automobile manufacturers, providing high-performing and reliable advanced materials while promoting sustainability and supply chain traceability.

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